Filene just released an interesting study called “Who’s Joining Credit Unions.” Of particular interest is data that suggests a paradox between how people feel about branches and how they actually use them.

While credit union members think they need a branch nearby, the data tells a different story. According to the report, the majority of credit union members use a branch once a month or less.

Despite their low usage of branches, they want more of them. When asked what would improve their experience with their credit union, members’ #1 answer was “More ATMs.” The #2 answer: “More branches.”

Key Question: What the heck is going on here?

Branch and ATM convenience can’t be the only way to win deposits…can it?

Do people only want the perception of convenience?

To take a trip to a branch once a month (or less) doesn’t seem like that big an ordeal, even if it’s over five miles. There are plenty of people who drive further than that to go to Home Depot or Costco once a month. Heck, there are plenty of folks who drive five or more miles to get a coffee from Starbucks.

Key Question: Does branch and ATM convenience apply to people looking for loans? Or does it only apply to depositors and transactors?

Perhaps the problem lies in the type of question we — as financial researchers — pose to people. Give them a choice and they seem to say, “Hey, it doesn’t cost me any money when you build more branches, so go for it. Give me some more.”

What do you think? What’s going on here? Can you explain it?

Key Takeaway: If you don’t have a large branch presence — and most financial institutions don’t — your marketing needs to stress your delivery-channel alternatives to branches and ATMs.

Other insights from the Filene report:

• Credit unions look to have the most success targeting families with household incomes between $70,000 and $130,000.
• Friends and family continue to be the #1 way in which people hear about a credit union. Essentially, one-if-three new members come from the referral of a friend of family member.
• For credit unions with an open charter, one-in-16 new members are enticed by a newspaper ad. Around one-in-ten people learn about their credit union by driving by. One-in-100 come from the internet.

You can download the entire report from Filene here (registration required).

There’s an old adage in financial marketing: “It’s all about the rate.” Recent evidence from two different case studies suggests that’s wrong.

Case Study #1

Take BankWest’s promotion to launch a new savings account, where they tested two versions of their online ads. Both versions of the ad were animated. In the first version, the ad started by introducing a big rate. In the other version, they led with a photo.

Bottom Line: The version of the ad leading with the photo generated three times as many deposits as the version leading with the rate.

Key Question: Have you ever tried testing two versions of your marketing?

Case Study #2

Yesterday, some well-respected voices in the financial industry blogged about a South African bank that conducted an interesting marketing test. One version of the bank’s loan mailer had a man’s photo in it, another version had a woman’s photo.

Bottom Line: The woman’s photo impacted the bank’s male customers about as much as dropping the loan’s interest rate by 4.5%. (Women, it seems, were less impressionable.)

Key Takeaways:

• With both deposit and loan promotions, there’s a lot more to it than just the rate. Other psychological and emotional factors are at work.
• Be brave and have the courage to experiment. Financial marketers need to conduct more tests like these.
• Pay attention to what’s really driving your results, but be prepared to have your assumptions challenged.
• The next time you do a rate-based promotion, shift your focus from the rate to a photo and see what happens.

Little details can have a huge impact on the bottom line. As one credit union marketer recently pointed out, even something as subtle as a pronoun can make a big difference.

Further Reading:

• A Pretty Woman Beats a Good Loan Deal
• Sexy Nude Chicks by Ron Shevlin
  
• If sex is selling then I am buying! by Tony Mannor
• The Little Things by Andy LaFlamme