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Don’t Let it Sneak Up on You – Holiday Marketing Planning Starts Now!

By Mark's Minutes

If you wait until Halloween to start thinking about the Holiday season, you’ll miss the opportunity. That’s why major retailers are already displaying holiday items in their stores…right now. You can actually purchase your pre-lit Christmas tree today at Costco.

The Holiday period is traditionally seen as immediately following Halloween. From November 1 through December 26, you have the chance to build business opportunity for your organization and your consumers.

Holiday Marketing Opportunities

Holiday promotional themes are as timeless as the holidays themselves. In fact, The Financial Brand has reported on the major holiday promotional opportunities. It’s an extensive list but some our favorites include proven tactics such as Holiday Loans, Skip-a-Payment Promotions and Free Gift Wrapping.

Holiday Loan Campaigns

During this time of year, consumers are looking for that little extra to get them through the heavy shopping period. It’s a natural time to reach out with a lifeline for some extra funds.

We are fond of small loan amounts that can be presented in many ways including branch merchandising, direct mail letterchecks, email announcements and statement inserts. The key is to ensure that all consumers have a chance to participate at their appropriate lending level.

Here is a great example of a campaign we prepared for our client, University Credit Union: Instant Loan UCU.pdf

Skip-a-Pay Offers

Skip-a-pay loans have been popular for years. It’s a simple concept with big benefits. And it’s one that consumers appreciate. Especially during the holidays when things can be tight.

The concept is simple, and you can use with many types of accounts.

For instance, if you have an auto loan that you want to promote for your skip, simply allow the consumer to skip the next payment, and add that payment to the end of the loan. Some institutions add a small charge for the convenience which helps to offset the loss in the loan revenue.

An example might be a $600 car loan payment that you allow to skip for a $75 convenience fee. That $600 gets added at the back end of the loan so you haven’t lost it.

In most circumstances, this is a win for both you and your account holders as the small price they pay to skip a loan is a big benefit over the next payment they may have to make. That extra breathing room might be enough to help them avoid missing a payment and incurring late charges or start a downhill slide.

Gift Wrapping/Paper

How about a nice premium that brings people into your offices? Custom gift-wrapping paper and/or gift wrapping service allows you to generate some much needed face time with your consumers. It gives you a chance to help them with an important holiday chore, and reconnect with your staff and products.

Customized wrapping paper featuring your logo and/or design can be produced for pennies. Offering consumers both free wrapping paper and wrapping services are a sure fire method to generate attention.

Staying Top Of Mind – Proven “Old School” Methods

By Mark's Minutes

I’ve been working in the marketing communication space longer than I care to admit. (Actually I do admit it at the bottom of the page! 😃)

I’ve seen our approach to consumer communication shortened, streamlined, and sped up. All in an effort to be “more efficient and effective.”

The shift from analog to digital, along with the programmatic methods of connecting, targeting, and pushing has eliminated some fond and friendly methods. Methods that were steeped in tradition, and valued for their relevance and impact.

Digital media does not build emotional connection like print media

In 2016, researchers from the University of Maryland published their findings on this topic in The Journal of Experimental Education. Their research suggest that printed marketing materials tend to outperform digital when it comes to reading comprehension, recall, emotional impact and persuasiveness.

The researchers first asked college students which medium they preferred to use for studying, and which they felt offered them the best recall. Ironically, students overwhelmingly chose digital content for both responses. However, when they were tested on their actual retention of information, the results demonstrated that these students clearly had better recall after reading printed materials.

Explore some favorite ways to add more balance to your Marcom mix

Like any good mix, strive for a balance. New and old. Digital and analog. Online and in person. Here are some great (many forgotten) tools that are still being used by many of our clients:

The Wall Calendar – The printed wall calendar is alive and well. In the past week alone, I’ve received two wall calendars in the mail from organizations I do business with. The obvious benefit – I think of them every time I look at the calendar. Make sure to create one that is relevant to you and your audience. We produce many with photos submitted by clients. You can pull together imagery of all types all long as it is relevant and supports your brand. Consider customizing the dates with important local information, suggestions, or helpful tips.

The Thank You Card – Does your organization have a formal thank you card that your front line team can use? A thank you email is one thing…and EVERYONE uses them (along with a survey that nobody wants to answer). But the card that is handwritten knows no equal in impact. People open them, read them, sometimes share them and often keep them. Do you have a stash of professionally printed thank you cards with matching envelopes? Perhaps you should.

The Holiday Card Mailing – Do you reach out to your clients on the holidays? Few people do anymore. Instead, they send out another email wishing “wonderful seasons greetings” or some other worn sentiment. A thoughtful card, preferably signed, is a message that will likely be displayed around the office. Plus, the creative options are endless. From ornaments to music playlists and funny photos with QR codes to link to videos, the chance to put a smile on a face and a warm spot in the heart is increased.

Interested in some of these ideas? Just drop me a line and I’ll send you samples for your review

Winning the Battle Against Buy Now & Pay Later Programs

By Mark's Minutes

The field of players in the “Buy Now Pay Later” service, or BNPL continue to grow. This year has seen the addition of Apple into the mix with their “Apple Pay Later” offering. Apple joins a growing field of payment providers that are offering the “installment loan” solution to purchases.

Installment loans are the age-old method of “paying later.” Most of the early installment loans were retailer driven. You wanted to buy something buy couldn’t afford it, the retailer would book the sale and take your down payment and then bill you for the difference. It might be a 12 or 24 month schedule with interest payments included.

New “No Interest” Payment Programs

These BNPL loans are now referred to as point-of-sale financing.

Buy it now, but pay it later. And, without any interest payments. This sure seems like a free lunch. However, if you miss a payment there often is a large late fee for some providers. In the case of Apple Pay Later, if you miss a payment your future purchases are prohibited.

