What Do We Need Marketing For?

In my (very glamorous, high-profile) job as an industry analyst, I’m supposed to be on top of industry trends and happenings. For other analysts, that means talking to a lot of people.

Ugh. Mr. Cranky doesn’t like talking to people. 

So I’ve planted listening devices in the offices of leading financial services execs to hear what’s really going on.

The following is (as best as I can make it out, the audio quality wasn’t that good) a conversation between the CEO and CMO of JYAFCU (Just Your Average Federal Credit Union), on Monday, November 7th, the first working day after Bank Transfer Day. 

CEO: How did we do on Saturday?

CMO: (mumbling) You would know if you had bothered to show up.

CEO: What’s that? Can’t hear you. 

CMO: I said, “wouldn’t you know, we did very well.”

CEO: I read that overall, credit unions pulled in 40,000 new accounts and $80 million dollars in deposits. What did we bring in?

CMO: Well, considering we’re JUST YOUR AVERAGE credit union, we opened 6 new accounts, and added $12,000 in deposits. 

CEO: So that’s like, what? One account per hour that we were open on Saturday?

CMO: Uh, yep.

CEO: And were all branches open?

CMO: Uh, yep. 

CEO: So then, not every branch even averaged one new account per hour. 

CMO: Uh, nope.

CEO: How did we do in the month leading up to Bank Transfer Day? CUNA says credit unions opened 650,000 new accounts and brought in $4.5 billion in new deposits. 

CMO: Well, boss, seeing that we’re JUST YOUR AVERAGE credit union, we opened 91 accounts and took in $630,000 in deposits. 

CEO: Well, I’m no CFO, but something doesn’t seem right to me with those numbers.

CMO: I’m the marketing person. Maybe you better explain it to me. 

CEO: Well, on BTD we averaged $2000 in deposits per new account. As did the industry overall, for that matter. Yet, in the month leading up to BTD, we averaged nearly $7000 in deposits per new account. Why the discrepancy?

CMO: I don’t know. My people are working on it. 

CEO: OK, so let’s recap. Since the end of September, we’ve added 97 new members, did I get that right?

CMO: Sure did. 

CEO: So we currently have how many members?

CMO: That would be 12,783. We ended September with 12, 686, which, interestingly enough, is the credit union industry average. 

CEO: Well, I’m no CFO, but my trusty calculator says that’s about 0.8% growth in the month. 

CMO: That’s correct. 

CEO: Remind me again what our membership growth was from September 2010 through September 2011. 

CMO: We grew by the industry average of 1.7%.

CEO: And remind me again what our marketing budget is. 

CMO: Our marketing budget is 1% of assets, which is about the industry average, which comes out to $1.3 million. 

CEO: And remind me again what we spent to create Bank Transfer Day.

CMO: We didn’t spend anything to create Bank Transfer Day.

CEO: OK. Now remind me of one last thing: What do I need you for?

CMO: Huh? What do you mean?

CEO: Between September 2010 and September 2011, we spent $1.3 million on marketing which produced 216 new members. That means we spent about $6000 per new member. According to that Net Promoter guy from Bain, it costs 6 to 7 times more to acquire a customer than retain one, isn’t that right?

CMO: Ron Shevlin says that’s quantipulation.

CEO: When Ron Shevlin writes a bestselling management book, I’ll listen to what Ron Shevlin has to say. In the meantime,  I have to assume that the vast majority of our marketing budget is focused on member acquisition and not retention. So, even if the part of the marketing budget that went to acquisition was just $1 million, we still spent more than $4600 in the past year to acquire each new member. And what you’re telling me is that in the past month we acquired 45% of the total number of members we acquired in the previous 12 months — at absolutely no cost to us. I ask you again:

What do I need marketing for?

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2 thoughts on “What Do We Need Marketing For?

  1. Completely believable … until you got to the end. How the end really happened …

    CMO: Ron Shevlin says that’s quantipulation.
    CEO: Who’s Ron Shevlin?
    CMO: An analyst with Aite Group.
    CEO: I don’t care that you ate grouper for lunch.
    CMO: Whatever?
    CEO: So, what do I need marketing for?
    CMO: But, dad …

  2. Ron obviously has listening devices inside the offices of many credit union CEOs. Possible alternate ending to conversation:

    CMO: To quote Dilbert, “marketing didn’t turn out to be the glamour career I expected.:

    CEO: I don’t care about your career; I just want you to show me the ROI on everything you do.

    CMO: To quote Gary Vaynerchuk, “What’s the ROI of your mother?”

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