PRESENTED BY:

DEFY THE TRENDS

A Webinar for Credit Union Professionals

Today’s Speakers

Kate Dunn– President, Digital Innovations Group– Business Strategy Chair, PODi Apps Forum 2008 - 2010– Board Member Digital Imaging Customer Exchange– Faculty, University of Richmond Robins School of Business,

Executive Education

John Franco– Executive Vice President, Arga Marketing– Former Chairman and CEO of Harbor National Bank

of Connecticut

Review

Marketing budgets have been reduced: Added cost of regulation NCUA assessment Corporate credit union bailout

Defying the Trends & Seizing the Opportunity

Need to do more with lessTargeted relevant marketing Cross sell income producing products/servicesBring in new members

Today’s Credit Union Trends

Recruitment of Members – Challenges: Where to find them How to reach them What to tell them to make them respond

Today’s Credit Union Trends

Should social media be integrated into the mix to improve resultsHow can social media help us reach our business objectives

Big Question

Where do I get the most bang for my buck? Low hanging fruit Specifically target most likely candidates Get very granular Significantly reduces production cost Greatest chance to maximize R.O.I.

How is your credit union chartered?

What can you tell them that will work? Value proposition WIIFM Share profits – Treat you like an owner Safe, Sound & Secure

Messaging

What do I sell first?Does it vary by segment?Can I reduce my cross selling expenses?Can I reduce customer attrition?

Next Best Product

Credit Union Challenges

• Uncertainty in national and global markets influences credit unions

• Increased legislation, data security stretch internal resources• Almost certain budgetary sacrifices as a result of re-capitalization

of NCUSIF• Membership which grew through July 2009 will stagnate during

rest of year• 40% of credit union members classify themselves only as

“moderately loyal”• Wave of job loses make it harder for members to stay current on

loans

Challenges

• Communication clutter– Typical American is exposed to 5,000 marketing messages a

day• notice 52• remember only 4

• Four or five generations in play– Varied levels of comfort and cynicism with technology,

advertising• Voluminous amount of information• Personal and professional duty overload• Loss of personal wealth/employment• Anxious and fearful of future

Implications

• Failure to cut through the clutter increases marketing expenses

• Failure to capture additional opportunity from existing members increases marketing expenses

• Ultimate implication is failure of the institution– YTD Decline in number of Credit Unions of 110– On pace for 252 closings in 2009

Sacrificing the Long Term for the Short Term

• Only 15% of short term sales are the result of marketing, but today’s marketing initiatives are responsible for 85% of long term sales.

Source: What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds, by Rex Briggs, Greg Stuart

Really Good News

• “19% of advertising fails outright and 67% could achieve significant improvement that would require no additional spending.”

• What to tweak:– Messaging – better understanding of customer’s motivations– Marketing Mix – VeriSign found that 10% of spend drove

98% of actions they wanted– Qualification - 80% of all deals are lost due to a in adequate

or non-existent qualification process.ES Research Group Study

In Short

• Must capture the loan opportunity that exists today– Cost effectively– Efficiently

• Focus on member loyalty will pay off– Strengthen relationships with on-line banking, broader

product participation, loyalty and referral initiatives• Improve resource utilization with automation,

tracking and decision support• Improve marketing ROI

Case One: Wallingford Municipal Federal Credit Union

• Business Problem– Low response and conversion rates on new loan

offers from statement stuffers and traditional direct mail

• Solution– Personalized direct mail campaign to existing

members promoting car loans with attractive rates

Targeted, Simple Personalization with Succinct Messaging

First NamePersonalization

Best Practice: Simple offer and call to action “Save Money” & “Get Pre-Approved First!”

Results

• Achieved highest monthly loan activity in history of the credit union

• Exceeded annual loan target after only four months using the program

• Extended program to other initiatives

Case Two: On-Line Banking

• Business Problem– Low on-line banking participation increased

cross selling costs and contributed to member attrition

• Solution– Use best practices developed in loan campaign

to convert members to on-line banking

Targeted, Simple Personalization and Succinct Messaging

First Name Personalization

Best Practice: Simple offer and call to action “free On-Line Service” & “Call for an application”

Results

• 17% of membership signed up for on-line banking within six weeks

Effective TargetingCustom personalization using gendering, age or other demographic informationConsider appending data if required

Compelling Imagery and TextKeep it Simple

Zero in on WIIFMClear Call to Action

Best Practices

Why Direct Mail WorksREASON TOTAL

ADULTSTiming of the piece arriving coinciding with need for the service/product 67%

Consumer's name on the front of the envelope 66%

The package looks interesting 60%

A special offer or discount 54%The package looks important 52%

Feel something in the package 51%A free gift or token inside 42%Dated material enclosed 35%None of these 5%

Add more cost impacting ROI

Source: Vertis Communications' Customer Focus® survey

Relevant

Personalized

Over 3x higher

It’s the Relevance that Counts• Relevance is the single largest lever on response in

individualized direct marketing Jupiter research reports:• Relevancy improves campaign revenues by 9 times

over untargeted broadcast mailings• Revenues are improved by an average of 18 times

with relevance

2007 Vertis Communications Customer Focus®

• 85 percent of women ages 25-44 read printed direct mail marketing pieces

• 53 percent of all women ages 25-44 surveyed who have access to e-mail, read e-mail advertisements

• 63 percent of all adults indicated the have responded to direct mail collateral offering a percentage discount

Women make more than 80% of all consumer purchasing decisions

Source: Source: Mindshare/Ogilvy & Mather

Case Two: Alerus Financial

• Business Problem– Declining credit consolidation loan applications– Low return from static mailings

• Solution– Test the use of a personalized and relevant

cross channel campaign against static mailings• Age Groups:

