Banks and other financial service providers are spending billions of marketing dollars each year to capture your members’ financial business. In fact, your members are exposed to thousands of commercial messages every day, each screaming for attention. Your credit union’s marketing must have the power to break through this massive wall of advertising.
Your Member Communication Connection
How you strategically position and package your marketing materials directly impacts the way your products and services are perceived and responded to by your members. The image you paint, the relationship you establish, and the frequency of your marketing communication will determine whether or not your members will use your credit union as their Primary Financial Institution.
Relationship Marketing – Branding
There is much more to marketing than simply printing brochures and launching individual promotions. Effective marketing requires building a member relationship similar to the connection we all have with a brand name product. We purchase a brand name year after year because we feel we can depend on its performance. Your members should feel the same about your credit union.
Target Marketing enables a credit union to promote its products and services more effectively. Demographics, psychographics, and geodemographics are criteria used to define and target specific membership segments. For example, your members can be targeted by what they purchase, the credit union products or services they don’t use, or by age-related needs.
If you have MCIF capabilities, it’s a great way to target your members. If not, a practical method for many credit unions is to define their membership by age. Generally, members of approximately the same age and economic level have similar interests and needs. Here’s how you can target your membership by age.
Net Savers, Net Borrowers, and Inactive Members
Overall, a credit union’s membership is made up of net savers, net borrowers, and inactive members. Net Savers are generally older members that save more and need additional income investments, but use fewer lending and convenience services. Net Borrowers are generally younger and therefore more active financially, borrowing and utilizing a variety of financial services. Unfortunately, inactive members are too often considered a lost resource by many credit unions. They are simply ignored. A better solution is to identify and target these members with specific promotions. Only after a credit union has attempted to reestablish a relationship with these members should they be considered truly inactive.
The following demonstrates how a credit union’s membership can be bracketed by age according to the CUNA standard.
Children Under Age 18
Currently, CUNA does not track members under the age of 18. However, this is an important age group. They are a credit union’s future. Although reaching out to younger members is a long-term investment, the immediate goodwill and future growth are well worth the effort.
Young Adults Ages 18-24
Young adults are just beginning their financial life and will progressively need more services. They will become your credit union’s prime net borrowers for the next 30 to 50 years. For the most part, this age group welcomes technology and are prime users of convenience services, including Checking, Check Card and/or ATM Cards, Audio Response, etc. Consumers at heart, their immediate borrowing needs include auto loans and a credit card.
Mature Members Ages 25-54
This group of net borrowers need a range of financial services now, including auto, personal, mortgage, credit card, student, and home equity loans. They are busy members, juggling their work, children, and community activities. They are also prime candidates for convenience services.
Older Members Ages 55-64
In the past, members in this age bracket have been financially conservative and progressively use fewer financial services as they grow older. However, as the baby boom generation moves into this age bracket, they may well establish a new trend. Baby boomers are more comfortable with new technology and will most likely use a variety of financial services longer than past generations.
Senior Members Ages 65 Plus
These Net Savers are looking to protect their nest egg and usually use fewer services. Generally, they are looking to earn additional income from their savings and investment accounts. It should be noted that over the past half dozen years this group has increased its use of convenience services, especially Check and ATM Debit Cards.
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