Hello, and welcome to the theory of marketing relativity podcast. I'm Jess Burton, a marketing specialist here at epic marketing consultants Corporation. Let's talk all things marketing and merchandising with our Epic team, we have invited Heidi Wesley Cleveland back from Verity Credit Union to be on this week's podcast. She is the Chief Marketing Officer for Verity out in Seattle, Washington. So thank you for joining me again, Heidi,
Heidi Cleveland:Thanks for asking, Jess I always enjoy talking with you guys. This is a lot of fun.
Jess:I know it is fun. And today, our topic I always think of it as like, this is our topic, because we're going to cover is credit union marketing, which I think is right up both of our alleys. And I specifically picked you guys because we're going to talk about marketing and membership. And how they go hand in hand about how, you know, membership is really important to credit unions. I don't think people really realize I say all the time that I always thought credit unions were only for people who belong to unions, and have worked now with credit unions, I've learned that that's not necessarily the truth.
Heidi Cleveland:Yeah, you know, there were some really great research put out last year by CUNA as part of their national Open Your Eyes to a Credit Union campaign that showed that that was still the number one myth about credit unions is that people think that you have to have a special affiliation in order to join. And really since I'm going to say back around 2000, is when the legislation was passed, that allowed credit unions to open up their field of membership on a community wide basis. And so most credit unions now have a community charter where anyone who lives or works within whatever the geographic parameters of their charter are, are able to, to join the credit union. So but it's still something that we battle every single day, we've been running a campaign for the entire year. And all the campaign says is you can join with an outline of the state of Washington, just to try and and overcome that, that misperception that people can't join.
Jess:Yeah I think that's like one of those things that I thoroughly appreciated. I remember when Leah sent over all of the imagery, I was like, Oh, my gosh, this is like the perfect, I was like, it's it encompasses your membership, you just have to live in the state to be a member and Washington such a big state. Um, I always think it's funny when like, we have tons of credit unions here that we work with that they either, you know, have a very niche audience that they have to pull from, but it's still a very large audience, or, you know, they're the ones that are very broad, you have to live, worship or work in this designated area. And I think that's the other part that is so crazy is that like, you could live in another state. But if you're working in, you know, Delaware, you could be a member of this credit union, because you work in Delaware or you work whereever
Heidi Cleveland:It doesn't happen very often, you know, I think this year, we had someone join, who lived out of state but said that they worship in the state of Washington, well, how do you verify that you kind of take their word for it, but that's really the first time that I've seen that that part of our charter parameter was was utilized for someone who really wanted to join us. But you know, one of the things that I find really interesting about membership and, and marketing for credit unions, because I've been with both community banks and credit unions in my career. Nobody else member measures this when you when you're out a community bank, or any of the banks, they don't measure how many customers they have. They measure deposits, and they measure loans, they measure all those other things, but they don't measure the number of people that do business with them. And I always struggled with that. But at Verity, we really feel like that is really an indication of the impact that we're having on the community. The more people we can serve within our community, the more of an impact we're having. So it is one of our primary measurements and one of our primary goals for the year.
Jess:That is, I think that you nailed it. Like I think that membership for credit unions is super important. Um, especially because you guys reinvest a lot of that money back into other community members, other community organizations. Um, so how do you guys determine as we are headed right into 2021? How do you guys determine what your membership goals are for the year?
Heidi Cleveland:That's a good question. Well, our board of directors a few years back, set some some big long term stretch goals for us to be 50,000 members and a billion dollars in assets by 2025. So that's been driving us for the last few years. And we have long term plans that have spread that out over the years. So we know how much growth we have to get each year, in order to get to our 2025 goal, this year kind of threw a wrench in that a little bit. But we still have the ability to make that up. And then we go back and we start looking at the data. Always starting with the data, what is our historic membership growth been this year, we've decided to do a really deep dive analysis into our closed accounts. And what we're finding is that we're losing, particularly newer members, or losing them out the back door is at his faster rate as what we're bringing people in the front door. And so um, you know, we've we've done fairly well with gross membership growth, but we've not done a good job with closed accounts. So we're in the process of implementing a very robust onboarding program next year, and really utilizing a few other data driven tools to really try to get our arms around closed memberships. And that happens primarily, by putting additional services into each household you have, the more services that you have in household, the less likely it is that you're going to lose that member when the only loan they have pays off, or the only CD they have matures. So really trying to work on building the depth and breadth of relationships in order to preserve those memberships.
