Tough Economic Times Call for More Targeted Marketing

In tough economic times credit unions need to increase their marketing efforts. However, to get the most bang for their buck, they need to be more strategic and targeted in their marketing efforts. The economy has created havoc in the real estate industry which has caused many banks to fall into financial hardships. Despite that fact, credit unions continue to do well. Based on a report issued by Callaham & Associates, credit unions have found a way to transcend the economic turmoil and are performing at phenomenal levels. In fact, credit unions posted $60.9 billion in loan originations in the first three months of 2008, the highest volume ever for the first quarter. Lending activity was led by an incredible 53 percent jump in first mortgage originations versus first quarter 2007. Share balances are growing at the fastest rate in four years as dividend payouts continue to rise despite a falling interest rate environment. Credit union membership now tops 88.9 million.

What does this mean for Credit Unions? On a macro level, the financial services sector is challenged. Banks are seeing massive write downs and losses. Credit Unions, despite the growth that they are experiencing, can honker down and try to weather the economic turmoil, by refusing to spend. On the other hand this might just be the time to expand. Consumers that have become frustrated with banks might just be looking for more stability and security. Credit unions have proven themselves to be more stable. Hence this might be the time for Credit Unions to increase their market share by expanding their membership. A credit union however, does not want to be indiscriminate about how it adds new members- customized research needs to be done. Credit Unions can analyze their current membership to determine the most profitable members. Then they can use that information to construct a profile of the kind of members they need to attract. Such information can be tied to effective consumer research to design strategies that attract the right people. In fact Carolana Research & Marketing has developed a customer retention strategy that does just that.

Now is the time for credit unions to increase their market share by doing what credit unions know to do best . . . helping those in the community who are struggling to achieve financial fitness. This can be done in such a way that allows credit unions to maintain their financial viability while extending a lending hand. Targeted profiling will allow credit unions to identify profitable members who have benefited from the credit union’s programs. This allows for a more focused and targeted prospecting approach. Such an approach typically translates into less waste and higher return on investment. Carolana Research and Marketing has developed a model to help credit unions to become more targeted in their marketing.