I was recently interviewed by Credit Union Journal regarding my forecasts for marketing budgets for the second half of 2012 and also for 2013. I shared my belief that budgets for marketing, sales, and business development functions will continue to gradually increase during that time period. I also suggested that credit unions put more effort into cultivating their relationships with their existing members rather than trying to attract new ones. A couple people called me and wanted to know why I would suggest that credit unions not make efforts to get new members. That’s not exactly what I said and after I clarified this with the callers, they were my friends again. In no way was I saying that getting new members wasn’t important. What I was saying is that credit unions may be missing some opportunities by not reaching out more to the members it already has on the books.
So I thought it would be a good idea for me to give some reasons why it is wise to focus on existing members. Here are 3 such reasons:
It costs less. You’ve already got them in the door. They are already invested in the credit union. It costs nothing to have conversations with members that come into the branch about them using more of your services. It costs next to nothing to implement and use an effective e-mail marketing campaign. There is minimal cost (if any) to use online banking and bill-pay platforms for marketing and business development.
Existing Members Will Answer Your Phone Calls. Caller ID is a wonderful thing. Think about it….if your ID shows “Unknown Caller,” “800 Service” or “Out of Area” do you pick up the phone? Of course not. Chances are that your credit union members have a Caller ID feature on their phones. So when they see “ABC Federal Credit Union” appear on their ID, chances are also pretty good that they will pick up the phone. Why? Because they know you, trust you, and will be naturally curious why their financial institution is calling on them. Chances are also pretty good that they will be willing to speak to the credit union employee on the other end of the phone about whatever it is that they want to discuss – including the fantastic and exciting loan promotion that is coming up, the new mobile banking feature being rolled out, the _________(you fill in the blank.) Cold calling stinks. So why put your people through it? Let them call on people that will at least take the call.
It builds rapport and good will. If you continue to show your existing members that you are willing, able, and motivated to help them, they will continue to do business with you and they will be more willing to refer new those new members to you. Referrals come only if the referrer has a significant amount of trust that you will do right by the person who they refer. So, in essence, this achieves two goals – increasing the amount of business from your existing members AND will serve as a source for acquiring new members. And what credit union doesn’t want these things?
So focus on the people who already like and trust you. Make them like and trust you more.