By Jim Romeo

For federal credit unions, the landscape is getting competitive. Financial service firms offer so many different options for consumers, and credit unions need to market smarter to adapt to this environment.

Effective marketing often means finding an effective consultant or vendor to help this effort. For federal credit unions, this warrants some careful consideration in finding and choosing an advertising agency or public relations firm.

“Since banks are owned by shareholders and credit unions are owned by members, the credit union has always been less than forceful in engaging in advertising and public relations,” declares David Fuller, vice president and director of client services for The Brownstein Group, a Philadelphia, Pa.-based advertising agency. “Credit unions have traditionally walked a fine line between being aggressive marketers and seeming overly frivolous.”

Fuller believes that aggressive investing in the marketing mix by banks just makes it tougher for credit union members. “The extreme spending by banks ($90 million on stadium naming rights, for example) only makes the credit union [member] or prospective [member] more skeptical of marketing,” says Fuller. “Therefore, our overarching goal is to rally around the fact that credit unions make money for you, while banks profit from you,” he says.

As a result, it’s important to hone marketing messages from credit unions with this in mind and downplay any perception that they are in an aggressive pursuit of members’ business. “We focus our messages on educating the public about the facts first, then the reasons why a particular credit union would be best suited for them.”

“The most common method for credit unions to engage us is project-by-project, but we have also established retainer or service-fee agreement types of relationships,” says Greg Hoffman, president of  Redbeard Communications Inc., a Hollister, Calif.- based  marketing communication and multimedia design firm specializing in branding, marketing, design and multimedia technology solutions.

“It really depends on the credit unions’ needs and the clarity of their vision.”

The right fit
So just what should credit unions look for in an advertising agency?
According to Hoffman, credit unions should first determine what their needs are. “There are many different kinds of marketing agencies,” he explains. “There are creative boutiques, [that] often offer a very compelling creative product, but might be lacking in general marketing savvy. Conversely, there are, of course, the large regional and national type agencies [that] offer comprehensive services but are often too large, too expensive and not generally willing to conform to the tight ‘retail type’ turnarounds that most credit unions require.”

Donna Michalka, assistant vice president of marketing for Riverside County CU in Riverside, Calif., stresses the importance of ordinary due-diligence and scrutiny. “Do your homework and really interview the agencies,” stresses Michalka. “Find out how they plan to charge you for their services. Ask about hidden fees, such as whether they charge separately for multiple uses of a graphic image. See if they will assist with managing your advertising dollars. Carefully review their work for other clients to see if you like the way their ads look. Is their style a good fit for you? Do you find them creative? Do you like their manner? [Do you like] their way of interacting with you and your staff? Again, look at the entire fee structure. Think of as many opportunities for a vendor to charge you and find out if they do.”

Fitting an agency to your needs is key. The external third party that an agency represents may have the advantage of buying leverage or specific marketing expertise.

“Traditional advertising agencies may offer exceptional media buying services, which may be very important to a community credit union,” says Hoffman. “But media buying expertise will be of less importance to the credit union that uses targeted direct mail marketing to reach its members.”

Hoffman feels that credit unions will benefit most from a well-rounded, multidisciplined type of agency—one that can be flexible and can exhibit success in a variety of media.

Part of that flexibility is an understanding of promotional efforts that credit unions are engaged in. According to Hoffman, fulfillment can become a very big part of the equation if you have 20 branches in eight states that need point-of-sale materials and “take ones.” Typically, this material needs to be churned every 60 days to coincide with planned promotions.

Outsourcing or in-sourcing?
Hoffman believes that in-house resources are best used for managing the marketing function and not necessarily implementing it.

“There is a lot of preliminary work that the credit union should be doing to identify trends, identify needs and track effectiveness of the marketing efforts,” he explains. “Let the ad agency create your messaging strategy based on in-house work you do. The exception to this would be regular communication vehicles like statement stuffers and newsletters—maybe you could enlist the help of an agency to help build the standards for these pieces or even templates to make sure that they are in line with your branding strategy and then use in-house resources to build them on an ongoing basis.”

Larger projects like naming, branding, merchandising, promotional campaigns and awareness campaigns are best left to the pros. They have much more sophisticated expertise when it comes to messaging, design and production.

Ricki McManuis, senior vice president of marketing and business development for Riverside County CU believes outsourcing the marketing effort is usually fruitful if you focus on the strengths that an outside firm has to offer.

“If a credit union has the in-house capability, I think they could be missing out on the outside perspective an agency brings to the table,” says McManuis. “I would encourage them to interview ad agencies or PR firms to explore that option. If they do, they need to be clear about their expectations of that agency or PR firm. If the credit union has great graphics people, then maybe they would use the agency to brainstorm promotion ideas.”

“I would say that unless you have a staff who specializes in a variety of media communication, you might want to outsource some projects, such as press relations and creative design for important jobs like an annual report, billboard design, radio and cable ad production and print advertising,” adds Michalka. The consistent look and feel of a brand demands careful coordination in order to project a professional, polished brand image across all mediums.”

Some might suggest that a credit union consider hiring a firm on an “as-needed” basis. From our perspective, the landscape is changing,” says Mark DeBellis, president of the Financial Services Division of PSB, a Lake Forest, Calif.-based marketing communications firm with  more than 1,000 financial institution clients across the U.S. “There is a definitive move towards the as-needed or a project-based model. I think the marketer first has to have a clear understanding of their credit union, its unique marketing issues, and the competitive landscape that confronts their organization. Then they must be able to develop a concise strategic plan. Once these elements are in place, then I believe that they can realize substantial savings by going with the as-needed model.”

While the landscape is changing, it’s important for the credit union to assess its strengths and put its best foot forward. “I would suggest that they evaluate their strengths and weaknesses at their individual organization first,” says DeBellis. “Take an objective look, not only at their unique marketing position, but also at their internal marketing resources. What do they already have and what are they lacking?”

Jim Romeo is a free-lance writer based in Chesapeake, Virginia.