One of the biggest threats to credit unions and banks when it comes to gaining more direct auto loan business is auto dealers. After all, dealers have a captive audience and use various sales techniques and tactics. You know you are losing loan volume to auto dealers.
So what can you do to counter that threat? A recent study from Crowdtap suggests the importance of social media. Insights from the Crowdtap study reveal the following:
- 68% of those who purchased a car found the vehicle on social media
- 87% say they research cars via social media
- 80% say they’re ‘more likely to turn’ to social networks than sales people
- 95% say they ‘would talk about’ car models they like on social media
In other words, social media is now trumping car dealers when it comes to the car buying process.
Matthew Scott, SVP of Strategy & Business Development for Crowdtap said in a recent Bizreport article, “Media-empowered consumers—who increasingly rely on the opinions of their peers to inform buying decisions—are flipping the automotive advertising model on its head. Auto brands that are able to steer the power of peer endorsements and social sharing will find success in marketing’s people-powered future.”
So if social media is changing the car buying process for consumers, what can your credit union or bank do to leverage social media when it comes to auto loans? Here are a few ideas:
- Use social media channels to educate consumers about buying a car—People are obviously turning to social media when it’s time to buy a car. Rather than put all your car buying information on your website, weave content onto your Facebook page, your Twitter feed and your YouTube channel. Consumers crave information about buying cars. So provide that information where they are: on social media.
- Engage members/customers about their new cars on social media—Web 2.0 is all about engagement. People don’t just want you to blast them with marketing messages. They want to engage with you. So conduct a social media campaign where you encourage your target audiences to post pictures of their new car on Twitter or tell a story about their new car on Facebook. For an example of a financial institution using social media as an engagement tool to drive loans, check out this article from The Financial Brand.
- List your repos on your social media sites—As the study noted above, 87% of consumers say the research cars via social media. So don’t just list your repos on your website. You might miss some potential buyers. Put that information on all the channels you are using.
- Provide auto-buying tools on social media—One of the plusses that comes with social media is giving consumers tools and information (not just a sales pitch). One great tool to use is Calcubot. It is an application that takes consumers through an interactive buying process and one you can use on your Facebook page. One plus: you can customize Calcubot to your credit union or bank.
Both social media and banking are about trust. Establish that trust by using your own social media channels to drive information (and subsequently loans) to your financial institution
In a lot of ways, the headlong rush into new and innovative technologies is great. People are able to learn, communicate and share ideas at a pace impossible just a few years ago. Consumers are also able to interact with their finances digitally in ways that would’ve surprised forecasters even a decade ago.
Banks and credit unions now offer the majority of their products and services that were once branch-bound are now in vibrant digital mediums. Consumers can visit with their financial institution, open and close accounts, take out loans, make payments and a host of other options – all from the comfort of their smart phone or tablet. Fewer people actually visit physical branches now than ever before.
Yes, technology is great. But it’s not everything. And if your bank or credit union hangs its entire hat on technology – you are setting yourself up to fail.
Because technology does not necessarily mean culture. Technology can exist as a part of your culture, but it is not the entirety of your culture.
For example, having all the greatest and latest digital technology for your consumers is terrific. But, much like a robot, it doesn’t have much of a soul. People will still look to the heart of your bank or credit union to check out its culture. And it is culture that drives brand. And it is brand, in turn, that drives loyalty, market and wallet share.
This speaks volumes towards the importance of educating your staff on the brand. Certainly, they have to know the ins and outs of how your digital products work. But if they don’t have a grasp of the overall bank or credit union brand — the DNA of who you are, you serve and what you want to be — you are setting yourself up as a soulless entity, one with which consumers will have a hard time relating. Ensure that your staff fully understands and lives the brand on a daily basis. This approach encourages both brand compliance and consumer loyalty through enhanced engagement.
Like a lot of things, technology makes a terrific servant but a terrible master. Ensure that your bank or credit union uses technology as a tool and does not rely on it as a false culture.
The Credit Union National Association recently released the 2015-2016 Environmental Scan. The E-Scan offers insights in 10 primary areas affecting credit unions, including lending, economics, technology and of course marketing. The E-Scan is a must-read for any credit union executive and is also an outstanding planning tool to use.
The marketing section is entitled “Meet Millennials’ Expectations.” It also links branding with reaching the Millennial generation by saying “Establishing a trusted relationship with young adults might mean taking a hard look at credit union branding decisions.”
According to the E-Scan, there are three factors that come into play when it comes to credit unions’ visibility with the younger generation:
(1) Dilution of relevance
As the E-Scan notes, in five years millennials collectively will exert $1.4 trillion in buying power annually. That’s a lot of money when it comes to financial services. The challenge is that millennials are not finding credit unions relevant. The report suggests, “rekindle your relevance by finding and filling the dire needs of millennials, the needs that banks aren’t naturally willing to be able to support.”
(2) Brand confusion
“Collectively, credit unions are the alternative millennials so desperately seek. The problem is, they’re largely unaware credit unions exist,” the E-Scan says. It goes on to argue that the term “credit union” is not necessarily negative (just maybe unknown). While there is certainly confusion among this key demographic, that confusion actually presents and opportunity to educate younger consumers about your brand.
