I’m an optimist—even in the midst of challenging times I do my best to stay positive. However, there is a looming negative cloud on the horizon we in financial services must address: the potential of a coming recession.
Talk to any economist or read any economic forecast and you’ll see just about every expert is predicting a potential recession the end of 2019 or sometime in 2020. It’s just a matter of how deep and wide it might be.
I recently had the opportunity to appear on CUBroadcast and one question host Mike Lawson asked was “From a marketing perspective, what do credit unions need to be doing to prepare for a potential recession?” I gave three action steps you can take (click this link to see the full interview).
Here’s an elaboration on those three steps plus two bonus tips for preparing your credit union for a recession.
1. Invest in your brand
The stronger your brand is, the less you’re going to have to market your individual products and services. Research indicates it costs at least $300 to $400 to acquire a new consumer. That’s money you wouldn’t have to spend if your brand was clear and consistent.
You don’t want to get caught in a recession where you’re having to push products just to meet your annual goals. That is a poor use of precious marketing resources. A strong brand avoids the “product push” trap.
Developing a strong brand now will carry you through a recession.
2. Focus on retention
One of the biggest expenses with any marketing budget is member or customer acquisition. In his book “Never Lose a Customer Again,” Joey Coleman reports that 32% of consumers who join a financial institution will leave that institution before their one-year anniversary. Your credit union or bank can’t afford that kind of loss now, much less during a recession.
One of the most proven ways to grow your financial institution is to get more products and services from your current base. Just think what would happen if you got every one of your existing households to get just one more product or service with you? Your profits would soar (even in a recession).
Making your existing base a top priority will strengthen you through a recession.
3. Conduct a marketing audit
With a recession, everything you do in marketing is critical. You can’t waste a dime of your resources. With an audit you will know if you are spending your marketing resources correctly.
A marketing audit also gives you strategic and tactical ideas to make your marketing even better. Strengthening your marketing now with a marketing audit prepares you for the recession.
As John F. Kennedy famously said, “The time to repair the leaking roof is when the sun is shining.”
4. Analyze your efficiencies
The more efficient your marketing is, the better you will weather the recession. Efficiencies relate to digital, staff resources (how you’re spending your time) and return on investment.
The State of Inbound report actually found that marketing teams who can regularly show ROI are more likely to be given higher marketing budgets to carry out the initiatives they need and want to take.
Calculating an ROI with every one of your promotions now ensures your marketing is performing at the highest level possible in an economic downturn.
5. Journey map your experience
Differentiating your financial institution on price during a recession is a losing proposition. However, if you create an amazing experience for consumers, they will talk about you. They become your advertising.
The best way to create that experience is to journey map it step by step. Creating a unique journey and experience will sustain you through a recession.
Taking those steps above now will help you actually not just weather a recession but come out stronger.
In other words, a recession could actually be a positive thing, if you approach it in the right way.