After sleeping off turkey, stuffing and football on Thursday, millions of Americans will wake before dawn on Friday to hit the stores in search of one-day-only deals. But odds are that fewer consumers than in the past will be hitting up their local credit union for special offers.
Though concrete evidence is hard to come by, marketing experts who spoke with Credit Union Journal said that – anecdotally speaking – the number of CUs offering Black Friday loan promotions appears to be on the decline from what it has been in recent years, though plenty of CUs still look for ways to market around the holiday.
Miami-based Tropical Financial CU has run a Black Friday loan promotion for several years, offering members a $1,000 loan with a 10 percent interest rate and no credit check. According to VP of Marketing Amy McGraw, the offer gets more popular every year, and the credit union is likely to issue more than 1,000 such loans this year.
“Every year we start it earlier and earlier to make sure we can get them all processed so we can get them all in the members’ accounts by Black Friday,” said McGraw, who also serves on the executive committee of the CUNA Marketing Council.
Even if Black Friday offers – whether for signature loans, auto loans or certificate products – at CUs are on the decline, McGraw said that Tropical Financial’s members still love the loan.
“You would think somebody who has great credit and can get a personal loan for much more and at a much lower interest would not be into something like this, but it really runs the gamut of people who take this loan,” she said. “It gives people a [holiday shopping] budget so hopefully they don’t go over; it also gives them a set thing to pay off, knowing at the end of the year that they have Christmas paid off from last year. And in terms of a loan like that, I don’t think demand has gone down. We’ve given out more and more every single year … I’m not sure demand for that type of loan has gone away.”
Been there, done that
One analyst, however, offered a different take.
“You don’t see it as much” as in recent years, said credit union marketing consultant Paul Lucas, adding that none of the CUs he works with put out Black Friday loan promotions for 2017. “It probably got a little old,” he added, noting that with an improved economy and low unemployment, it’s easier to market loans year-round.
One other factor? Most credit union marketers simply don’t plan far enough in advance, said Lucas.
“Most credit unions don’t have dedicated marketing people, and a lot of them aren’t planning that far ahead – and you should,” he said. “If you were going to have a Black Friday sale, that should’ve been planned in early September. You would’ve wanted all that marketing done in September or October so you could roll it out in November. A lot of people just do stuff at the last minute.”
And the consequence of that, he added, is that a number of credit unions are missing out on an opportunity for a relatively easy loan promotion.
“You always have to take your niche marketing opportunities because they can take you over the top,” he explained.
Bo McDonald, president of South Carolina-based credit union marketers Your Marketing Co., said he believes there is still an appetite for well-designed lending campaigns, but said only one of the 30 CUs his firm works with is running a Black Friday special this year. Many are still offering loan promotions, he noted, but they aren’t specifically tied to the day after Thanksgiving.
“With Amazon, with online shopping, the whole spectacular experience of Black Friday isn’t quite what it used to be, so I don’t think there’s that big rush to the stores on Friday,” he observed. “Certainly there are some deals there, people are still going, but there are so many more convenient options now that I don’t think it quite has the luster it once did.”
Not your everyday deal
Black Friday specials may be slowing down, but they’re still a hot item at Racine, Wis.-based Educators CU, which has offered an auto loan promotion tied to that day for nearly a decade. Members who refinance or take out a new loan can get 1 percent cash back (up to $250) if the loan closes within a week of Black Friday. The credit union also offers a Cyber Monday special with incentives on credit cards and balance transfers, and the two deals together give members the chance to receive as much as $450 cash back.
ECU doesn’t set goals with these particular deals, but they have been going on long enough that members expect them and the CU does a robust business around them. According to SVP of Marketing Shannon Hout, last year Educators booked $8.3 million in auto loans during the two weeks the Black Friday special was offered, and an additional $1.1 million for the Cyber Monday credit card special.
The auto loans and credit cards are both marketed with the credit union’s normal interest rates, while the additional cash back incentives are used to lure members to take advantage of the offers.
“The intention is to make it feel like a sense of urgency, and that the member needs to take care of it as soon as possible or they miss out on that opportunity,” explained Huot.
While many financial institutions offer sales tied to nearly any red letter day they can come up with – everything from Groundhog Day to this summer’s total solar eclipse and beyond – that’s not the case with Educators.
“Black Friday is a unique campaign for us,” said Huot. “This is not something we do for every holiday, and it’s intentional because we want this to be exactly what it is – a unique opportunity to take advantage to save money. Everyone’s in that spirit – looking for a good deal, taking time away from their day-to-day – and people are paying attention. If we were to have something for every holiday, it would take away from the uniqueness of this campaign.”
And that kind of thinking, said Lucas, is key to effectively capturing business. Consumers get overloaded by “specials” that come out all the time, and what was supposed to be a special offer actually becomes less effective.
“You can’t do every holiday special because your membership starts to turn off on the messaging,” he said. “You’ve got to be careful how many specials you have.”