The lessons of the Great Recession are critical to navigating today’s challenges.
As marketers, many of us already survived uncertain times. When the housing market crashed in 2007-2009, there were numerous challenges for financial institutions like credit unions. This was especially the case in what is known as the sand states:
Areas like Tampa, FL were especially hard hit offering us a front-row seat as these unprecedented events unfolded before us. Some of our staff were marketers at credit unions affected, others sat on the Board of Directors of those affected here locally.
The lessons we learned during that challenging time are equally relevant in the uncertain times we’re living in today — perhaps, even more applicable today than before.
These are some of the lessons we learned, along with specific action items you can put into place now, to help you better position your credit union during these uncertain times.
Lesson #1: Increase Communications
Many credit unions are making a critical mistake during this time by cutting off their marketers and marketing efforts. Instead of freezing your marketing investments, now is the time to shift the focus of your marketing efforts.
The big picture is simple:
[ Gross income – Operating expenses – Provisions for Loan Loss – Cost of Funds = Net Income ]
Most marketing is geared toward boosting gross income – new members, more loans, deepening member relationships. However, it’s equally important that marketing is used to offset your operating expenses, provisions for loan loss, and possibly costs of funds.
For example, it’s common for credit unions to cut costs during uncertain times – and marketing is usually one area to be slashed first. In anticipation of charge-offs, credit unions will use those cost savings to offset losses. However, being proactive and using your marketing dollars to communicate with members about relief options and financial solutions, your institution will likely prevent even more charge-offs in the future.
When it comes to credit union marketing, the worst thing you can do is remain silent. You need to communicate more frequently with your members and with greater discipline. Before you begin working to communicate more frequently, you should have a team in place to:
- Determine your standards for communicating.
- Develop communication protocols for your credit union marketing endeavors.
As you seek to navigate the uncharted waters of these uncertain times, communication remains an important means to keep your members informed about changes in strategy and to let them know that you’re in this fight with them. Ultimately, you become the calming influence that signifies stability your members need most right now.
Lesson #2: Rebrand Your Collections Department
“Collections” tends to have a negative connotation among the general public. So much so that many credit union members were reluctant to reach out for help during the Great Recession.
Many people feel that everyone is in the same boat so they ignore their financial woes until they become overwhelming. When this happens, they often retreat even further, seeking to avoid collections instead of turning to them for help.
Rebrand your typical collections department into something that exudes sympathy and understanding, such as the “Recovery Department” or “Member Solutions Center.” Make it a place credit union members can go for help without fear of judgement or criticism. Rebrand into something people seek and reach out to for help, rather than avoid. This can be a huge boon for your credit union today and in the future.
Lesson #3: Simplify Your Relief Solutions
The simpler the solutions, the more people are willing to take advantage of them. In uncertain times, such as these, that’s the best way to go.
It’s important to not only make your credit union members aware of their options, but also make sure they understand them, too. Also, most importantly, make sure these options are easy to find.
Keep updates on branch operations and financial relief programs on a single page on your website. Many members will bookmark this page. If you keep adding new pages referencing relief programs, members may miss the most up-to-date information. Be sure to add a date at the top of the page when changes occur so members know they are looking at the most recent version. A single page option also makes it easy to pin it at the top of your social media platforms.
Lesson #4: Explain Your Programs
It is essential that your members understand the truth about your relief programs so they can make informed decisions about what is best for them. It doesn’t matter if you’re the hero today if your members find themselves in dire financial straits 90 days from now due to improperly explained forbearance guidelines and such. They will end up resenting you for failing to notify them of possible consequences of accepting certain “gifts” today with a high price-tag three months down the road.
Be proactive and actively train your employees to handle member questions correctly. Provide simple scripts that all employees can use when answering member inquiries on relief programs, mortgage forbearances, and other financial solutions.
Use your credit union’s blog, website, and social media platforms to actively educate members on these programs and other financial solutions being offered by outside institutions. Many big banks are failing to educate members on mortgage forbearance programs and are already dealing with swarms of angry customers.
Educate your members about the good, the bad, and the ugly of relief programs available to them so their decisions are founded in facts and with the full knowledge of potential problems.
Lesson #5: Remind Members Why Credit Unions Exist
Those of us within the industry appreciate and respect the credit union movement. However, many members may not realize most credit unions in the United States were born from the Great Depression as a means to provide credit for individuals and promote thrift. The Federal Credit Union Act was signed in June 1934 by President Roosevelt and gave authority to federally-chartered credit unions in all states.
Use your website, social media, and other communication channels to share this knowledge with members. Let them know that credit unions were founded for both the good and challenging times, such as right now.
Lesson #6: Stay Positive
Above all else, keep your messaging positive and hopeful. These are uncertain times and there is plenty of doom and gloom to go around. Acknowledge the uncertainty and present the opportunities times like these create.
Be empathetic in your messaging. Choose your words carefully to let your members know you’re in this with them. Display the characteristics that attract members to credit unions in the first place. This is your opportunity to shine!
People are confused. They are worried. Employers are facing unprecedented hardships and many families are struggling. There is simply too much that is unknown about the future.
Be their rock. Offer reassurance. Provide solutions. Become the resource people look to for answers. And, for hope.
Credit unions were created to help your communities. Your credit union members need help now more than ever before – even more than during the Great Recession.
We’re Here for You
STRATIX Marketing was founded in 2007 as the housing market was teetering on its eventual crash. We learned a great deal during those first few years, including the formation of a completely different view of marketing’s role in managing a credit union’s financial performance.
Our team is here to help this great movement move forward. From financial reviews and adapting marketing to play a larger role in credit unions’ strategic plans to creating consistent messaging and educating members, we’re in this together.
Contact us today to learn the many ways we can help your credit union emerge stronger from these challenging times.