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Opinion

It's time for credit unions to embrace marketing automation

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Marketing automation has added a great deal of power to the marketing department of the modern financial institution. There is plenty of industry evidence that marketing automation works. When new sales and marketing techniques prove to be effective, they attract a great many firms that simply want to cash in on the trend but have little knowledge or understanding of the reasons why the technique was successful in the first place.

Rather than race to check the marketing automation box, professional credit union marketers must truly embrace the change — what it takes and where it could take their business.

Intuvo recently published a detailed white paper on the topic that sheds light on the advantages and benefits of implementing a strong marketing automation strategy. This article offers an introduction to a topic that is of increasing interest and importance to professional marketers working in credit unions across the country.

There is no doubt that marketers have flocked to these new technologies. In a recent Regalix survey on the current state of marketing, senior marketing executives were asked about the key benefits they received from marketing automation. Their responses:

  • Increased lead generation: 84 percent
  • Better prospect/lead insight: 73 percent
  • Increase in efficiency: 73 percent
  • Enhanced lead scoring and nurturing: 71 percent
  • Improved lead quality: 69 percent

These are attractive benefits that any professional marketer would be pleased to receive from a technique or tactic. How do these marketers know they are receiving these benefits? In the same survey, they revealed the following measurement metrics:

  • Response metrics (i.e., open rate, click-through rate, etc.): 42 percent
  • Value metrics (i.e., revenue generated, pipeline value): 33 percent
  • Efficiency metrics (i.e., cost per lead, close rate, conversion rate): 20 percent
  • Activity metrics (number of emails sent, etc.): 2 percent

Naturally, when companies begin to achieve this type of measurable success from a technology, many firms will rush into the space to compete for that business. Unfortunately, like any other technology, it must be employed properly in order to achieve results. This requires knowledge and experience, both with the tech and the industry it’s applied to.

As we’ve seen in other parts of the financial services industry, technology has typically been deployed to automate processes that were previously performed by staff in a manner that was far more costly and time consuming. In too many cases, the technology was designed to replicate outdated and inefficient human processes.

The same thing is now happening with marketing automation. Research performed by Maryville University shows that nearly half of all tasks performed by paid professionals can be automated. Indeed, marketing automation is the practice of utilizing software to automate repetitive tasks, and so many firms that are unaware of the complex processes that must occur within the financial institution use it this way. This is a mistake.

They’re doing this because in most industries it works. According to the researchers, among companies that outgrew their competitors, 63 percent were using marketing automation to enhance their marketing strategies. Furthermore, the university found that marketing automation increased sales productivity by 14.5 percent. These are compelling reasons to adopt.

But can the credit union do as well with these tools? Actually, if they use them correctly, the credit union can do better.

Embracing the next step in modern marketing

Taking more traditional trigger marketing efforts to a new level, activity-based marketing makes every marketing message more effective because it is delivered to the prospect at a time that makes sense to that prospect. This mitigates the risk of sending the wrong marketing message to a prospect or overloading them with marketing messages when they are not in a position to buy.

Many firms operating in other industries are not built around core technology platforms, and if they are, they are Enterprise Resource Planning tools that deal more with the business itself, rather than with the customer. Financial services is different. We have customer data in our core banking and lending systems that can be integrated into an advanced marketing automation platform. This intelligence allows the marketing team to leverage information about the member to match them up with meaningful marketing messages automatically.

For instance, when a member closes a new mortgage loan and is again in a position to avail themselves of additional credit, the system can be programmed to automatically add this member to a list to receive messages about new consumer and auto loans. Likewise, should a member take out a new auto loan, the system will know not to send them additional marketing information about those loan products.

Regardless of what messages the member receives from the institution, they will all provide a similar experience, exposing the institution’s branding to the borrower in a consistent and memorable manner. Equally important, if the institution knows that a member is not in a position to take out additional credit, those marketing messages are not sent. Making offers to a member that they cannot take advantage of can damage the relationship.

When the credit union’s systems indicate that a member may be in a position to purchase another product, marketing automation can prompt marketing messages across a range of channels. In our own internal studies we have found that this type of multi-channel marketing can be very effective, often increasing the prospect response rate by as much as 35 percent. An increase in sales is the direct result.

Because activity-based marketing ties the credit union’s marketing messages closely to the potential needs of the member, over time it reinforces with the member that the institution knows them and can help. By making offers that align closely with their member’s own desires, the institution demonstrates that it cares about its members and understands their needs. This is a very powerful brand builder.

The allure of a quick fix can turn many heads, especially in this high-tech world, but successful marketing automation requires commitment and experience, both with the technology and the industry to which it’s applied. What good is automation of a business process if the process is flawed or outdated? Such a mistake can be even more costly in the financial services industry.

Likewise, using a marketing automation platform that was not designed for, or intended to be used by credit unions, will require the institution to invest heavily in configuring the platform for its use. Better options exist currently that will provide the power today’s credit union executives need to meet their objectives.

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