Jess:That it I think that's definitely something that I hadn't even like, it makes so much sense now that you've said that, because say someone only has an auto loan with you guys. And once on paying off that car. There's no connection, right? Even though you guys do have great, you know, checking options, and youth accounts and all these other different things that could keep you around. It is crazy to think that like once a loan is paid off, there's nothing tying that person if they don't have any other accounts open to you guys. And that's considered a lost membership.
Heidi Cleveland:Right. Yeah. And, and we're really seeing, it's very, very clear in the data that you can tell pretty quickly, even as quickly as like 30 days into a membership, the difference between an engaged member and a member who's not engaged. And it's that first 30 60 90 days, when the opportunity to cross sell additional products to to uncover those additional needs, and provide the solutions, that's when you're going to build the relationship that's going to lead to a long term member versus someone who's doing a one time transaction with you.
Jess:Absolutely. So you guys have a very, I always use the word all encompassing marketing approach to things. So how did within those 30 60 90 days, um, introduce new members or someone who's opened a loan or open an account or opened a different product? How do you approach them with the other options of being a member?
Heidi Cleveland:Well we're just in the process of building that program, right now, we've opted to install the Marketo marketing automation system. And working with our ad agency Catalysis. here in Seattle, they are helping us to dig through the data and identify sort of five primary pathways that a new member might take as they're coming in to the credit union, and then develop the sequencing of communication down each of those pathways just to get us started. So for example, someone who comes in, and their first exposure to the credit union is through the car dealership where they got their car. mm versus someone who comes into a branch and sits down with a member consultant and opens their checking account, those two folks are going to have a very different communication path. Because their their experience with us thus far has been very different. And and so the products that we would recommend to them, and the sequencing of that is going to be different based on how they came in. So that's how we're start sort of starting with these five different segments, and then identifying the member journey based on the data and what most likely product is to recommend at the right time. It's all about getting the right message in front of the right people at the right time. And we're really hoping that by automating a lot of the communication systems, we'll be able to do that in a way that's that's much more relevant to the member, then everybody gets the same welcome kit.
Jess:Yeah, so I think that's something that, um, people definitely don't from, I guess from the outside looking in, don't understand about crafting that, you know, that journey of, you know, we have an I always use email marketing as like a good example of this, because it's, I feel like it's easier to explain to people but like, everybody gets like the Welcome to the Credit Union, or whatever, welcome email. But then, depending on what they click in that email, then determines what follow up email you're going to get. And successful campaigns will nurture you all along those paths until, well, yes, you were here for an auto loan but now you're signing up to get a checking account, and you're interested in our credit card products, because we've got you and now you're we're nurturing you along the path that you are naturally going to go along anyway.
Heidi Cleveland:Right, Yeah. It's it's the segmentation and the analysis of the data on the front end is so critical. And and the other thing I would add is really, I'm looking at them the mix of how you're communicating with members, based on demographic factors or, or even in your, in your new member application, asking the question, how do you prefer that we communicate with you. And that could be through text, it could be through email, it could be through snail mail, or it could be over the phone. And I think sometimes that onboarding experience needs to be a little bit of a mix. If it's all email, it's really, it's, you know, pretty easy to ignore, and have it all go into the spam folder, I think it's really important that there's a personal outreach from the member consultants, whether that's a phone call, or a handwritten note. So it really, it takes a mix of all different types of medium. And it takes involving your sales team and your marketing team and your data team and all of these people together to really build a program that's going to engage members, right off the bat.
Jess:100% you have to meet people where they're at. I know, I my like, my preferred method, I don't care whether you email me or text me or call me, don't call me. Everything goes to voicemail if I don't have your number because I so many spam calls that I have my phone set up that if you're not in my phone, you automatically get sent to my voicemail. Course. Yeah, but yeah, and I but then I think about like my parents who prefer to get things in the snail mail, because they like to have a physical copy of it, even though they know they could log in online and check their online banking to print it out. They like having the old paper version and my mummum, like she prefers to go to a branch. So she prefers to talk to a person, you know. So it is it's very meet people where they're at with what they need.
