SAN FRANCISCO–In a world in which nearly three-quarters of one sought-after demographic say they would consider moving their financial relationships to Amazon, Google, Square or PayPal, credit unions are making a number of common—and critical—mistakes in how they are seeking to capture that market.
And yes, that market is the “f****** Millennials,” joked Chris Leone, before he turned serious in addressing a number of issues that need to be resolved, including where vendors are causing one of the “biggest problems” facing credit unions, how one free tool is being drastically underutilized, and what CUs need to do to “crack the nut” if they plan to capture a group that’s vital to their future.
Leone, president of Richmond, Va.-based Web Strategies, which specialized in driving leads and sales for small and medium-size businesses, told the CUNA Marketing & Business Development Council annual meeting that “this is the most important time to care about this group. And the problem is they don’t really know who we are.”
There are effective strategies available to marketers for getting past that barrier, he said, but most credit unions fail at doing so, he suggested.
A Diverse Group
Leone defined Millennials as those age 18-34 years old, and like others he stressed that label encompasses a diverse group at different stages in their lives. One-third are home owners, many are following a traditional life path, and the average Millennial household earns $65,000 annually. The big differentiator from generations before them? Most are carrying a lot of debt, he said.
As has been well-documented, Leone noted Millennials are also less brand loyal, and rate ease of use as more important than privacy.
“Millennials convert (to new providers) at a higher rate, but it costs more when they do,” said Leone. “Everyone is trying to crack this nut, so the advertising is more expensive. They are converting at a higher rate because companies are deploying a lot of tools. The most important point though is this is not an impossible nut to crack. You may even be having some success and not know it yet.”
Everything credit union marketers do falls into one of three categories, according to Leone: Attract, Engage, Convert.
“Attract” is about winning attention and getting eyeballs, he said. Engage is about getting attention, which is “easy,” with the challenge lying in “do they like what they see?” Convert is about whether or not the target market is “actually doing the things we ultimately want them to do.”
“The mistake most marketers make across all industries is they expect their campaigns to do all three of these things, and to do it fast,” said Leone.
Attraction
There’s a solid reason the big tech companies such as Google and Apple have moved into developing their own content—it’s what the market is seeking, Leone said.
“When I watch my three-year old I realize how vulnerable every brand in the world is if they are not creating their own media,” he said. “If a phone with a camera and an Internet connection can compete with enormous brands, then we should all be taking notice. Small brands should be frickin’ pumped. There are bigger names in their spaces with budgets smaller than yours.
“We can’t convert people if we are losing the battle of winning attention,” Leone continued. “Attention leads to engagement, which leads to conversions, which leads to loyalty. And guess what’s being collected in each stage of this process? Three things: data, data, data.”
Chris Leone speaking to CUNA MBD Council in San Francisco.
Another mistake credit unions are making, according to Leone, is using targeting that is “one-dimensional.”
“It doesn’t work, because everyone is trying to do that. The real magic is in a multi-dimensional, layered approach to our targeting,” he told the Marketing Council meeting. “You can go into Google Analytics right now to see what percentage of your visitors are 18-34 and see how they engage your site differently than others. You can turn on a report to give you demographics by age. This is an important step in the attract, engage, convert process. If you see they are converting at a higher rate but are only 10% of your traffic, you have an attraction problem.”
A Favorite Tool
Leone said Google Analytics remains among his favorite tools to use, as it allows him to drop a credit union’s online users into various buckets for analysis.
“For instance, you can say, ‘Show me everyone 18-24 or 25-34 who is not a member and who has seen our auto loan page, but didn’t complete an auto loan application.’ When those individuals go to Google search I can have a search in which only this audience sees my message. Or, I can set ads within their Facebook news feed. This is a much more relevant way to hit an audience; it’s a low-hanging fruit.”
Leone said credit unions should utilize their email lists, but not for email marketing. And they must recognize that email is not going away.
“I’ve been saying this for six years thinking it would be the last year I said it, but the number-one channel is still email,” he said.
Leone recommended credit unions take their email lists and then deploy ads against it on Google, Facebook and Instagram. “We’ve been able to get up to a 75% match rate on our audiences,” he said.
Leone noted that now Google and Facebook offer the ability to API into their systems so a CU can constantly let the data flow between systems automatically.
“Your marketing lists can be auto-populated,” he said. “This is the future; this is where it’s all going–interconnected systems that feed information back and forth to each other and use AI to find people who are most relevant to you and most likely to convert. The future is going to be really hands off in that regard. Credit unions are a little behind the times, but eventually they will get there.”
Engagement
Leone cited a recent study that found 80% of Millennials said their relationship with a brand is more personal than ever before, with 70% saying they want the brand to inspire them. The way to do that is through authenticity, according to Leone.
But that could be a challenge for many CUs, as Leone discovered. During his session, he asked his standing room-only size crowd, “How many of you can tell me what your brand stands for?”
No hands in the room were raised. “Holy shit, this is a marketing conference!” responded Leone. “Can your members explain your brand? I assume not if you can’t.”
Another mistake credit unions make, said Leone, is to try to move people out of the social media and information flow with which they are regularly engaged. Instead of attempting to force Millennials to pay attention to a print message or a TV commercial, the secret to success lies in creating campaigns inside the platforms that the audience is using, such as “lenses” on Instagram or filters within Snapchat.
On Instagram, Leone noted it’s easy to identify “influencers” with numerous followers. If an individual who meets a credit union’s goals can be identified, they should be contacted and offered some reward to attend an event the CU has planned and should let their followers know about it, he said.
“This is massively underpriced attention and it’s so easy to get. These are accounts people follow because they give a crap about this. But the price of this stuff is going up because these influencers are getting wise to it,” said Leone.
Convert
This last step is where the ROI lies, Leone said, observing, “If people don’t convert, it’s net zero.”
“Why would 73% of Millennials say they would bank with Amazon, Google, Square and PayPal?” he asked. “I think it has everything to do with the fact it’s easy. It’s because these brands obsess—obsess—over the customer experience and reducing friction. Dominos just became the number-one pizza company in the world. How did they do it? Not with excellent pizza. The real magic is they created this whole library of pizza-ordering tools. Not just a cool app; you can order pizza through text message, Twitter, Slack, Apple Watch, Pebble, Facebook, Samsung Smart TV and more. They understand younger users have a preference for brands that allow them to connect effortlessly.”
A credit union doesn’t need billions of dollars to achieve similar results, but it can’t be done without an obsession over consumer experience, he said.
“So how can credit unions do that? The lowest hanging fruit in my opinion is to understand how people move through your applications and website. Here’s the reality: most of us can’t even do it. Your vendor won’t do it or allow it. I think this is the biggest problem facing credit unions; the fact we can’t track how well people can do the one thing we want them to do. If you have the ability to do this, to obsess over how people use your applications. Obsess over how many members complete transactions. If not, it’s a huge miss.”
Another Huge Miss
Another huge miss, he said, is making excuses.
“I get it,” Leone said. “You say, ‘I love it, I want to do it, but… My boss doesn’t get it. My board doesn’t get it.’ Guess what? The market doesn’t give a shit about your problems. Consumers don’t care about your constraints or budget. They care about their experience. And if you’re not solving it, they will go to someone that does.”