Thursday, January 26, 2012

Banks and Credit Union Marketers Taking Different Paths in 2012

According to a Rand Corporation research study, consumers usually select a financial institution based on convenience of branches, convenience of ATMs and bank fees. While bank users were more likely to select based on convenience, credit union users more likely chose with a desire to avoid fees. Consumers also cite personalized service when selecting a credit union.

With this as a backdrop, it is interesting to study the divergence of opinions expressed by more than 300 financial marketers from larger banks, credit unions and community banks as part of the 2012 Bank and Credit Union Marketing Survey covered on January 17 on both The Bank Marketing Strategy blog and on The Financial Brand

Faced with many of the same environmental challenges of increased availability of data, a proliferation of delivery options, imminent changes in how payments are processed, new marketing communication channels and consumer sentiment that has at times been polarizing, there are significant differences in how bank and credit union marketers view their roles, challenges and opportunities. There are also differences in the channels different types of organizations will use to communicate in the next 12 months.

Breakdown of Participants and Budgets

The survey was completed by slightly more than 300 financial institution marketers, with more than half the respondents being credit unions and more than 30% being non-community banks. 82% of respondents worked in a marketing capacity. As shown below, financial institutions in all asset ranges were well-represented, including organizations with over $100 billion in assets. More than 50 total responses came from financial institutions with less than $100 million in assets. 

Distribution of Respondents by Institution Type

As noted in the initial analysis, it was interesting that more than 80% of marketers surveyed indicated that their marketing budgets would either stay the same or increase over the next year, with credit unions having a slightly lower likelihood of having their budgets cut this year.

Challenges and Priorities

As shown below, all classes of organizations indicated the expectation of a resource constraint challenge in 2012 (despite equal or higher budgets), yet that is where the similarities end between banks and credit unions. Banks indicated a significantly higher challenge due to the lack of trust in the banking industry, which credit unions have used to their advantage in the second half of 2011 and into this year. Banks also are much more challenged by the presence of silos within the organization as well as by regulatory and compliance issues that credit union marketers indicated. Interestingly, non-community banks seem to have it easier when it comes to getting employee support for programs initiated.

From a prioritization perspective, loan growth was less of a priority for larger banks than for credit unions, while the desire for checking and deposit growth was significantly more important. In addition, while cross-selling was an important mission for all classes of organizations, the importance of this goal was much greater for larger banks, with almost half of the banks ranking this as a top priority. Alternatively, none of the organization types ranked stemming attrition as a significant priority which is interesting given the cost of acquiring a new customer/member. Finally, credit unions seem to be much more focused on changing the demographic composition of their member base, putting a high priority on acquiring a younger clientele.

Product Emphasis

Reinforcing some of the findings above, credit unions will be focusing on virtually all types of loans in 2012, with a much higher emphasis on auto loans and credit cards than their larger bank counterparts. Not surprisingly, credit unions and community banks will also continue to market free checking accounts, while large banks will focus on fee-based checking. Finally, both community and larger banks will be focusing on small businesses this coming year, doubling the percentages found at credit unions.

Marketing and Media Tools

As noted in our original analysis, traditional marketing channels will continue to be used by all classes of organizations, with only print looking to have significant potential reductions based on our survey. As expected, banks and credit unions will be increasing their emphasis on digital and online marketing with onboarding programs also getting more attention across the board. Interestingly, there was virtually no statistically significant difference in the marketing tools that will be emphasized based on the type of organization for the coming year.

While most of the trends in use of online marketing tools by the different organizations were consistent, one of the most surprising findings as we analyzed the results by type of organization was the significantly higher use of social media and estatement advertising by credit unions compared to both community and larger banks. While this may change in the future, the ability to have front-runner status at this time may be advantageous for credit unions if their underlying strategies and measurement of results are sound.

Social Media Use

It appears the primary reason for the differentiation between banks and credit unions in the social media space is due to the much higher presence on Facebook by credit unions than by banks. Being local in nature, this makes sense to build this community following, but it will be interesting to see what is done with this channel and whether financial organizations are using this simply as a landing zone for members or if this channel becomes an effective marketing tool.


  1. Thank you for sharing this post.. I work quite a bit with both financial institutions and credit unions.. this is very useful..

  2. I'm going to use this research when talking about credit union marketing for sure!