Later this week, I’m reprising my highly rated (by the audience) presentation, originally given at this summer’s National Association of Federal Credit Unions (NAFCU) Strategic Growth conference.
The topic is social marketing but not from a “slam dunk,” “gotta have it,” “full speed ahead, damn the business case,” perspective. Rather the presentation examines whether there is any “there” there yet regarding revenue (specifically for credit unions, member acquisition, retention and non-account revenue).
Here’s the abstract from the NAFCU Annual Conference site, and I will post the presentation on SlideShare in the next couple weeks.
Social Marketing is Free so it Must be Worthwhile… Right? Well maybe, but BEWARE— don’t be drawn in by the ‘coolness’ of using Facebook, Twitter and interactive applications to market your credit union without some investigation. Before you launch a social media campaign that you’re sure will “go viral,” don’t forget these three simple letters: R.O.I. Even though setting up a Facebook or Twitter account, or even a blog, is free, there are hidden costs in terms of time, resources and budget. This presentation will explore how credit unions and other organizations are using social media and other Web 2.0 tools and to what degree they are successful.
Presented by Bob London, President and Founder of London, Ink, LLC
An Inside-Out Branding Guest Post by David Frankil, President of NAFCU Services Corp. (bio)
About NAFCU Services
The National Association of Federal Credit Unions (NAFCU) represents approximately 800 Federal credit unions. NAFCU Services Corporation is the for-profit, independent subsidiary of NAFCU that works with leading companies including American Express, Securian, Deluxe, Affinion and others, that provide services that help credit unions increase efficiency and productivity in areas such as member retention and acquisition, information security, new products and services and investment advisory services.
NAFCU Services has 28 ‘Preferred Partners,’ including American Express, NCR and SAS Institute, that are focused on financial services in general and credit unions in particular. Program participation requires a fee from Partners, and they have a choice of levels (Bronze, Silver, Gold and Platinum) with fees and activities scaled proportionately. All profits from NAFCU Services go to the parent association to support their programs.
When I became President of NAFCU Services in July, 2006, it was being run as a typical trade association affinity program, which is to say it was (essentially) a mechanism for giving select vendors an opportunity to support NAFCU programs . In exchange Partners received the right to use a logo, great space at the annual trade show, some networking opportunities with Board Members, and that’s about it – best of luck with sales and marketing. Clearly not a balancing of value from the vendor perspective, and a major reason why many of these programs have high turnover rates and lagging revenues.
Priority One: Create a Solutions Mindset
Turning the program around required a shift in philosophy and strategy to a solutions mindset, making it more effective for all parties involved. The goal: positioning our Partners as thought leaders in their respective areas and leveraging marketing activities to open dialogue and create relationships with prospects.
So the first and foremost responsibility is for NAFCU Services to understand the challenges faced by credit unions every day for growth and productivity. Where is the next round of profitable revenue coming from, how to cross-sell and up-sell Members, how to attract new Members, and so on. And how to run operations more efficiently, more effectively, more securely, at lower cost, etc.
The Marketing MRI
We call the process of understanding and pinpointing credit unions’ challenges—from their point of view—the Marketing MRI.This involves in depth interviews with credit union executives, fine tuned with surveys and of course ongoing discussions with our board.Most importantly we synthesize what we’re hearing and learning based on our experience in the marketplace.
Once we understand credit unions’ challenges in a particular area—say member retention, we look for a solution from within our current roster of Preferred Partners. If not, then we look to recruit a top quality, market leader to join the program, following a competitive RFP process that includes an evaluation by an Advisory Committee of credit union executives.
At that point, we have credit unions A, B, C perhaps even through credit union Z that need a solution, and Preferred Partner B that has one. Here’s where that Marketing MRI comes in again.Sharing what we know about the needs of the credit unions with the Preferred Partners, we help distill the partner’s value proposition to a laser beam, and then – call it multi-modal or multi-channel marketing – using all the tools at our disposal to communicate the value proposition and establish thought leadership for the Partner.
Many trade associations have the first part of this equation, a Preferred Partner-type program with the association’s stamp of approval. What differentiates NAFCU Services is the second part, where we (in essence) become a marketing consulting services firm for our Partners, generating webcasts, podcasts, articles, speaking opportunities, direct marketing initiatives, recommendation letters, credits for advertising and sponsorship, and much more. So from a Partner perspective, the value equation (investment in the program versus value received) is much more attractive.
