Credit Union Marketing Budgets: Too Much, Too Little?

The average marketing budget for most financial institutions (banks or credit unions) at any asset size should be around 0.1% of total assets. BofA, at $1.9 trillion, budgets $2.0 billion for marketing which is almost exactly 0.1%.  Many factors affect this guideline — up or down — including, but not limited to, growth goals and media costs in specific markets. Credit unions with community charters need to allocate more.

As tempting as it may be for some members of your organization’s management team, a recession is never the time to cut the marketing budget. First of all, as market conditions get tougher, you need to ramp up your spending — just to keep your bottom line where it’s at. Second, it’s easier to “cut through the clutter” when there’s less clutter. It makes perfect sense: you’ll stand out if you ramp up your marketing while others cut back.

Take a look at this data from Callahan & Associates “Peer 2.0 Study” from June 30, 2008.

Asset Range Marketing Investment
Per Member
Avg. 2008
Mktg. Budget
# of
Over $1B $12/member $2.5 million $350K – $19M 135
$500M – $1B $14/member $993,000 $150K – $3M 201
$250-500M $14/member $566,000 $40K – $2.8M 296
$100-250M $13/member $255,000 $0 – $1.2M 686
$50-100M $10/member $105,000 $0 – $600K 776

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 0.5% of assets.

Key Questions:

  • What is your average cost of marketing per new member?
  • What is your average growth in assets per marketing dollar spent?

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