Marketing is a results-driven industry and credit union marketing is no exception. Everyone wants to know if the latest campaign is working and if the money and effort spent on it were worthwhile. Credit unions face unique challenges in this effort because they can’t look at something as simple as a bottom line. Making matters worse, most people engaged in marketing tend to treat it as a bunch of little projects rather than a series of steps in a grand strategy. Did you know that only 35% of marketing professionals have a documented strategy?
The problem with tracking return on investment (ROI) isn’t generally having too little data; it’s having too much. Your credit union can, and probably does, track click-through rates on ads, pageviews on blogs, retweets, shares, likes and a million other numbers. The digital revolution has provided credit union marketers with more data than ever before, which allows them to see exactly how and where their messages are being seen. The challenge lies in sorting the metrics that matter most and being consistent in monitoring them. It’s discouraging to a lot of marketers—industry wide, only 21% are effectively tracking their ROI.
In the broadest terms, ROI is simply the ratio of profit from a campaign to the cost of the campaign. In the simplest context, add up all the costs of a marketing strategy, from content design to placement, and subtract that number from the revenue generated by the campaign. Divide that number by the initial cost. This represents the amount of money that is brought in for every dollar that was spent on the campaign. In the for-profit banking sector, that’s as far as the conversation goes. For credit unions, the thinking is a lot more complex.
For CU marketers, the advertising challenge is about more than profit maximization. It’s about relationship building. From this perspective, it’s a little easier to figure out what matters. Like most other forms of marketing, success comes down to how well you know your audience. If the objective of a campaign is to attract new members, for example, then likes, shares, and visits might be considered reliable measures of success because they establish greater exposure, which conceivably extends the reach of your marketing efforts to a bigger audience. Metrics like your lead conversion ratio, in combination with average number of services and the relative profitability of these services, can help marketers calculate ROI for a new membership campaign.
If the campaign targets existing members, then statistics centering on message spread (retweets, views, likes, etc.,) are less important. You’re not trying to reach the public. You’re trying to reach your own membership. Instead, metrics such as the click-through rate for calls-to-action and cost-per-acquisition are more effective measures of how well your message is being received and acted upon. While you can’t attribute 100% of your new service utilization to your campaign, it makes sense that some of the change you’re seeing is about your strategy.
More broadly, you may need to reevaluate your whole strategy to figure out if your approach is on track. If you’re getting positive member feedback, acceptable growth rates and good responses to new services, stay the course. If, on the other hand, the feedback you’re getting isn’t always the best, it might be time to shake things up.
Sometimes, though, the best way to figure out what messages are reaching your members is to ask them. Bob Maxwell, vice president of Greylock Federal Credit Union’s marketing group, says his organization conducted a member survey that included questions about members’ media preferences. The results? Less than 1% prefer to receive paper newsletters. This development encouraged Greylock to place greater emphasis on electronic communication.
Lori Johnson, vice president of marketing and business development at TelComm CU, says her best member-target data gathering strategy is to just listen to members. Many times, what they aren’t saying is as important as what they are saying. If your CU just made a change, and no one’s asked you about it, then they didn’t know about either the old policy or the new one.
The modern digital marketing strategies haven’t made the old ways of data collection obsolete, and it’s definitely possible to do both. Take the word of mouth news from members and use it to explain what you see in the numbers. If conversion rates are low but members are happy with the service being advertised, your message design may be the problem. Thinking about ROI for your marketing dollar is the best way to figure out if you’re spending time, effort, and dollars in ways that are best for the future growth of your credit union. While the raw calculation isn’t as easy for CUs as it is for for-profit businesses, the value of the number remains the same. You want to put your dollars where they do the most good, and getting the highest ROI for your marketing buck is the best way to do that.