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5 Myths That Plague Credit Union Marketing Professionals

A white paper from CUNA dissects, dispels and demystifies marketing misunderstandings that hold credit unions back.

Once upon a time, credit union marketers wrote the monthly newsletter, organized the annual meeting, worked with a couple local charities and coordinated the occasional financial education promotion. Times were simpler then…

Today, credit union marketers must be masters of design, research, data analysis, product development, advertising media, digital channels, public relations and social media content.

While the dynamics of marketing credit unions has changed drastically, the mindset among many CU managers has not; many myths persist. How can credit union marketers get the results CEOs expect — and the respect marketers crave — when faced with outmoded beliefs?

A white paper from CUNA’s Marketing and Business Development Council looks at the changing dynamics in credit union marketing, and how CMOs need to respond. In the report, CUNA outlines ten principles underpinning marketing success. The ten points are all based on common misconceptions, revealed in a series of interviews with the credit union industry’s top marketing professionals.

What CUNA found is that a new credit union marketer is emerging — one who builds internal bridges, manages risk, who understands how data can drive decisions, who can demonstrate results for marketing initiatives. But in order for this 21st century marketer to flourish, many myths must first be put to rest.

The complete CUNA report, “Marketing is Easy and Other Myths: Strategies to Demystify 10 Misunderstandings That Plague Credit Union Marketing Professionals,” is available online in the white paper section of www.cunacouncils.org. Here are five of them.

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Myth #1: Marketing on rates is the only way to compete

Reality: Consumers are not logical. The most successful companies use their brands to create real value and connection. According to Psychology Today, while most people believe that the choices they make are a result of careful analysis, in reality, emotions greatly influence and can even determine decisions. In fact, in consumer behavior studies, neuro-imagery can show that when evaluating brands, consumers use emotions, personal feelings, and experiences, rather than information like features and facts.

“Marketing on rate alone is a quick track to not reaching your marketing’s full potential,” says Jason DuPlant of Neches Federal Credit Union ($357 million in assets). “For any offer or rate, a prospective member can probably find 1,000 more just like it — or better — through other delivery channels.”

Key Takeaway: The emotional argument trumps the rational one. Rate-focused offers are rational. Appeal to people’s emotions first, then offer them logical justifications for their decisions.

Myth #2: Marketing and business development are the same

Reality: Marketing and business development require different skills.While marketing and business development are often used as synonyms in credit unions, as they both contribute to overall growth, the two functions are actually quite different. Marketing involves building a strategic plan, defining messages, crafting external communications and managing the visual brand. Business developers should have a strong focus on developing partnerships and strategic relationships.

Key Takeaway: Marketing is the management of processes and things. Business development is the management of relationships (i.e., sales).

( Read More: How Much Do Credit Union Marketing Executives Make? )

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Myth #3: Great marketing is always expensive

Reality: Creativity and uniqueness can score big wins no matter the budget. According to Jay Levinson, guerilla marketing is a term borrowed from military vocabulary that indicates a marketing strategy alternative to the traditional in order to achieve great results with minor investment. Since the strategy is direct, provocative, and surprising, it reaches the consumer in a way in which the typical defenses are lowered, providing maximum impact. Typically, these types of campaigns are directed towards small communities and micro-target to create high emotional impact.

Key Takeaway: Stop thinking about marketing along the same old traditional lines and typical media channels. Don’t do something just because “that’s what we’ve always done.” Big rewards come to those who take bold risks. That’s what guerilla marketing is all about.

( Read More: 5 Things You Should Know About Credit Union Marketing Budgets )

Myth #4: The CFO is the arch-enemy of marketing

Reality: Marketers and CFOs can work together to achieve common goals. The relationship between marketing and finance has been notoriously contentious, and one rife with misunderstandings. CFOs are stewards of the budget and bottom line, while marketers are responsible for achieving some modicum of growth. Although these two camps could forge a symbiotic relationship, marketers and CFOs often feel they are at odds with one another.

Many times a breakdown in communication is to blame. A study by CFO.com showed that marketers believed they were sharing more information than CFOs claimed to be actually receiving. Conversely, most CFOs believe that marketing does not have any real impact on profitability. Indeed 40% of CFOs don’t even think their marketing departments make net revenue a priority.

Key Takeaway: Marketers need to earn the respect of CFOs. And CFOs need to make an effort to learn more about marketing’s role and potential while approaching the subject with objectivity. A healthy relationship starts with dialogue and a mutual understanding.

( Read More: Credit Union Advertising Crack Down: Watch Your Language )

Myth #5: Other credit unions are our biggest competitors

Reality: Credit unions can still work together to gain market-share. A new term has crept up in credit unions in recent years called “coopetition,” a term that encompasses how credit unions can still exhibit the values of a cooperative while also competing for market share with other credit unions.