Still, many are signing on to the service. It’s estimated that today, there are in excess of $100 Billion in annual loans and growing.

Younger Consumers are Using BNPL

According to statistics from Cornerstone Advisors, the usage of BNPL skews younger, with the largest segment being Millennials. Currently, 41% of Millennials are using the service:

Gen Z (21-25) 36%
Millennials (26-40) 41%
Gen X (41-55) 30%
Boomers (56-75) 18%

With so many younger consumers using the service, it’s critical to maintain a retention strategy to avoid losing these relationships.

What Can You Do to Compete?

Cody Banks from PSCU explained the challenge this way, “Institutions should package BNPL services in a way that promotes responsible use AND aligns with the institution’s vision.”

Today, you can partner with a provider to offer similar services to remain relevant in all categories of payment/lending services. But this isn’t a winning strategy on its own. You must also leverage the other advantages that your institution brings to the relationship.

Leverage BNPL to grow the Complete Relationship

Offering a BNPL is just one leg of the service stool. Like any tool that facilitates spending, it can be misused. For many it can lead to unintended consequences…like spending more than you earn.

Instead, resolve to be a proactive resource with financial wellness initiatives and products that feature low fees and low interest. Actively reach out to the younger segments to help them build good credit habits with a starter credit card, or offer a balance transfer from a higher rate card to yours.

Because these are smaller balances and transactions, this strategy won’t drive short-term profits. However, it will build a deeper relationship and a meaningful access to these consumers as they grow and evolve.

Solving Borrowers Long-term Needs

By Mark's Minutes

The economy keeps chugging along despite the predictions from seemingly everyone. Although interest rates have increased, all signs are showing that the economy is resilient. But things aren’t exactly what they seem. It depends on where you look.

There are areas of growing consumer risk.

Credit Card Debt is Climbing

A recent article from CBS News reports the following:

“More Americans are racking up credit card debt as inflation pushes up the cost of food, utilities and other staples.” And, “60% of credit card holders have been carrying balances on their cards for at least a year, up 10% from 2021.”

“59% of Americans who earn less than $50,000 a year carry a credit card balance from month to month,” the reporting notes. “The percentage drops slightly to 49% for those who earn between $50,000 and $80,000 and dips again to 46% for people making $80,000 to $100,000 a year.”

Most people don’t want to compromise their lifestyle choices when they are coming up short during these inflationary times. So, they are making up the difference with credit card spending.

And with some of today’s credit card rates hovering around 25%, it doesn’t take long to rack up massive debt.

The Real Cost of Consumer Debt

Making excessive interest payments is not a healthy practice. The credit card trap relies on those that get into a terrible habit of running up balances, resorting to the minimum balance payment, and never paying off the principal. Once you arrive at the cycle, it’s almost impossible to break.

And, when someone does default, everybody else pays for it through higher rates and fees.

Repackaging Loans and Educating Consumers

Before things get worse, now is that time to reach out to those account holders in need. You can pro-actively move those high balance accounts into lower priced options, such as home equity loans. But just as important as solving that initial problem, you can augment this effort with some financial education to help your users from becoming a statistic.

Tools that can help you focus their efforts on sound financial management include:

• Webinars covering the ABCs of household finances

• Educational web pages sharing the true cost of financial decisions

• Financial planning brochures with worksheets and budgeting tools

• Individual counseling

While many of these tools have been in existence for years, often people don’t notice their availability or their need until they are beginning to face financial discomfort. And that becomes the time that you can help them plot a new trajectory for their life.

Help them now…and forever.

Additional Pricing Strategy Discussion

By Mark's Minutes

Last week we discussed the impact of the Fed’s move on pricing strategy. We also started with the assumption that organizations are likely in the latter stages of dealing with this dilemma.

We learned that we (as individuals and organizations), go through several phases when a change (or major life event) occurs:

Shock – We aren’t ready for the change; it’s a surprise.
Fear – We are now afraid of what this may mean to our world; we are scared.
Acceptance – We’ve come to accept that now this new set of conditions is going to remain
Transformation – Now that we have accepted these changes, we have to adjust our perspective to fit this new reality.

Everybody goes through these phases at different speeds. And so does an organization.

I believe that most organizations have gone through the acceptance phase but are still struggling with the transformation stage. But this is exactly where we need to be heading – to explore a new way of pricing that is more dynamic than what we have historically relied upon.

In a recent article in Financial Brand, they discussed key strategies to optimize your pricing strategy in these times. It’s worth sharing:

Savvy financial institutions around the world are experimenting with unconventional inputs to create pricing models that allow them to stand out in their market and appeal to the customers they want to serve.

Here are just a few examples:

In the United States, a midsize credit union rewards long-term customers with more favorable loan and deposit pricing. Customer loyalty creates value for the credit union, and giving special rates to these individuals strengthens the overall relationship.
In Europe, a large retail bank calculates a relationship score by evaluating assets and liabilities across multiple customer accounts (retail, wealth, business, etc.). The resulting “value score” is used as a pricing attribute when they’re creating a rate sheet. We’ve also seen these scores used to impact fee waivers and cash back rewards.
In the U.K., a large commercial bank incorporates climate data into how it prices loans secured by real estate. So, for example, if a property is located in a floodplain, the loan would be priced to reflect the increased risk of operating a business in that location.

By moving away from one-size-fits-all pricing models, these financial institutions are capturing business that works well for them at a price they — and their customers — find attractive.

Now these ideas may not be exactly what you are looking for. However, the idea is not to necessarily copy somebody else’s plan, but to create your own.

Coming out of this most recent season shows everyone how inflexible and obsolete our current pricing methodologies are. There is room for improvement.

Can you use this as a backdrop to building a new approach for your organization? Now’s the time.

Thanks for joining me today!