Since I joined NAFCU Services in July, 2006, we have grown revenue by 14%, 15%, and this year an expected 33%. We’ve significantly upsized deal size, and more important, have made our existing relationships far more effective. Key to the success has been instilling that solutions mindset throughout our partners’ marketing and sales teams by developing and leveraging the Marketing MRI approach.
Many trade associations have Preferred Partner-type programs in which the partner receives the association’s stamp of approval and pays for the right to display the logo.
What differentiates NAFCU Services is the second part, where we (in essence) become a marketing consulting services firm for our Partners, generating webcasts, podcasts, articles, speaking opportunities, direct marketing initiatives, recommendation letters, credits for advertising and sponsorship, and much more. So from a Partner perspective, the value equation (investment in the program versus value received) is much more attractive.
Given that there are so many moving parts in our business model – our aggressive marketing mindset means that Partners are involved in numerous initiatives throughout the year – planning is essential to maximize results.
So we brought London Ink in to create individual strategic marketing plans in partnership with our higher level Partners, i.e., looking at each partner’s value proposition and target audience, honing it to a very fine point, then mapping those against the available marketing tools and channels, from PR to print ads to webcasts and podcasts.This plan becomes the roadmap for how partners can maximize the value of their investment in NAFCU Services.
One of the lessons of this process has been that the development of a strategic marketing plan helps every partner be more effective, whether they are one of the largest players in financial services markets, or an up-and-coming technology innovator.This is a testament to the value brought to the table by London, Ink.In fact, we have added the “London Plans” as an explicit benefit of coming in at a higher level in our Program.
Bob London has delivered marketing plans for more than 15 NAFCU Services partners—each with a finely tuned format (which we now use internally as our standard marketing planning template!) and insights we might not have had without his independent, objective point of view.Bob has helped NAFCU Services deliver real value in terms of our partners’ results and their satisfaction with the NAFCU Services Preferred Partner Program.Bob’s presentations at our annual partner conferences on topics such as leveraging Web 2.0 and his Inside-Out Branding have also been practical and thought-provoking.
An Inside-Out Branding Guest Post by David Frankil, President of NAFCU Services Corp. (bio)
Everyone has heard the cliché — “We know that half of our marketing budget is wasted, we just don’t know which half.” And the corollary, that marketing is just the law of large numbers – “We’re going to get a 1/2% response rate no matter what we do, so let’s just do more.”
In the venture capital world, the short-hand term for business models built on such brute force market response assumptions is “China Bicycle (CB).” It refers to a presumably mythical entrepreneur seeking funds for a bicycle factory in China, with optimistic revenue projections based on a sketchy analysis — that “All we need to do is get just 0.01% of a billion people to buy our bicycles.”
‘CB’ is the proverbial kiss of death if a reviewer writes it on the title page of a business plan, because it says the entrepreneur is inward-focused on the business or technology, and has not thought carefully about which segments of his or her target market are most likely to respond to marketing initiatives. CB assumes that all one billion consumers are identical in terms of their desire and willingness to purchase a bicycle, whether they be young or old, rich or poor, healthy or infirm. And that there are no differences in style, construction, or performance which might be more attractive to some than to others.
An example from my inbox today: Washington-Reagan airport is most convenient for flights from my office. An unnamed airline–on which most of my flying occurs and which has easy access to data showing my preferences – sends me a weekly e-mail with “My E-Saver Fares.” However the flights are usually originating in cities other than mine and terminating at destinations to which I’ve never been.
How much more effective would it be for this company to tailor the e-mail with an offer that might actually get considered? Flights out of my location and preferred airport to the destinations I’ve been to in the last 36 months.
So now the e-mail just gets deleted, because past experience has shown that there will be nothing relevant to me in that communication. More fundamentally, they’re telling me that they care more about themselves (inward-focused — the fact they have plenty of extra seats on flights between Toledo, Ohio and Buffalo, NY) as opposed to my needs.
Marketers are better served by understanding their value drivers, segmenting the needs of target markets, and then looking for the intersections of values you provide with needs they have. A process that sounds simple but is all too often overlooked.
If you get the process right, you’ll never see CB written in the margins of your marketing plan!