One of the most common questions I get is, ‘how much should we spend on marketing?’ If I had the magic answer to that, my bum would be sitting on the sand of a Cayman beach and not a care in the world.
A magic number doesn’t exist, however, here are four factors to remember to find the right answer for your credit union.
- Consider it re-investing in your credit union. Marketing is not a mere expense. I see claims as vast as 1% to 30% of revenue reinvestment is needed to experience desirable growth. Let’s find the middle ground. In 2022, Nielson found that the average brand re-invests 3.8% of its revenue back into marketing. However, that’s still not your magic number. That number should increase if you are up against big brands that have a larger share of mind in your market. That number will also depend on the maturity of your credit union brand and current share of mind in your market. All too often I hear, ‘We are the best kept secret!’ – instant red flag that you haven’t dedicated enough to brand awareness.
- How much are your competitors spending? Let’s dive deeper into No. 1. Your marketing budget shouldn’t be a copycat game. It’s always good to have an idea of what you are up against, but that shouldn’t dictate your credit union marketing budget. Consider how the (now Coca-Cola-owned) sport-drink brand BODYARMOR, which challenged the PepsiCo-owned Gatorade brand with a fraction of the latter’s budget, by targeting niche communities and building brand advocates. With less budget and a more intentional strategy, BODYARMOR tripled its market share over a two-year period.
- Identify a clear ideal member. Once you have done that understand the unique financial problems your ideal credit union member is struggling with and make a case for your solution. Our strategy at YMC is to find ways to educate and engage (and sometimes entertain) that ideal member to stand out from the clutter of the competition of big banks and fintechs. Once you know who your ideal member is, you can also narrow down where you are spending your credit union marketing budget for a better ROI.
- Are you playing the long game, or do you need quick wins? I’m not a fan of quick wins. I call it “cocaine advertising.” You do a hit, and when you stop you come off the high of growth and must go back and do it again. Bigger. And with more money. But sometimes it is necessary.
When you play the long game and play it well, you won’t see the instant results in 30 days, but over the course of 12 months you’ll be pleasantly surprised with your results.
As you navigate the complexities of planning your credit union marketing budget, remember that success will lie in finding the right balances. Reflect on the insights above, assess your budget against these, and be proactive in adapting to the evolving needs of your ideal member.
Outsourcing your marketing to an agency with experience in your niche is a great way to ensure clarity and strategic wins, so you won’t have to take a ‘hit’ again. Are you ready to navigate marketing in your FOM with precision while adapting proactively? Let’s talk!