Heidi Cleveland:Also comes back to your initial targeting to begin with, for who you're trying to bring into your credit union. So you know, is it? Are we just counting tick marks where we just want warm bodies to hit a number? Or do we really have a clear understanding of who our target market is, who our target demographic is built out those personas, we know who those people are, that are going to support the long term goals and objectives of the organization. And once you do that, and the bulk of your new membership is coming in within that target demographic, then it makes it a little bit easier to to communicate across a general group of people. But I think that's really important on the front end to to really understand. Yeah, we have these statewide community charters that anybody can come in, and we welcome anyone within that geographic proximity to come in and join the credit union. But we're not targeting every single one of those people. Who is it the people that we're really targeting the most, and that we're really focusing on the front end I've been talking with, with our executive team for a few years now about the idea of instead of just setting an overall membership growth goal, which I think just about every credit union has a membership growth goal. Let's set goals within specific target demographics. For example, we know that we have a very large percentage of our members that are what I'll call traditionalists, okay. Are our older members, they are more deposit driven. They're focused on CDs and on savings, and they are rarely going to take a loan with us. And those are great, solid, valuable members. But they're not going to help us grow our assets and build our loan portfolio in the coming years. In order to do that, we've got to start bringing in more millennials and more younger people, more credit driven people. So really knowing who you're targeting and why, instead of just bringing in the masses are we bringing in the kind of, of demographic that will support the growth that we need. And, and there may be several segments there, for example, in Seattle, we may have a segment that we're targeting that I'll call just for lack of a better term, well, I'll call them hipster amazonians. Right? These are 30 year olds who work for Amazon downtown, and there are there are literally 1000s of them. And they make really good money at Amazon. And they're very upwardly mobile, and they're focused on their careers. And that is a great segment for us. But we're also building a new branch in an underserved community. That is, my, the majority of the community is people of color and recent immigrants. And that's a completely different demographic. It's a different targeting message. And it's a different onboarding path with them. So it's not just one segment, we want these people and nobody else. But really just tailoring everything, tailoring your message. It's becoming more and more important every single day. And people expect that it's the Amazon experience, right? We expect them to already know everything about us and to know exactly what we want and to serve it up to us and and the rest of the world is is scrambling to try to keep up with the technology that drives that Amazon engine that we all love so much.
Jess:That is you hit the nail right on the head. I think that that instantaneous now now now thing, especially with, um, you know, with the younger generations is very like me included. This sounds so terrible, but like today, like I ordered something from Amazon, it arrived in two days. And I, you know, was one of those things that I was like, okay, we're gonna something else from a smaller business, and it took it like five or six days. And I was like, Oh, my God, why isn't it here yet? And I was like, because not everything is Amazon, not everything, as soon as you blink. But yeah, I definitely think that you guys have a very, I just think of all the other credit union clients that we have, and everybody is so different in what their membership target and their membership base is. But I think the one overarching theme that I think falls for everybody is everybody is kind of really focused on right now, growing that millennial age demographic. Because to circle all the way back to the beginning, most people think that credit unions are just for people that belong to unions.I know, the credit union that I belong to I belong to it, because I am the daughter of someone who works for union. Um, but
Heidi Cleveland:Exactly, I grew up as a member of a credit union for the steel industry in just outside of Chicago, and all the steel mills had their own credit union. And that's how you were affiliated. And and you're right, the focus is on millennials. And it's funny, because throughout my 25 plus year credit, career, I've been hearing the same message that credit unions need to focus on the younger demographic, the the credit driven demographic and, and whether at the time, those were Gen Xers or their millennials, or whatever you want to call them. It's always been an issue for credit unions for as long as I've been in the industry, that the older generation knows us and loves us. But the younger generation really doesn't know and understand who we are. And I think that becomes more and more relevant every day as the fintechs continue to move into this space. And you know, Millennials don't even have a bank, they have a PayPal account and a Venmo account and whatever else, but they're not using traditional banks in the same way. And if we don't get that message across, we don't start to bring those younger demographics in. In a few years, you're going to see loan volumes really start to tank because we're not going to be able to support credit unions simply with CDs and and checking accounts.
Jess:Absolutely. I think I always joke that like, one day, I'm going to become like a credit union influencer. Um, because I do feel like I, there are times where I'm like, I have the social media know how, and I know all this stuff about credit unions. And like, it is funny to me because like I have a credit union account, I have a traditional bank account, um, savings and checkings, and the whole nine yards. And when I compare them, like, my sister bought a car, she has the same accounts that I do with a different bank and the same credit union. And she was like, I cannot believe that the rate for my auto loan through the credit union was so much smaller, like the APR was so much smaller than it was at a bank. She's like, and she's like, it's not like I'm doing like, it's not like I'm, you know, taking out a $2,000 loan, I'm taking out a $27,000 loan for a car. So she was like, it was just it blew my mind. She's like, that more people don't look into that kind of stuff. She's like, especially younger people who don't have a lot of money, that percentage rate she could like, it makes a huge difference over the span of 5 6 7 8 years.
