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Today’s credit union marketing is dominated by a product-centric approach that tries to be all things to all people. A prominent example is the heavy promotion of higher CD rates in a rising interest rate environment. The problem with this approach is the difficulty in differentiating your credit union from the herd. Even if your message breaks through the noise, not everyone in the intended audience is ready or willing to open a CD today. Then, when they are ready to buy, you may not have an active campaign going, and they’ll see some other institution’s ad.
A solution to this problem is lifestyle marketing. This strategy is a distinct form of digital content marketing aimed at micro-segments of the membership base. It aims to establish deeper engagement and trust among these affinity-linked groups, so they naturally favor the credit union’s products and services.
Let’s look at each in more depth.
Product Marketing
Product marketing probably originated with bartering at the dawn of civilization and dominates marketing today. It concentrates on the features and benefits of the product or service to persuade the buyer. It has endured for so long due to the simple assumption that if buyers can be convinced that the product features and benefits match up with their needs and wants, the likelihood of a sale is vastly increased.
However, product marketing also depends on other important factors. One is trust. While buyers may be convinced the product sounds right for them, they may decline to buy because they harbor some suspicion that the product is not what the seller says it is or they simply don’t trust the seller. The chance that doubts or lack of trust will occur increases with the amount of money involved and in situations where the buyer does not have an existing, positive relationship with the seller.
Another factor is timing. While buyers may be willing, they cannot buy the product at that time for some reason, such as lack of funds or need it in the future but not today. For example, many credit unions leverage internal data to identify “the next best product” for a member. Suppose analysis of Member A’s data suggests the next best product is an auto loan. Yet, when that member ignores a targeted e-mail offering attractive auto loan rates, it might only mean the member plans to buy a new car but not for six months.
Because of a lack of trust and bad timing, credit unions investing time, effort, and dollars in product marketing often find the results less than expected. Even though this strategy casts a vast net, only a tiny percentage of buyers have the trust and timing elements simultaneously lined up when the product marketing appeal is made.
Product marketing poses a further problem for credit unions. Most competitors also use this strategy, making it almost impossible for an individual credit union to stand out. It’s easy to get lost in the clutter of all the other financial institutions promoting their products’ features and benefits. Again, using the certificate of deposit example, audiences get bombarded with appeals from different sellers, all offering the same 5% rate.
Lifestyle Marketing
As noted in the introduction, lifestyle marketing avoids the weaknesses of product marketing but what is it?
Lifestyle marketing is a distinctive use of content marketing aimed at a micro-segment of the membership base called a “niche.”
First, let’s explain content marketing.
As the Content Marketing Institute defines the term:
“Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience — and, ultimately, to drive profitable customer action.
Instead of pitching products or services, content marketing provides relevant and useful content to your prospects and customers to help them solve issues in their work (B2B content) or personal lives (B2C content).”
The point of content marketing is not to push the features and benefits of a product or service. Instead, the subject matter of the content expresses a broader scope, communicating mostly non-product information that audience members find interesting and engaging. Often, engagement extends to audience members interacting with each other online in sharing reactions to the content.
Such engagement casts the content provider in a favorable light, building trust. Individual audience members feel the content provider “gets me” because the information aligns with their interests, values, and beliefs.
However, content marketing simply serves as the motor under the hood of lifestyle marketing. What makes lifestyle marketing particularly effective is the nature of its “clearly defined audience”: niches.
Niches are carefully defined sub-segments of the credit union’s member base that have buying potential for the institution’s products and services.
Niches can be defined by one or a combination of dimensions, such as:
- Culture or language
- Demographics
- Location
- Needs & Preferences
- Occupation or avocation
The spotlight on niches makes lifestyle marketing a distinctive refinement of conventional content marketing because the latter is typically aimed at a broader, less differentiated audience. In contrast, niches maintain a laser focus on very tightly defined groups with information explicitly targeted to their interests, values, and beliefs aimed at building trust and engagement.
So, what’s the point of building trust and engagement? As noted above, consumers buy because they believe the product or service meets their needs and desires and are both ready to buy and trust the seller. Lifestyle marketing addresses the trust element but also the timing issue. Because engaging content is consistently presented over time, when members are ready to buy, they have a long-standing positive attitude about the seller/content provider.
For example, suppose a niche is focused on travel. Therefore, the content and social interaction of the audience are completely concerned with travel-related topics. Niche members know the credit union provides the content, so they associate a good feeling about the content with the content provider. Within the content, the credit union might sprinkle in subtle but strategic calls to action. For travel, it might be a reference to a travel rewards credit card. Since the product is logically related to travel and the audience trusts the content provider, they may be more receptive to the call to action when they feel ready to acquire such a card.
Another example would be a niche for Millennials (ages 29-45). Many people in this age group may be interested in content like buying a first new car, buying a home, or saving for kids’ college education. Establishing the content provider as a trusted source of truth and insight will make it more likely that when the member is ready for a home mortgage, car loan, or 529 plan, they’ll turn to the credit union.
So, the overarching goal is to help the credit union sell more products, increase products per member, and increase that wallet share. In a sense, lifestyle marketing could be described as “selling without selling” because the credit union provides content of interest to build trust and credibility, which leads to members having the credit union to be top of mind when they are ready to buy financial products and services.
Product marketing may be the 800-pound gorilla in the marketplace, but another way to characterize it would be to say there are 800 800-pound gorillas all screaming to be heard at once. Lifestyle marketing avoids this inefficient (and expensive) chaos by building trust within tightly defined subsegments. Those members develop deeper and lasting positive attitudes about the content provider, making the credit union their preferred choice for financial products and services.
