By Margie Church, Copywriter/Editor
Cost efficient, profitable marketing begins with understanding who your core customers are. That shouldn't be surprising news, but sometimes when things aren't working the way we expect, or the market feels more volatile, we need to reflect. Especially at the start of a new year, a fresh reminder provides an opportunity to check your thinking before too much time, money, and effort are spent on marketing that may deliver less than stellar results.
Reading your original charter should provide good information about your core customers. We all know that over time, credit unions, like the members they serve, change. Unforeseen growth opportunities arise. These issues can distract from your purpose, and cause frustration and wasted marketing expense. Using data modeling is the efficient way to refocus.
Honing in with Data Modeling
Every now and then, we'll ask a client to define their core market and they can't do it. You may be surprised to learn many businesses never take the time or make the investment to succinctly define their most profitable customer. Having this information helps ensure you're protecting your core, and spending appropriately for future growth.
Marketing Customer Information File (MCIF) data is a fantastic tool that many credit unions use. If your CU is one of them, we applaud you. By appending MCIF data, you'll get a very robust description of your optimal member. To get there, choose a combination of markers such as:
- Credit score
- Number of years of membership
- Products currently used
- Products/services previously used
- Months before loan is satisfied
- Deposits/investments
- Proximity to branch
- Property taxes
- Age
- Gender
- Marital status
- Homeownership status
- Profession
- Income
Your Data Processing (DP) system can also provide some reliable insights to who your best customers are. If you're using only your DP system, we recommend making a firm commitment to mine this information for common traits among your members and organize the information for direct marketing.
Once you have a clear definition of your most profitable customer, you can design communications that appeal specifically to their needs. We believe that relevant, personal, and timely communications will boost your success every day of the week. The recipient won't feel they're receiving junk mail or that you're out of touch with what's going on in their lives. You'll have greater confidence and gain credibility that the marketing you do will be more successful than a program based on assumptions that may be outdated or off base.
Three Components of a Target Market
1. Your core or primary market already has a strong affinity to your credit union's services. Consequently, appealing to them is the least expensive, easiest, and most profitable. By gleaning key attributes of this group, you'll be able to tell whether a second mortgage, or a second home could be in their sights. Are they trading in the sports car for a family vehicle or downsizing completely? You'll know whether they are approaching their peak of profitability with your CU, or moving out of it. You've got the information needed to provide timely, relevant, and personal communications to retain their membership and business.
2. The secondary target has many of the traits of the core target. These secondary members may be younger, single, and on the leading edge of financial stability and need. In time, and with focused effort, these people can mature into the profile of a core member. By staying true to your data-driven efforts, you'll know when they move into that sweet spot of profitability. Formulate an acquisition strategy promoting products and services they've never tried.
3. The tertiary target matches the fewest markers in your primary or secondary membership profile. Pursuing them isn't a complete shot in the dark, but this reactionary segment is easily the most expensive to reach and the hardest to hold on to. They may join through persuasive advertising, including word of mouth (testimonials), and enticing offers. They're likely to take advantage of an offer only if you happen to get their attention at the precise moment they need it. They may be shopping for the best deal on a vehicle purchase, or become fed up with their current financial service provider. Your goal is to create awareness, so your CU's name floats to top-of-mind at the magical moment.
A prospecting strategy is needed in the open market to attract those who might be well-served by your current offer. By keeping in regular contact with those who snap them up, you can urge these people into the secondary group. It'll take time. How successfully you communicate with them during the first six months of membership is likely to determine whether you've got a member for life, or a dormant account waiting to happen.
Pinpoint Direct Marketing believes highest success is achieved when retention, acquisition, and prospect offers are present in every campaign. If you've been investing money and effort in marketing, with poor returns, I challenge you to examine who you're marketing to and why.
We'd enjoy hearing whether you use data in your marketing efforts and how it's affected your marketing results. What do you recommend?