(3) Broken word-of-mouth cycle
While word of mouth marketing is extremely powerful, most credit union members are from older generations (Boomers, Greatest Generation). And when those generations are referring your credit union they are more than likely referring their own friends. Thus older referrals only beget older members. The solution the E-Scan suggests is that you ensure your credit union is offering products and services that Millennials want. “Credit unions must closely align their strengths with millennials’ desires.”
One of the best parts of the E-Scan is its action items after each chapter. With the marketing section the authors went even deeper, giving 12 strategies to reach millennials.
These were just a few snippets about reaching the millennial generation—there is obviously much more detail about this marketing issue and other relevant areas in the E-Scan itself. To get the full context of the marketing section and to read the other insights, be sure to purchase your copy of the E-Scan. In addition to the report itself, you can also order the full E-Scan package, which includes the E-Scan report, the E-Scan Newsletter, the E-Scan DVD, the Strategic Planning Guide and the E-Scan Research & Advice Portal. When it comes to strategic planning, there is no better resource or tool your credit union can use than CUNA’s Environmental Scan.
Banks and credit unions spend a lot of time talking about branding. And for good reason. Yes, your collateral materials are a piece of this puzzle (so if you took the title of this article literally, you can get the posters and brochures out of the trashcan).
What you cannot do, however, is in any way rely on your collateral materials to fully represent the brand. Your brand is, quite simply, your people. You can have the very best collateral materials in the world, from billboards and commercials to social media presence and a NASCAR sponsorship. But none of it matters if your staff does not connect with the brand and, in turn, share that connection with your consumers.
Banks and credit unions spend plenty of time and money on collateral materials. Some of that is necessary. But a good portion of that money is better invested in brand training for your staff.
Brand training helps ensure your staff is more fully in-touch with and eager to live out key elements of your brand with consumers. Brand training also helps align the elements of your brand plan that in turn, help put your credit union or bank on the road to success.
Posters are great and brochures are fine. What you don’t want are people working in your bank or credit union that must automatically refer to some type of printed cheat-sheet to help them through a consumer question. During a recent marketing audit mystery shop, a teller at one credit union, when asked if she had any brochures to review, replied simply “No. I am the brochure.”
Wouldn’t it be great if every staff member at your bank or credit union could say the same thing?
Note: The following post is written by Stan Cowan.
You’ve heard it a million times. “The Millennials are coming!” But actually, they’re already here. What percentage of your membership base is made up of Gen-Y? 5%? 10% (nationally 15% use a credit union)? Now, what percentage are traditionalists? Baby-boomers? Now’s the time to ensure your credit union’s future by being “there” for the millennials.
We all know that the millennial generation surpasses the size and purchasing (and borrowing) power of their parents’ generation. Does your credit union’s infrastructure and electronic member experience meet the service expectations of the 74 million born between 1978-1995? How can you compete with the big banks and the non-traditional service delivery models of tomorrow? Given that 88% of Millennials do their banking online and 73% are more likely to be excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square than a traditional financial institution, what roles do technology solutions play in your success story?
Being “there” to Millennials means:
Being available. Convenience is king for the Millennials. Physical branches – yes, they still want them when there’s a problem, if they have questions about their account or are applying for their first loan. Even though all of them have a smartphone, they’re less comfortable talking with you on the phone. But, they’ll still use it to communicate directly to you and indirectly about you using those same smartphones via online chat, text or through social media channels (on yours, or even worse, on others you don’t see). Millennials average over three hours per day on the Internet. Whether you’re serving members in person or through electronic channels, you need proven, best-in-class technology solutions that allow your employees to serve your members anytime and through any channel they want. Watch how Credit Union 1 accomplishes this with a complete integration model.
Being engaged. You already have what you need to engage current and potential Gen-Y members – Gen-Y employees! Probably two-thirds or more of your employees fall into this category, don’t they? By 2025, three out of every four workers globally will be Millennials. Use them – empower them! They already speak their language and know how/where Millennials want to be communicated with. They are significantly more likely to conduct financial transactions through a mobile device than any other age group. Get involved in helping them communicate with each other, to teach and recruit more members like them. To do that, you must first have the robust mobile technology solutions that make it a seamless experience for your members. Learn how First Citizens National gained quick adoption with their Mobile App solution.
Being real. Now that you’re utilizing your employees more, it’s time to go to the next level. But let’s do a reality check first. What’s the average age of your board of directors, your volunteers as a whole? Do they use social media? Do they use online and mobile banking? Are they enrolled in bill pay, eStatements and remote deposit capture? Millennials love engaging with worthwhile causes. And credit unions, if the movement is communicated to them correctly, are really cool in their eyes (they may not yet understand what credit unions are and what they stand for, however). So, start today by grooming the next generation by recruiting volunteers from the same generation that you’re trying to engage and grow from. Then make sure you’re offering access points for them like how North Star Community Credit Union did by integrating their core with a mobile banking solution that kept this smaller credit union up-to-speed with Millennials.
It’s already difficult enough for credit unions to win the hearts of Gen-Y given the competitive and regulatory environments of today. Touching the hearts of the next generation is possible, however, with the right technical solutions and culture infused from within.
Stan Cowan works at D+H, a global technology solutions provider for the financial industry as a Senior Solutions Marketing Manager. He’s also spent over 17 years as a senior executive in the credit union industry.