Every credit union would like to be every member’s primary financial institution—the place they turn first whenever they have a new financial need, concern, or goal. And while it’s always taken time, effort, and a well-crafted strategy to build long-term relationships with members, it’s fair to say that journey has become even more fraught in recent years as credit unions find themselves competing with fintechs and other new players in the field.
That’s why “lifecycle marketing,” as it’s commonly called, is becoming increasingly important. The process is intended to go far beyond “top of funnel” marketing efforts, which typically dominate marketing strategies, and to focus on “moments of magic,” as Ben Stangland and Charlotte Boutz-Connell of Strum put it on The Remarkable Credit Union podcast. It is during these moments when you are going through a life change and are open to having a conversation about a deeper relationship with your financial institution.
Simply put, lifecycle marketing is not just about getting members in the door, but about effectively and continually engaging with them, converting them to promoters, and being there to help them at key moments in their lives in the right way, all of which improves your long-term return on investment.
As you create your own approach to those six stages, here are three key dos and don’ts to keep in mind.
1. DON’T base your marketing on demographics only
Credit unions have long attempted to continually engage their members by reaching out at critical junctures in their lives with timely product offerings—for instance, student loans and first cars for members in their late teens and early 20s, mortgages to those in their 30s, mortgage refinancing to members in their 40s, and retirement accounts as members hit their 50s and 60s.
But looking only at member demographics can get you into trouble. Allison Netzer and Liz High, authors of Think Like a Brand, Not a Bank, use a great example to illustrate the perils of focusing only on demographics. They highlight two men who look an awful lot alike on paper. Both were born in 1948 in England, have two children and have been married twice. And both are wealthy, having found success in their various business dealings.
One of these men is Prince Charles; the other is Ozzy Osborne. And unless Prince Charles has a hidden proclivity for destroying hotel rooms or Ozzy has a little-known affection for traditional architecture and double-breasted suits, it’s likely safe to say the two men have little in common.
It’s also important to recognize that more and more adults are following divergent life paths. For instance, according to Motley Fool, the median age of a first time homebuyer was 29 in the 1970s and 1980s; in 2021 it was 33. It’s also become more common for adults aged 25 to 34 to live with their parents: roughly 16% did in 2022 vs. just 9% in 1980. On average, first-time mothers were a historically old 27.3 years in 2021, according to the CDC, vs. 24.6 in 1970. And that’s not to mention how many more women are not having children at all.
A young adult who can’t afford rent, let alone a mortgage, may feel insulted by first-time homebuying offers, just as a middle-aged woman who has made a decision to be childfree won’t feel known or respected if she gets inundated with promos for youth accounts.
DO build a data-driven culture to glean insights into your members’ financial needs
We live in a world that’s awash with data, but all too often, it’s not getting used effectively.
According to this article from The Financial Brand, a survey by Capgemini found that 73% of financial executives have a hard time turning data into useful insights—and even more (80%) struggle with data reliability.
Those data challenges could be costing your credit union long-term relationships and impacting your bottom line. For instance, that same article cites a recent World Retail Banking Report that found consumers want their financial institutions to deliver personalized experiences that connect with them emotionally and integrate with their lifestyle. Sadly, almost half of survey respondents reported their financial institutions weren’t delivering.
And a study from McKinsey (also in The Financial Brand article) found 72% of consumers expect the companies they buy from to know them and will handsomely reward those that are good at personalization: Companies that are winning the personalization challenge generate 40% more revenue (across activities that are personalized) vs. those with average personalization skills.
The reality is that personalization efforts are only as good as the data they draw from. In fact, personalization based on bad data can be more detrimental than no personalization at all. Credit unions certainly have access to plenty of data, but simply having data and investing in the tools to analyze it isn’t enough.
In a previous CUInsight article, Want to be a data-driven credit union? Start with your culture, I argued that a data strategy will only be effective if your credit union invests in a data-driven culture—one that unites team members at all levels and in all departments. Once you have shared buy-in and access to good data across departments, it’s important to marry demographic and behavioral data to continually refine your personalization efforts. If a member in their 20s is consistently clicking on content about IRAs and ignoring your student loan emails, it might be time to re-evaluate what you’re marketing to them.
2. DON’T always lead with products when engaging with your members
It can be tempting to put product promotion at the heart of your member communications. But as we mentioned in an earlier CUInsight article, 5 things we hope credit unions keep doing in the new normal, it’s critical that your member communications focus on products AND purpose. After all, products are useful, but not particularly inspiring. It’s a credit union’s commitment to community and member financial well-being that is most likely to convert a member into a promoter.