– 25 – 35– 36 – 45– 46 - 55

Step One: Direct Mail

Multiple Channels: Direct Mail, Email and Personalized Landing Pages

Personalized

Relevant Copy & Images for each age group

Provides Tracking

Personalized Response Mechanism

Relevance continuedMessaging Real Estate Expanded

Minimizing cost of mailing

Interactive conversation with prospectQuestions capture additional information

Thank you structure used to nurture interest

Step Two: Personalized Landing Page

3.67% responded to multi-channel version of campaign

60% of applicants were new to the institution

Response Rates by segment for multi-channel25 – 35 3.98%36 – 45 3.23%46 – 55 2.64%

Response rate from static mailer < 1%

Results

Highest ROI

The Power of Multiple Channels

• Researchers estimate that 25%-30% of total media time is spent multitasking, and that the more media a person Consumes, the more likely they will consume several channels at once

• Seeing a message in more than two channels increases response by 10% to 15%.

Sources: eMarketer Multi-tasking Consumers January 2007; DMA Study

Why Personalized Landing Pages?

• 46% of Americans prefer to respond to direct mail on-line.

• PURLs:– increase response by up to 400%– provide automated response tracking– provide interactive communication with prospect– automate integration with sales channels

• Campaign changes are affordable• Electronic messaging real estate is cheaper than

print.Source: DMA Study

Why Email as a Channel

• 60% of business decision makers with access to the Internet prefer email as the method to receive marketing messages.

• Links included in emails facilitate response• 50% of those receiving permission based

e-mail say they are more likely to buy products from the sender in the future regardless of the channel

Source: Jupiter Research and Indivia, Epsilon

Why Social Media?

• 1/3 of all American have profiles on social networking sites• The average LinkedIn user is 40 years old• Most Twitter users are now 35 and older• People from 35 to 54 now represent the biggest group of

users on Facebook.• LinkedIn - business-only has 43 million members in more

than 200 countries

Sources: LinkedIn: Connecting with Success and Timothy J. Wood, Montgomery County Group Leader of Business Development atOBA Bank, contributed to this article

Why Social Media?

• Affluent working women with family incomes of $75,000 or more are growing in number

• 94.3 percent access the Internet during an average month– About half are considered heavy users of the Internet.– Heavy use of radio, television, newspapers and direct

mail has declined• Women make more than 80% of all consumer

purchasing decisionsSources: comScore, May 2009, BMS Media, January 2009 survey, Mindshare/Ogilvy & Mather

Why Social Media?

• US Population– 18% create content– 25% critique content– 12% collect information posted by others– 25% joiner on-line communities– 48% are considered spectators– 44% are currently inactive

Source: Groundswell by Charlene Li and Josh Bernoff

The Future of Social Networking• People from 35 to 54 now represent the

biggest group of users on Facebook– 99% of Gen Y have one or more active profiles

on social networks such as Facebook or MySpace

Source: strategy Labs; PMN together with the Interactive and Direct Marketing lab at Pace University’s Lubin School of Business, May

Case One: Tinker Federal Credit Union• Business Problem– Low enrollment of Gen Y customers

• Business Solution– Created a multi-channel campaign “Buck the

Norm” as a rallying cry for young people to get over what everyone else was doing and to get smart with their money.

Solution Components

• New web site relevant to Gen Y audience• Video Scholarship Contest for Engagement• Ringtone, Wallpaper, Buddy Icon downloads• TV and Direct Mail Marketing• Reinforce with social media using Facebook, IM, Twitter,

online voting, local bands music players, and contests• “Save the Buck” promotional cards given out at college

hangouts and coffee shops that would cover their bill• Attendance in community events geared toward young

adults

Multiple Channels: Direct Mail, Web Site, TV, Video, Social Media

Results

• 35,000 web site visitors• Average of almost 4 pages viewed per visit• ‘Buck the Norm’ video on YouTube viewed

by almost 1,500 people• Facebook event page for the scholarship

contest visited over 3,000 times

5,000 Member Credit Union in Northeastern US

• Business Problem– Statements which were labor intensive,

inflexible, and prone to quality errors– Call center activity disproportionately high due

to errors and the confusing statement• Business Solution– Redesign of statement with highlight color to

improve readability and incorporate cross channel tracking in promotional messaging

Solution Components

• Highlight color statement• Targeted promotional messaging based on

member’s existing relationship• Reinforcement from social media using

blogs, facebook page and tweets

Results

• 30% of customer base converted to e-electronic statements saving the credit union $30 per member– Approximately $45,000 per year initially

• 18% of members are following credit union’s tweets– Estimated reduction in other marketing

expenses of $30,000 per year

Review

• New technologies exist to improve the efficiency and effectiveness of marketing efforts

• 67% of what you are currently spending could generate better results by modifying the tactics

• 19% of what you do fails outright• Opportunity exists to capture opportunity

without increasing spend

Combine direct mail or statements with targeted messaging relevant to the memberReinforce direct or statement marketing with email

Use links to relevant services to track changes in behavior

Reinforce strategy and social media presenceEncourage members to share reasons for their satisfaction turning them into ‘promoters’

Email and landing page tracking allows you to capture and integrate best practices quickly for maximum ROI

Review

Review your current member data% of emails and current baseline deliverability statistics

OpensBounces (hard and soft)Click ThroughsDevelop a fun way to capture emails from members

Determine best segments given current economic climateStart thinking about right social media to use

CommunityBlogEtc.Read Groundswell by Charlene Li and Josh Bernoff

First Steps

You’ll receive a survey following the webinar, once you complete it you will be sent a copy of today’s presentation and a link to download a white paper called Defying the Trends, Grow Revenues in 2010

Questions?

Thank You!