COVID-Era Marketing Challenges Credit Unions

During the Great Depression when millions of Americans lost their jobs, credit unions demonstrated the difference of the young movement by providing much-need credit to members who were turned away for loans by commercial banks.

When the coronavirus crisis hit, leading to a collapsing economy and the biggest job losses since the Great Depression, credit unions quickly sprang into action by providing a variety of loan relief options, fee waivers and other financial benefits to support members. Those actions will go a long way to strengthen member loyalty and also generate positive word-of-mouth marketing in credit union communities.

Beyond that, credit unions are concerned about how much marketing, if any, they should do because they don’t want to be seen as insensitive to the health and financial challenges many consumers are facing. However, life is continuing on, and consumers still need products and services. And in the age of COVID-19, marketing presents a rare and wide-open opportunity to demonstrate how and why credit unions are different from banks.

What’s more, consumers said it’s OK to continue marketing. Sixty-four percent of U.S. consumers said it is appropriate for brands to advertise, according to a survey by the Kantar Group, one of the world’s largest market research companies. Nineteen percent of consumers said it was only appropriate for some brands to advertise and only 6% of American consumers said it was inappropriate for brands to advertise during the coronavirus.

“Those that say it’s appropriate for brands to be advertising say that life and the economy go on, and there is still demand for products and services, so brands need to advertise,” Kantor said. “And many say that in a constant news cycle about coronavirus, advertising provides a sense of normality or even a distraction and escape.”

Credit unions have sidelined the marketing campaigns they planned to launch this year before the coronavirus crisis hit. Only a few credit unions have decided to pause marketing efforts altogether, according to independent marketing professionals who serve the credit union industry.

Instead, it appears that many credit unions have opted to modify their marketing messages that offer empathetic help, support and hope for members, employees and their communities.

“Now more than ever, we believe it’s important to have resources you can truly count on. We’re emphasizing that point throughout all of our marketing initiatives at First Florida Credit Union – that you can trust us with everything from routine banking to securing the financing you need to move forward. When you’re ready, we’re here for you,” said Michelle Troha SVP of marketing for the $1 billion First Florida Credit Union in Jacksonville.

Since the pandemic began, First Florida shifted its marketing messages to reflect that new reality of financing during the coronavirus crisis.

“Our spring HELOC campaign comes to mind in terms of creative that needed adjusting during this time. The initial marketing message was focused on life’s “big moments” – like graduations and weddings – and how accessing the equity in your home could help you finance these special events and projects,” Troha said. “Our marketing team recognized the need to change direction quickly to ensure the campaign reflected the realities of what people are facing right now. With that in mind, we changed our messaging to ‘Give Your Home the Credit it Deserves.’ This is focused on harnessing home equity for home improvement projects, considering that people are spending much more time in their houses to protect against the virus.”

Meredith Olmstead, CEO and founder of FI Grow Solutions in Stamford, Conn., acknowledged some of her clients have placed a pause on their social media ads.

“Typically their central worry is around the potential negative comments or reviews should a customer be unhappy with options being provided,” she said.

But this may be shortsighted, because marketing during a recession while competitors pull back gives credit unions a wide open field to stand out in their market, drawing consumers who need financial products and services. Moreover, social media ads now cost less than half of what they cost in recent months because many businesses have cut their ad budgets, according to FI Grow Solutions.

Among Olmstead’s clients that have decided to keep on marketing, they have changed their messages to be more sensitive to the health crisis and mindful of the uncertain financial future for everyone.

For example, a mid-size credit union in Dallas ran an Instagram story to promote ways it is helping members during COVID-19. The ad linked to the credit union’s disaster relief page that highlighted a variety of helpful resources for members. In about a week, the Instagram ad reached 13,900 people and generated 105 landing page views at an average cost of $0.98 per view, Olmstead said.

To help members save money via car loan refinancing, another midsize credit union posted an online ad that stated it was substantially reducing its interest rate to lower monthly payments.

“In just seven days with a fairly small budget, the auto loan ads reached almost 11,000 people and generated 322 landing page views at an average cost of $0.40 each!” Olmstead said. “These auto loans would typically cost closer to $1.50 per page view.”

Leveraging video communication can be an effective and transformative way for credit unions to bridge digital experiences with human experiences for members and nonmembers who want a rock to hold onto in the chaotic sea of the coronavirus crisis, James Robert Lay, CEO and founder of the Digital Growth Institute in Houston, noted.

For example, using social distancing best practices, credit unions may consider producing videos that promote local businesses that have been hit hard by COVID-19. For example, they might feature a local gym owner demonstrating how to do different types of exercises at home or show how a local restaurant chef cooks up one of his or her most popular dishes.

Lay said Strategy Core in Nashville, Tenn., which provides retail checking solutions for credit unions and banks, launched a weekly “Happier Half Hour” video presentation that promotes local businesses and raises funds for them.

Last month, a local barber showed Strategy Corp Partner Dave DeFazio how to cut his own hair. More than $1,000 was raised for local barbers.

Using this type of video presentation to bring members and local businesses together can create messages that members and nonmembers will remember.

“It shows that we care, that we are bringing help and hope, and we’re building a sense of community even if that community is digital because the message is that even though we are apart, we are still together,” Lay said.

He also recommended that CEOs and other executives leverage video. He said Rhonda Hotard, president/CEO of the $314 million Louisiana Federal Credit Union in La Place, La., regularly uses video to communicate with members and employees who are working remotely.

“She’s providing updates on everything that’s going on to give people clarity and to give them a sense of hope,” Lay said. “She’s also been able to field questions from people in the community. Her videos have been viewed 2,000 to 3,000 times now. Communications is going to be the biggest differentiator between those [credit unions] that come out of this on a positive end and those that will come out of this struggling.”