3 Data-Driven Strategies to Grow Deposits

There are dozens of large banks and other lending institutions that maintain a significant market share of the financial ecosystem – but despite the wide reach of these organizations, credit unions remain an indispensable part of the economy. Part of what makes credit unions indispensable are the positives that many tend to associate with them. Their firsthand knowledge of the community, lower loan rates and unparalleled customer service provide credit unions with a leg up on the competition. Unlike traditional banks and lending institutions, credit unions can offer customized products and credit assistance programs that meet the specific needs of their members.

Despite these advantages, there are inherent challenges that credit unions must overcome. Oftentimes, credit unions lack the resources of their larger counterparts, and must navigate geographic limitations and a smaller prospect pool due to their field of membership restrictions – which can be problematic for membership growth and ultimately loan and deposit activity. In an industry that relies heavily on lending to generate revenue, membership and deposits are critical to a credit union’s viability.

All Is Not Lost

To even the playing field and make these challenges more surmountable, credit unions need to shift their mindset and focus more heavily to data-driven insights – with the intent of reaching the prospects most likely to become members and open deposit accounts. With in-depth knowledge of their community and prospect pool, credit unions should double down and maximize their advantage. That means identifying the best members, understanding qualities and preferences, and reaching out to like-minded consumers. It’s a simple approach made more effective by data. And it can be accomplished in three steps.

1. Build the audience. Most marketers fail to define their audiences at a granular enough level. Segmentation by age, demographic, homeownership and income level is far too generic. Remember individuals in the same age range and demographic can have drastically different motivations and preferences. Credit union executives need to understand the variables that will impact their objectives – in this case, deposit growth. For example, will high-yield accounts encourage members to increase deposits? Is there an introductory incentive to open an account and deposit funds? The process can be as simple as identifying the most profitable members, as well as those who deposit a high volume of funds, and developing a lookalike prospecting strategy.

But motivation is only part of the equation. Credit unions also need to determine where along the membership journey certain individuals fall. For example, is the prospective member hoping to open a new savings account? Does the member need to take out a loan? If it’s the former, credit union marketers can create communications that include references to introductory incentives, low minimum requirements and high-yield options. Perhaps the prospective member would like to obtain a loan, but has a limited credit history.

In an era where the member experience is critical, credit unions need to ensure they deliver relevant messages and communications that resonate with their audience. Building the right audience segments is the first part of that process.

2. Connect through preferred channels. Keep in mind that consumers should always be at the heart of every marketing strategy. Relevant messages only matter if credit unions can deliver them to the right members. So, credit unions should create an experience that caters to them, which also means reaching them through preferred communications channels and telling a consistent story. Since consumers engage brands through a number of channels, credit unions need to deliver true omnichannel campaigns – whether it includes social media, email, direct mail or TV. These elements shouldn’t work counter to each other or be outdated. For example, if an individual becomes a new credit union member, they shouldn’t continue to see messages encouraging them to sign up – rather these messages should focus on loan options, member benefits or ways to maximize their accounts.

3. Measure success. The last component to a successful data-driven marketing strategy is to effectively measure and attribute results. The more credit unions can connect member touchpoints together and connect to results data, the better positioned they will be to identify the most effective elements in the campaign. For example, did certain messages and creative resonate more? Was there higher engagement via email than TV? Which audience segments performed the best? The more insight credit unions can gain on campaign performance, the more they can optimize future campaigns and minimize wasted ad spend.

To remain a viable finance option, credit unions need to attract new members and increase deposits. And one of the most effective ways to do that is to cater to current members and prospects – to make them feel understood. The more credit unions understand about what motivates members, the better positioned they will be to create messages that spur deposit activity, as well as other priority objectives. And the higher volume of deposits that credit unions have, the more they can lend.

Christine Frohlich is Vice President of Product for Experian in Costa Mesa, Calif.