Time For The Credit Union Marketing Budget Extreme Makeover

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One of these days, I’m going to meet Mark Arnold in person. And when I do, if he punches me in the face, I’ll completely understand. I’m constantly poking holes in his arguments on his blog. I try to do it subtly, without being too in-his-face. But this blog post can’t hide: It’s in Mark’s face, and rebuts an assertion and the supporting pieces of evidence that he posted on his blog in a post titled Time To Adjust The Marketing Budget.

Mark’s take on the marketing budget is worthy of analysis for two reasons: 1) As a former credit union CMO, Mark knows his stuff as a successful practitioner, and 2) I would bet his perspective is supported by the vast majority of current credit union CMOs.

What is Mark’s assertion? Credit unions should increase their marketing budgets for the remainder of 2012.

Mark writes:

“The reality is that if you aren’t hitting your loan, checking and new member goals you set for the year, cutting the marketing budget is not going to get you closer to your numbers. If you don’t spend in marketing, you won’t hit your strategic goals.”

The supporting rationale for this includes:

  • Smart marketing means more growth. As Mark writes, “Don’t expect growth without marketing.”
  • Election could increase media expenses. Media buys during the run-up to the election are likely to be more costly.
  • Marketing is an investment, not an expense. “Cutting the marketing budget is not actually cutting an expense; it is actually cutting an investment in your credit union.”
  • Branding leads to growth. Mark cites Jim Stengel’s book Grow, which claimed that companies that experienced exponential growth did so by committing dollars to their brand.

My take: With all due respect to Mark, his rationale doesn’t cut it. Credit union marketing budgets don’t need to be increased because media buys will be more expensive in the fall. Credit union marketing budgets need an extreme makeover.

Here’s why the rationale doesn’t cut it:

1. What, exactly, is “smart” marketing? If your credit union didn’t hit its growth goals for 2011, are you going to go into the CEO’s office and tell him or her that you weren’t doing “smart” marketing last year, but that this year you plan to? Smart execs see thru tautologies, and that’s exactly what “smart marketing means more growth” is. I guess if you did grow then what you did was smart marketing, and if you didn’t grow, it wasn’t. Any CEO who accepts the line “smart marketing means more growth” should be fired.

2. Every damn department in the company claims that their budget is an “investment” and not an “expense.” From strictly an accounting perspective, reality (if that’s what you want to call it) is that some line items in marketing’s budget are expenses and some are investments. Meaningless platitudes about “it’s an investment, not an expense” has no place in a senior exec’s lexicon.

3. Branding doesn’t necessarily lead to growth. Byron Sharp does a better job than I ever could of refuting the arguments put forth in the Stengel book. As Sharp says, “”experienced marketers looking for strategic advice won’t find much new or particularly helpful. It’s pretty much the standard sort of consultant fare such as ‘deliver a near-ideal customer experience’.”


The problem I have with Mark’s assertion and rationale is that it strikes me as the CMO going to the CEO and saying “I need more money to do more of what I’ve already been doing, boss.”

Now, granted, Mark doesn’t say that — but if he doesn’t mean that, he didn’t offer any alternatives.

Mark says that “reality is that if you aren’t hitting your goals, cutting the marketing budget is not going to get you closer to your numbers.” As far as I’m concerned, reality is this: If you’re not hitting your goals doing what you’re doing with the existing budget, how the hell is throwing more money at it going to make things better?

Maybe — just maybe — the problem isn’t that marketing’s budget isn’t big enough, but that marketing isn’t doing the right things (I don’t even want to raise the possibility that marketing is doing the right things, but not doing them well).

Maybe, instead of planning for higher media costs in the fall, we should eliminate expensive media buys that are APPARENTLY NOT DOING ANYTHING to drive prospective members to the credit union’s branches and website.


When I first sat down to write this post, I was going to title it Time To Cut The Credit Union Marketing Budget. But I realized that’s not right. So many credit unions spend so pitifully little on marketing, that cutting the budget isn’t the right thing to do, and I would guess that holds for 90% of the credit unions out there.

So how should credit unions revamp the marketing budget? I’m not saying this is going to be easy, but if I were a CU CMO, I’d start by looking at it from the CEO’s perspective. What does s/he want to know about how marketing is spending the budget, and what we’re getting for that spend? So I would budget around:

Customer segments, not media. Your CU has a goal to increase Gen Y members? Then, fine, tell me how much you’re going to spend in marketing that’s focused on the Gen Y market. The CEO can’t determine a budget that has 50% of the marketing spend going to TV, 25% to radio, and 25% to print, is balanced correctly. But if you tell him/her that 50% of the budget is focused on customer segment A, 25% on segment B, and 25% on segment C, then based on the market size and potential of those segments, the management team can more easily see where the money is going, and determine if it’s balanced appropriately.

New members vs. existing members. No doubt, your CU wants new members. But every consultant and expert out there tells you that growing the relationship with existing members is where it’s at. OK, so how much of the budgeting is currently spent trying to attract new members versus growing the relationship with existing ones? You don’t know? How the hell can you not know that, and have the nerve to ask for more marketing dollars?

Customer life cycle. This will be hardest part to pull off. But, if I’m the CEO, I want more from marketing than just driving “awareness” of my credit union. I want leads. And I want up-sell and cross-sell. Yet all I’m hearing from marketing is that they want more money because media costs are going up, or because they want to pay some consultant to tell them what to do with Facebook.  Tell me how much of the marketing is going towards building awareness, how much towards driving consideration, and so on down the line of the life cycle.

Bottom line: Credit union CMOs, don’t ask for more higher marketing budgets. Get an extreme marketing budget makeover.

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