Which trends should credit union marketers be watching this year? Are there major changes and evolutions that you should be paying close attention to?
To find out, we went through a host of recent industry reports from top research firms, consultancies, and analysts. From that work, we identified a few key shifts in channel effectiveness, technology use, and member behavior that have the potential to impact the marketing efforts of every credit union.
In particular, these five trends are worth watching closely in the year ahead:
1. Paid Digital Channels Will Continue to Deliver Exceptional Returns
Credit union marketers are clearly aware of the transformational power of the Internet, yet they have been slow in general to fully commit to digital tactics.
Last year, only 27% of credit unions said the adoption of digital channels was a top priority, compared with 63% of large and regional banks.
Across the financial services industry, spend on traditional channels still significantly outweighs digital spend: 50% of organizations commit less than 20% of their marketing budget to online marketing.
This year, that’s set to change. Firms say they’re planning to increase their digital spend across the board, with marketers most bullish on paid search (56% plan to increase spend), paid display (52%), paid social (57%), and paid mobile (48%).
Why this rush to spend on paid digital? Because it works. The sophisticated targeted options of these platforms combined with measurable ROI make them exceptionally effective. Savvy credit union marketers would do well to invest heavily in these high-performing channels in 2018.
2. Members Will Increasingly Embrace Financial Digital Tools
Over the past few years, many consumers have quickly shifted from using brick-and-mortar branches for their financial services needs to using digital platforms.
Some 46% of U.S. banking customers say they now tend to skip branches altogether—up from 27% in 2012—and that they instead rely primarily on smartphones, tablets, and computers to interact with financial organizations.
Not surprisingly, younger consumers are leading this trend: some 82% of smartphone owners ages 18 to 24 say they utilize a mobile banking app.
Currently, most people use digital platforms to conduct basic self-service financial tasks, such as making deposits and checking their balances. However, that’s by no means the full range of capabilities that they’re open to utilizing—more than half of U.S. consumers say they’re willing to rely on online/computer-generated tools for investment advice, recommendations on which types of accounts to open, retirement planning advice, and insurance coverage advice.
What does this mean for credit union marketers? Most importantly, that online and mobile platforms are increasingly a primary, not secondary, engagement channel. If you want to promote products/services and serve members’ needs, it’s becoming essential to have sophisticated, feature-rich digital offerings.
3. Chatbots Will Usher In the Era of Artificial Intelligence
The use of artificial intelligence (AI) by financial services organizations may sound like a futuristic prediction, but the reality is that it’s already happening. In fact, some 32% of executives say they’re currently experimenting with utilizing AI-powered approaches such as predictive analytics.
While many of the most exciting uses of the technology are still on the cusp of being able to be used widely, one is fully ready for primetime: chatbots.
These AI-driven tools can deliver 24/7 customer service cost effectively and at scale. No wonder, then, that financial service executives are excited by their possibilities: some 80% view chatbots as an opportunity and 57% believe chatbots will eventually take over at least a quarter of all customer conversations.
There is a range of different applications of chatbots by credit unions—from recommending products to delivering advice—but the most important may be their ability to quickly resolve common problems. Why is this so key? Because loyalty increases by 58% when financial organizations are able to properly handle member issues.
Financial services executives say the main reason they plan to adopt AI solutions is to improve productivity. That makes quite a bit of sense. Offerings like chatbots are capable of handling all sorts of low-level tasks, freeing up staff to help with the most difficult and pressing challenges. This is a true win-win—chatbots increase efficiency, create a powerful new marketing channel, and make members’ lives better.
4. Members Will Want Coordinated In-Person and Digital Experiences
While the rise of things like digital advertising platforms, mobile financial tools, and online chatbots is essential to watch, it’s also important to keep in mind that branches remain vitally important for both members and credit unions.
However, people don’t just want the same offerings as in the past. Some 79% of financial services consumers say that optimizing the customer journey across touchpoints is very important. In other words, members now want their in-person experiences to be intertwined with their digital experiences.
The organizations that will succeed going forward are those that aren’t purely traditional or purely digital, but rather a hybrid of both. Why? Because that’s what consumers, especially younger ones, respond to best. Overall satisfaction among Millennial consumers of financial services who use both branches and mobile offerings is 20 index points higher (on a 1,000-point scale) than among those who only use the branches, and 37 points higher than among those who only use mobile offerings.
Currently, just 27% of financial services consumers say the organizations they utilize seamlessly integrate their branch, mobile, and online offerings. That means most credit unions have a lot of work to do in order to deliver the high-quality omnichannel experience that members desire.
5. Credit Unions Will Need the Right Staff and Culture to Keep Up
Some 90% of financial services executives believe that digital technologies are disrupting the industry, yet just 46% think their organization is adequately prepared for these changes.
What accounts for this gap? There are a number of reasons, but the biggest is staffing: only 28% of executives believe their organization offers employees the resources and skill-development opportunities needed to thrive in a digital environment.
Moreover, credit union contact center managers say their biggest challenges to success are handling volume, losing staff through attrition, and not having enough budget for the staff they need.
The problem isn’t just about educating employees and hiring/retaining enough staff, it’s also about creating the right culture. The financial services industry employees who feel most ready for digital disruption say they work for firms that are agile, collaborative, and less hierarchical.
Why does this matter for marketers? Because even the most sophisticated, forward-thinking, digital-first marketing plan is doomed to fail if the organization doesn’t have the right staff and structure to execute it well.
That highlights another major trend: traditional divisions between expertise areas are becoming less and less meaningful. Succeeding in 2018 will require marketers to think about everything from digital product development to in-branch experiences and employee education. Ultimately, just as the credit union marketplace is becoming more complex, so too is credit union marketing.
MDG Advertising, a full-service advertising agency with offices in Boca Raton and New York, NY, is one of Florida’s top branding firms. MDG’s capabilities include print advertising, direct mail marketing, branding, logo design, creative, digital marketing, media buying and planning, radio and TV advertising, Web design and development, online video advertising, infographic development, email marketing, content marketing, inbound marketing, lead generation, social media marketing, and SEO. For the latest trends in credit union marketing and branding, contact MDG Advertising today at 561-338-7797 or visit mdgadvertising.com.