So, if you’re being tasked to build deposits, go ahead and let consumers know you’ve got amazing CD rates. But make sure you also emphasize the impact those great rates will have on your member’s overall financial success and that by getting their CD at your credit union, they’re playing a bigger role in supporting their fellow members and the community overall.
DO put financial wellness at the center of your business model
As we stressed in last month’s article, Personalization, products, and partnerships: The 3 Ps of impactful financial education, when it comes to their finances, most Americans are struggling. As per The Financial Health Network’s 2022 Financial Health Pulse™, 70% of Americans are either financially vulnerable (15%) or financially coping (55%).
One way your credit union can make a difference? By viewing everything—from your products and services to your marketing and overall strategic plans—through the lens of member financial wellness.
When Gigi Hyland, Executive Director of the National Credit Union Foundation (NCUF), joined our Remarkable Credit Union podcast at the height of the Covid pandemic, she had a lot to say about the power of empathy and how to put it into action at your credit union. She encouraged credit union leaders and marketers to step back and really get to know their members. What are their individual stories and dreams, and how do these guide your strategy? How do you move from selling your members products to helping them leverage a product to solve life challenges?
3. DON’T stop with loyalty/rewards programs to retain loyal members
I confess to loving the free cup of coffee my local shop rewards me with after 10 punches. But am I truly more loyal or dedicated to that coffee shop and do I feel like my punch card has deepened my relationship with them? Not really.
Which should make us question how much loyalty credit unions create with their coffee punch card equivalents: debit and credit card reward programs.
Those programs are strictly transactional and participation is based largely on the payoff—the cash back or points—rather than a meaningful and personal relationship. This isn’t to say credit unions should stop funding debit or credit card reward programs: they’re table stakes in today’s highly competitive card world. But when it comes to true relationship building, credit union marketers need to do more.
DO ask members what they need—and show them you’re listening
We’ve all made assumptions about what members need. But true commitment to building and supporting long-term relationships means we need to do better—and that means asking members what they need and acting on what they share.
Maybe these insights will inspire you to build on your loyalty program with rewards that are more meaningful to members, like Beneficial State Bank’s Climate Card, which enables its customers to support climate-related nonprofits or VSECU’s VERMONT Platinum Visa® credit card, which offers a lower interest rate on local purchases.
But more than likely, you’ll also gain insights that go far beyond credit card rewards. During Covid, one of our clients linked a survey from their website alert bar to better understand their members’ current financial needs, and received over 8,000 completed surveys! The stunning response certainly spoke to members’ heightened financial anxieties and a need to feel heard.
There are a lot of great digital channels for soliciting feedback, and it’s best to meet your members where they are. That’s to say, don’t rely on one channel only. Consider:
- Utilizing online surveys and promoting them via alert tools on your website
- Asking questions or soliciting feedback on social media
- Including calls for feedback and story sharing in your email newsletters
- Asking your blog readers to email you their responses to questions you pose in your posts
- Organizing virtual office hours, community roundtables, or town halls
- Building opportunities for member story sharing into existing communication tools, like your contact form, call center scripts, or post-transaction surveys
But what about your members who are less likely to utilize digital channels? It all goes back to proactive member outreach and meeting members where they are. Sometimes we forget we can pick up a phone!
Of course, reaching out to your members is only one piece of the puzzle—you also want to show them you’re listening. Sometimes we overthink what we need to do to deliver. As George Hofheimer, former Filene EVP, once put it, the “coolest innovation…is usually the most boring innovation.” That’s to say, we don’t necessarily have to reinvent the wheel or scrap our marketing strategy to respond to member needs.
Plus, as Hofheimer points out, we often overcomplicate member research, believing we have to pay a fancy firm to conduct focus groups or talk to hundreds of members. When it comes to assessing member needs, he asserts, usually talking to 20-25 members will get you 90 percent of the way there.
The most essential part of the listening process is completing the feedback loop. If you made a change based on insights from your members, let them know!
In this digital day and age, it’s easier and easier for marketers across industries to fall prey to the Shiny Object Syndrome. While new trends and tools can certainly aid us in lifecycle marketing, a credit union doesn’t need fancy technology or a hefty marketing budget to build loyalty and trust. Lifecycle marketing primarily requires patience, commitment, and a willingness to listen—because at the end of the day, the one thing all members want is to feel seen and heard.
This article was originally published in CUInsight.