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Your Marketing Budget is a Wise Investment

It’s budget season. Time to translate your strategic plan into action items and calculate the dollars it will take to execute your plans and goals. Too often we think of the budget as purely a list of our estimated expenses over the coming year. While we may think in terms of the financial investment we will make when we think about new branches, products or core systems, we rarely think of the marketing budget as an investment. This is a mistake.

The marketing budget is an investment in the growth of the credit union. It funds the promotions and materials needed to execute the goals we set in the strategic plan for growing membership, loans, or launching new services.

It’s important to calculate the return on your marketing investment, just as you would for a new product or branch. If your loan and marketing departments aren’t working together to track and calculate the ROI on all loan promotions, how can you truly measure the success of the offering?

Good marketing doesn’t require a huge dollar investment.

Most financial institutions use a budgeting guide of approximately 2%–5% of assets as a reasonable marketing investment. However, each institution must reference its own financial condition and budget accordingly. Scaling your marketing promotions to work within your budget does not mean sacrificing strong ROI.

There are many delivery channels available to get your message into the hands of your members. Utilize them strategically. Your members represent a variety of demographics and have a variety of preferences as to how they want to hear from you. Make sure you cover your bases with a good marketing mix.

Many of us have turned to email because it’s economical. Its proliferation may be the reason it’s becoming less effective. Direct mail, on the other hand, remains one of the most cost-effective methods to connect with your members. It has a better open rate, generally speaking, in part because it has a higher value associated with it. It resonates more than email and will be kept longer. Consider testing your sales messages with both.

As we finish our budget prep for the New Year, let’s build our marketing strategies around making smart investments in the promotions that will help us execute our strategic plans and meet our growth goals.