How to Win This Budget Season

Budget season is upon us, and that means it’s time for one of the most debated questions in the credit union world: “How much should we spend on marketing?”

The answer is simple: More, much more.

All joking aside, if you want to grow your credit union, you must market. Growth demands a healthy marketing budget.

Where many credit union leaders go wrong is assuming marketing is another line-item expense. It’s not, and here’s why: Expenses take from the bottom line without generating a return; investments cost but collect a bounty down the line. Marketing, done right, is an investment.

Here are seven ways to build a marketing budget that maximizes that investment.

1. Start with Strategy

Many organizations budget backwards. They start with how much they’re “allowed” to spend and generate marketing goals from there. This limits strategic thinking.

Instead, start with the big picture. Your order of operations for a strategy-first approach to budgeting should include:

• What are our credit union’s strategic goals for the coming year?
• What marketing-specific objectives will help accomplish those goals?
• What marketing tasks do we need to undertake to complete those objectives?
• How much money do we need to complete those tasks successfully?

For example, is your goal to get more members? Increase loan applications? Each of these goals requires a different marketing approach and, therefore, a different budget.

2. Bank on Data

The key to crafting a marketing budget that works is data. You must know exactly what works and what doesn’t in order to know where to spend your dollars.

This sounds simple enough, but the reality is many credit union leaders (like all of us) can get caught up in the glitz and glam of new technology that doesn’t ultimately serve the credit union’s goals.

For example, while most marketing spend is swinging toward digital, traditional marketing isn’t dead. It’s just changing. When you have data to support what works for your unique market and goals, you make better decisions.

For others, it’s your board. Maybe your board wants you to continue with a marketing tactic that doesn’t work anymore. When you base the conversation on data, it becomes hard to argue with the numbers.

While controversial, here some items that likely don’t have enough ROI data to support being included in the marketing budget:

• Your annual meeting
• Your CEO playing golf
• Your MCIF system (in most cases this is better allocated as a technology expense)

As economist W. Edwards Deming said, “In God we trust; all others, bring data.”

3. Don’t Compare Yourself to Your Peers … Or to Your Last-Year Self

An old adage warns, “Comparison is the thief of joy.” When it comes to budget season, comparison is also the thief of success.

Your competition is the worst place you can look to for budgeting guidance. There are too many different factors at play. They have different goals, different objectives. The variables are different for them than they are for you.

Even your own budget from previous years is not an appropriate benchmark to guide your next marketing budget. That was then; this is now. Don’t be afraid to ask for more, or less, as your goals require.

4. Add Detail to Your Marketing Budget

Don’t limit yourself to three or four marketing GLs. Doing so will not provide you the detail and clarity you need for an effective marketing budget. Your marketing budget should be as detailed as possible. For most credit unions, at least 15-20 marketing sub-GLs is the sweet spot.

5. Remember the Big Picture

It’s important to keep in mind the yearly view of your marketing budget. Perhaps what you budgeted for in the first half of the year is more than the second, in which case credit union leaders need to remember that an early investment will pay off in later months. Review the budget every month so you know exactly where every dollar is going throughout the year.

6. Know Your Strengths

Your marketing budget manages two things: People and resources. The key is to maximize both.

Most successful marketing departments include a marketing strategist, copywriter, graphic designer and videographer. There are very few “unicorns” who can wear all these hats effectively, and yet many credit union marketers try.

For example, you may be an excellent writer but not a skilled graphic designer, so your marketing pieces don’t stand out. Or maybe you’re a skilled graphic designer but not a writer, so your message gets lost.

One way to solve this problem and maximize dollars is to hire an agency that can give you a copywriter, designer, strategist and videographer for the cost of one of those full-time positions.

A credit union that did this well is Southwest Financial Federal Credit Union ($83.4 million, Farmers Branch, Texas). Their marketing director’s true skillset was in business development, a critical asset for this SEG-based credit union. They made the strategic decision to move this employee’s focus to business development and hire a marketing consultancy to do the day-to-day marketing. Now the credit union is maximizing its resources and getting the most out of its marketing budget.

7. Conduct a Marketing Assessment

The best way to determine if you’re spending enough, too much or too little is to conduct a marketing assessment that analyzes your strategy, your output and your budget in order to recommend where to focus your efforts. We all have blind spots, and a marketing assessment shows where those blind spots exist.

Our team developed a formula that determines what your marketing budget should be based on key factors such as your field of membership, your media market, what type of credit union you are and your growth goals for the coming year.

Apple CEO Tim Cook famously said, “We believe in investing during downturns.” Whatever the economic future of 2025 holds, planning now to make marketing an investment will set your credit union up for success.

Mark Arnold is founder and president of On the Mark Strategies, a Dallas, Texas-based consulting firm specializing in branding and strategic planning for credit unions.