Source: Callahan & Associates “Peer 2.0 Software” – June 30, 2008

Key Insights:

• The country’s largest credit unions spend, on average, the least per member, but they may also be gaining media efficiencies with their marketing budgets.
• A marketing budget of $350,000 is not enough to support and sustain a billion-dollar credit union. That represents only .035% of total assets.
• Similarly, a $150,000 marketing budget is inadequate for a $500 million credit union. That’s only .03% of total assets.
• A $40,000 marketing budget is dismally low for a $250 million credit union. That’s about .015% of assets.
• A marketing budget of $2.8 million seems excessive for a $500 million credit union, as does $1.2 million for a credit union with $250 million in assets. That’s around .05% of assets.

Key Questions:

• How can any credit union at any size have a marketing budget of $0?
• What is the average cost of marketing per new member?
• What is the average growth in assets per marketing dollar spent?

Bottom Line:

• The average marketing budget for most financial institutions (bank or credit union) at any asset size should be at least 0.1% of total assets. (Case in point: BofA, whose $2.0 billion marketing budget is almost exactly 0.1% of its $1.9 trillion in deposits.) Many factors affect this guideline — up or down — including, but not limited to, growth goals and media costs in specific markets.
• Now is not the time to cut your marketing budget (as tempting as that may sound to some among your senior management team). First of all, as market conditions get tougher, you need to ramp up your spending — just to stay where you’re at. Second, it’s easier to “cut through the clutter” when there’s less clutter.

When BankWest in Australia expanded to the East Coast, they redesigned their branch prototype and gave it a total makeover. To tout their new retail stores, the bank put a neat, interactive flash tour on its website.

The tour includes 11 different “hot spots.” Pause your mouse on a hotspot and it reveals some little tidbit about the branch.

These stores should fit nicely with BankWest’s brand theme, “Happy Banking” (previous coverage from The Financial Brand here). If you haven’t seen their outrageous TV spots, you should definitely go check them out.

To give you an idea of how far BankWest takes “happy,” they are the “Official Happy Partner” for the 2008 Australian Olympics.

Also supporting their “Happy Banking” theme is a novelty microsite that defies explanation. It must be seen to be believed. (Hint: Singing kittens are involved.)

Now the bank has a branch model that fits right in. While the branches don’t ooze “happy” as much as the rest of the brand, there is a general perky cheer to the design.

They should put out Skittles in candy dishes for customers. They could call them “happy pills.”

:60 seconds on BankWest’s new East Coast retail stores:

• BankWest ditched traditional teller bays in lieu of cash recyclers, which allow more freedom of movement within the store for both staff and customers.
• BankWest refers to its new branches as “stores” as they will be retailing non-financial merchandise such as money boxes and financial books.
• Meeting spaces have been designed with movable walls so that more space can be created in the store for customer seminars.
• Traditional bank branches are often quite masculine, sterile places. The new design incorporates more earthy tones with wood and cork flooring and feature lighting. Or, as the interactive tour puts it, “Warm, friendly colors, not traditional bank colors.”

Source: The Bank Channel