Heidi Cleveland:Yeah, it really is huge. And, and there's so many advantages, especially for younger people, whether it's the financial education, or the products, the fees, the rates. And then I think also, I think this millennial generation has a deeper connection to community and to values and to wanting to make their purchases with companies whose values align with their own, I think that's much more relevant for the millennial generation than it has been for past generations. And I think that's a real advantage for credit unions. That's a space that we really need to lean into. And make sure that people in our communities understand who we are and what we're all about, not just about rates and fees, but about what we're doing with our members deposits and about what we're investing in in the community, and how we're supporting the community, and how that individuals membership at the community makes it possible for us to do the things that support underserved people, and that support the programs and the activities that are so important to our communities. That's a message that I don't think we get across nearly enough.
Jess:I would agree with you 100%. And I think you guys especially have a unique, a very unique opportunity as well for everybody who, you know, is interested in, quote, unquote, saving the environment and being like being economical with where their purchases are going and where their money's going. Because you guys are one of what 10 credit unions or banks that are members of the globe, I always mess up the Global Alliance on Bank of banking, on values, the
Heidi Cleveland:The Global Alliance for Banking on values, yeah, we're one of 10 in the United States, 10 financial institutions in the United States that are a part of that movement. And so we call it socially responsible banking. It's the concept that when you put your money into a bank, or a credit union, your savings, they don't just put the cash in the vault and leave it there until you come back to get it. They're using that money to fund loans and investments for other members and other customers. And so the question is, what are the kinds of things that they are investing your money in and lending your money for? And do those things align with your values, and we're finding that message really resonates strongly with the millennial audience. And it's, it's an important message that all credit unions start to get out there.
Jess:MM hmm. Absolutely. The reinvestment into the community that you're living in. I know, I am a huge HGTV fan. And a lot of the shows that are on now are about people who are going back to their hometowns and fixing up the areas that are slowly getting rundown and starting to be unappealing. And the people buying those houses are my age like we're millennials, they're in their late 20s, early 30s. They're willing to take a risk and living in a not so great area, because one day, this is what it might be. And I think the same thing with that investment into your community and your local surroundings is definitely something that sets apart, especially right now like this My generation like the millennial generation from a lot of other generations.
Heidi Cleveland:Yeah it's it's really a critical message and, um, you know, it's it's a story that I don't think credit unions tell often enough in it It's those individual stories that are so meaningful. For example, we had a commercial loan come to us, it was absolutely rock solid, a paper. And there was nothing, that no one would have turned down this loan, any bank would have been glad to have this loan. It was for new retail and commercial space. The only problem was they were tearing down an old, rundown apartment building to replace it with retail. And so those people that were in that affordable housing in the downtown Seattle area, which is very, very difficult to find, we're going to be displaced, as so many neighborhoods are gentrified and, and the lower income people are pushed out. And, and that was going to be the result of this project. And we turned down the loan and said, You know, this is not what we're about. And we took that same money and used it to fund loans to a woman owned entrepreneur, business, and a nonprofit. And those are the kinds of things that we want to invest our members money in. But you got to let people know that you got to tell their story. And you got to keep telling it and tell it over and over and over again. Because people need to see that and then and then it starts to spread naturally.
Jess:Yeah, so I think the whole oh my gosh, this like cliche phrase, but I'm sure it's on a wall somewhere in one of my friends houses, the quote, like be the good you wish to see. I think that like, already, you guys encompass that so well. Um, I always like I oh my gosh, this year, when you came up the community impact report, I read it. I messaged it to everybody here at Epic. And I was like if you guys need like some feel good stories, and maybe like a good cry, like, go ahead and read this. And one of our one of my co workers messaged me back and she was like, Oh, I needed that she's like, in the fact that a financial institution would go as far as to be like, I know you're coming in for this, is there anything else we can do, and they end up helping you know, someone completely redo their entire budget and save the money. And like, not just she's not, you're not just here to open an account, you're here to get help and knowledge that you didn't have before.