As more credit unions expand their charters, fields of membership have and will continue to overlap. While small credit unions fear being merger bait, and increasing competition among all credit unions hinders collaboration, cooperation is still embedded in the DNA of the credit union movement.

As Debra Trautman of the Maine Credit Union League puts it, “a credit union’s unique brand is important, and doesn’t have to be sacrificed to work cooperatively with other credit unions.”

Key Takeaway: Banks are the enemy, credit unions are your friends.

( Read More: Do Credit Unions Enjoy An Unfair Advantage In Their War With Banks? )

Read the Complete Report

CUNA Council members are eligible to receive complimentary copies of the entire 24-page white paper with all 10 marketing myths. The paper is available online in the white paper section of www.cunacouncils.org. Non-Council members may purchase white papers for $50 per copy.


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Comments

  1. Great points to make here. Let’s also not forget the changing face of marketing and what can be done to gain more respect from other executives within our credit union. Many times, marketing is cast aside as those who play with crayons and paint all day long. For some credit unions that might be true.

    However, I challenge credit unions marketers of today work to gain the respect that doctors, lawyers, scientists and other professionals receive.

    Looking at Myth #3, advertising and marketing are the same, credit unions can change this possibly be giving the proper title and role to those in marketing vs. those in advertising. Marketing, at its very core, can and should be driven in research and insight. That research and insight can then lead to creative execution. The details really do matter: http://www.ptpnewmedia.com/video-details-matter-in-digital.php

    This transitions into Myth #9, marketing and biz dev are the same thing. Like advertising, there may be role confusion at many credit unions as often times marketing and b-dev get smashed together into one person/department.

    I agree with this key takeaway, “Marketing is the management of processes and things.”

    Both of these points above is one reason we advocate that marketing leads the way in aligning people, product and process around a credit unions purpose: http://www.ptpnewmedia.com/people-product-process.php

    If marketing can help manage the processes of aligning people and product together, they can help to craft and shape the experience that a credit union deliver. This gets back to Myth #3, Marketing helps create brands. At the end of the day, an experience, a brand, is nothing more than well defined processes that have been refined over time.

    Marketing is continuing to change more quickly than ever with digital disrupting the world of many marketers. At the end of the day, all roads lead to the web: http://www.ptpnewmedia.com/video-digital-member-journey.php

    More importantly, Razorfish consumer research notes that, “Digital experiences create customers. The overwhelming majority of consumers who actively engage with a brand in digital fashion are much more inclined to purchase products and recommend the brand to others. 65% of consumers say that a digital experience, either positive or negative, changed their opinion of a brand. Of those, 97% said that their experience influenced whether they eventually purchased from the brand.”

    Lastly, myth #6, marketing on rates is the only way to see success, is spot on. Credit unions must move the conversation beyond “great rates and service”: http://www.ptpnewmedia.com/resources-articles-the-great-rates-and-service-lie.php

    Research from Forrester notes when building loyalty, people respond more to the experience (a set of well defined processes that have been refined over time) they have than their perception of price (rates). The study reports that for banks and credit unions, customer experience accounts for 55% of loyalty.

  2. Great article with some intelligent insights. Definitely going to share this with our team, and CFO.

  3. Bob Klaas says:

    Regarding Myth #5: Other credit unions are our biggest competitors…
    Let’s say two credit unions, with competing branches less than a mile apart, want to grow their membership in that town. Can someone give me an example of how they might work together to gain market share? I tried to think of a few ways that this could be done, such as sharing credit bureau costs, but the credit unions still end up competing with each other.

  4. Bob, you could argue that the instant CUs started getting community charters, the whole spirit of intra-industry “cooperation” and “working together” flew right out the window. In the old days, CUs had specific, limited fields-of-membership. Someone who was eligible to join their local firefighters’ credit union was not eligible to join the local teachers’ credit union, so the two CUs weren’t competing with each other. That made prospects for cooperation much better. But now that the firefighters’ CU and the teachers’ CU both have community charters, they are now competitors. The bottom line here is that whenever two companies are vying for the same dollar from the same consumer, they are competitors.

    CUNA’s take on this situation is going to be a bit different. They support community charters and the expansion of CU services to more people, and (as the CU industry’s largest lobbying group) they want CUs to band together to fight the common enemy: banks.

  5. I am so glad to see the separation between Marketing and Business Development. While they certainly mirror each other they are very different in scope of services and anticipated results. We are business Development specialist. We employ marketing professionals as required to accomplish specific results which creates the opportunity to develop new business!

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