One of the most popular questions I am asked as a marketing consultant is “how much should we have in our marketing budget?” The “formulas” and rules of thumb for this are numerous. However, many credit unions can’t afford those recommendations, especially if they haven’t done a lot of marketing in the past.
Case in point: our very first client at TwoScore was a $25 million credit union that had never had a marketing person on staff or outsourced any of their marketing efforts. Ideally, their marketing budget should have been around $25,000 annually based on industry standards, but they couldn’t afford to start with that amount.
Therefore, we started 2015 with an annual budget of $8,400 and focused one just one credit union product: new and used auto loans. The credit union experienced such success that first year that we were able to add home mortgage loans to their 2016 plan and the annual marketing budget increased to $15,000.
- 2-year increase in auto loan portfolio of 122.74%
- 2-year increase in auto loan penetration of 5.99%
- 1-year increase in home mortgage portfolio of 12.98%
- 1-year increase in home mortgage penetration of 0.14%
- 2-year increase in total loan portfolio if 31.69%
Something else I hear is “we have a really small budget” when we first get a call from a potential credit union client. My answer to that: “it’s ok! We will start small.” You don’t have to be ashamed of a small budget.
Ideally, we would all love to have unlimited marketing budgets to do all of the amazing things out there to help set us apart in this extremely saturated banking market. Realistically, we are not-for-profit credit unions and our budgets are smaller than our bank competitors because of the way we intentionally do business. But that leaves us with a great story to tell. And that doesn’t take budget dollars so much as a communication plan and concerted effort to amplify your wonderful story.
As budget season comes to a close and 2018 is almost upon us, start with a positive attitude when it comes to your budget and what you are able to accomplish. Even if you have to start small, with just one product or service, it is enough for now.