Heidi Cleveland:You know, I always tell our new employees when I do new employee orientation, we're talking about brand and explaining what brand is and, and I always give them a few examples. And we talk about what different brands mean, you know, and I give them Best Buy and Target and then I'll throw a Wells Fargo in there just for fun. But the last one I always give them is Harley Davidson. And the reason there's two reasons one is I tell them as a marketer, you have absolutely reached the pinnacle of your career when you can get your customers to tattoo your logo on their backside. Right? That is branding. Number one. But number two, what Harley Davidson has created is a customer base that is so intensely loyal, that they will literally get into fistfights over which bike is better. But they're out there preaching the gospel of Harley Davidson, right. It's evangelistic marketing, their customers are doing the marketing for them to such an extent that they probably don't even have to do much advertising. That's what it's about. It's about telling these stories over and over again, until your members are repeating those stories, the number one source that continues and I've seen this for decades now the number one source of new members is always going to be referrals from friends and family. When you treat your existing members well, when you share those stories of the importance that you bring to the community. And then they share those stories with friends and family. That's how you grow membership.
Jess:Mic Drop
Heidi Cleveland:Boom
Jess:I having I you know, it's funding coming into this role here at epic. I came from a small business where my boss at the time his motto was I don't want to do any paid advertising. Unless it was for like, you know, in the very small business, very high end small business without getting too specific. But he was very much like, I don't want to feel like I which for me as someone in marketing, I'm like, ah, but he was like, I really don't want to do any paid advertising. How can we work with that? So he would do like, you know, when the high school would come around and ask for an ad and their football pamphlet or wherever or whatever he would do that stuff because he's going to back into the community. But you know, the biggest honor that you can have is when people come in and they say, oh I was referred by so and so so and so had such good experience with you, they could not stop talking about it, we wanted to come in and get in on the secret.
Heidi Cleveland:Yeah, you know, we have had a lot of success in the last couple of years in member to member referral programs on in offering an incentive to both the referring member and to the new member, to get them to come in and to have the conversation. And to get started on that, we've had really great success with that, you have to be a little bit careful in finding the right balance, because, you know, we know that the big banks are out there offering $500 with, you know, two and a half years worth of hoops to jump through before you get it. But people don't see that all they see is the $500. And here's the credit union offering $100. So you don't want to put the two and a half years worth of hoops in there that make it so difficult for people to reach the incentive. But you have to put a little bit of a hook in it in it. So then you don't have people just gaming the system and, and really running that up. But we've had great retention rates with our members that are coming in through referrals. And it's really been very successful for us. And you don't have to spend a lot in advertising. It's about email and, and direct mail and just communicating with your existing members, to let them know that this incentive is possible. And then just making sure that you're taking care of people and then they're going to be willing to share that information and give a little spiff on top of it.
Jess:I think it's always good to reward people for you know, good, not gonna behavior, but good just being a good person. Um, so I've one final question for you on the whole marketing over as you've been the Chief Marketing Officer Verity, what has been your most successful campaign, whether it's email, or radio, or social media or whatever, what do you think has been your most successful campaign?
Heidi Cleveland:Um, I think, I think a couple of years ago, we opened a new branch in the West Seattle market. And everything just really came together. And this, this branch is on the main street of an old downtown area. It's a street that gets closed every Saturday for the farmers market to take place right in front. And so we built the branch in a way that the front glass of the branch folds open. And so the whole front facade is open to the community to the farmers market. And it's just very, very welcoming. And then we had a just a great set of products and offers and a great sales perspective on it. We opened in the summer, and I spent both Mother's Day and Father's Day, that year at the farmers market, handing out flowers to moms and letting them know that we were going to be opening soon, or handing out coupons to dads and letting them know we were going to open soon. So just really setting the stage and then having a staff that was super engaged and excited. And it turned out to be one of our best openings in just a really great branch. And I think part of it was because we engaged with that neighborhood and that community, probably a year ahead of time and became very, very hands on involved, join boards and committees and showed up for volunteer activities and really let people know that we wanted to be an active part of the community. And in return, they just kind of opened their arms and welcomed us into that neighborhood. And it's some it's been a great place for us.
Jess:I have goosebumps like that's so awesome. A warm hug. Great Christmas time story. Um, well, Heidi,thank you so much for joining me. I'msure I will have you back sometime soon.
Heidi Cleveland:Oh, it's my pleasure. Thank you, Jess. I always love and enjoy working with Epic and really appreciate all the amazing support that you provide for Verity.
Jess:Well, thank you. Thank you all for tuning in this week. We hope this theory is relative to your marketing needs. Make sure you subscribe to get notified of our latest episodes.