Cutting your marketing budget is dangerous
Budget season certainly seems to be the right time for cutting fat, and unfortunately CFOs always seem to feel that the marketing line needs to lose a few pounds. But cutting your marketing budget will not help you improve your bottom line.
In fact, it is likely dangerous.
Marketing is the oil that allows the CU machine to work.
Without a continual source of new members and product awareness, the CU machine will slowly wear down and grind to a halt. Without new members, new loans and new deposits, current members become a finite resource. When they leave, or hear about a better deal down the street from a competitor still marketing, it puts that much more strain on those members who are left, as income for the CU continues to drop and margins become ever tighter.
Can a Board really be that ignorant about how marketing works? Surely they can understand when Harvard Business School says that companies that do more marketing maintain their share and often gain the most at the expense of those that are not marketing. Or perhaps they can take a lesson from Moxie’s historical decision to cut their marketing in the 1930s, which resulted in losing market share to their competitor, Coca Cola, who continued to advertise.
Or is this lack of understanding of marketing simply because marketers don’t do enough to toot their own horn and teach Management and the Board about their importance? It’s probable that marketers are too busy marketing the credit union to market themselves internally. But if so, how can you expect management to see the value in what you do, when no one has pointed it out to them?
Maybe it’s time for a little shameless self-promotion.
In fact, make sure Marketing gets in front of the Board on a regular basis. Be accountable, with ROI numbers to go along with your shiny direct mail and mini-web site. Teach them the importance of marketing and how it fits into the success of the credit union, and your budget might actually grow fatter.
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