Greetings and salutations, my loyal subscribers. If you’ve been following my latest posts while staying keenly focused on the current mortgage market, you know that the credit union home loan business has been challenging. Some may even say that “challenging” is a huge understatement.
Fortunately, as I’ve learned through discussions with myCUmortgage leadership and experts as well as credit union mortgage industry leaders, we all agree that today’s market conditions are temporary. It’s the cyclical nature of the business. That said, you ask, “How long will this part of the cycle last? And what do we need to do to ride it out?”
Indeed, “riding it out” is one option, but it is an option I do not suggest based on some marketing history I recently picked up.
Last week, I had to take in my hydro ionizing and cooling unit to one of your Earth appliance repair shops. The technical specs of the unit are very similar to a combination of one of your window air conditioners and a humidifier. While the repair technician looked a bit puzzled (I’m not sure if the look was directed at the device or my physical presence), he said it should take about an hour to repair. He fortunately had a canceled appointment and could work me in immediately, so I waited in their lobby.
I was amazed by the selection of literature they had within my tentacle’s reach – amazed not by the variety of publications, mind you, but by the dates on the publications. For example, one of the periodicals covered the presidential election of a former Hollywood actor named Ronald Reagan. Nevertheless, I was drawn to the unique cover art of an issue of The New Yorker. Inside was a timeless article about marketing by companies during tough economic cycles.
A great example from the article is about the marketing decisions made by two major breakfast cereal brands: Kellogg’s and Post. As the article pointed out, Post’s course of action during the economic downturn was to cut costs while they rode out the storm. One of their biggest cuts was to their marketing budget. They practically stopped advertising completely to their vast audience of cereal lovers and pretty much dropped out of sight – and out of mind.
Meanwhile, on the other side of the aisle, Kellogg’s was doing the complete opposite. According to the article, Kellogg’s doubled their marketing budget, moved aggressively into new advertising channels and heavily promoted their new cereal, Rice Krispies. Following these calculated moves, Kellogg’s profits went up 30% and they took over the lead in the cereal industry – a spot they hold to this day.
My question (and hopefully the answer) to fellow credit union mortgage lenders is this: During today’s challenging market, do you want to be Kellogg’s or Post? Your members seeking a true partner for their homeownership journey certainly want Kellogg’s, so are you ready to give them what they crave (and I’m not talking about Rice Krispies)?
While financial resources may be especially limited during hard economic times, we need to take advantage of resources such as time, creativity, opportunity and collaboration. Consider everything we DO have and look at reallocating some of those resources that aren’t being used as much.
On top of that, we need to get creative and think outside the box on how to market to members and prospective borrowers efficiently and effectively. Check out some of my previous posts outlining tactics and tools that have minimal impact on your resources (e.g., social media, branch and member center “take ones,” statement inserts, industry partnerships, etc.) and could have a positive impact on staying in front of your target markets so that when they are ready, they’ll think of your credit union first.
A colleague whom I shared this story with put it another way. We must have a “garage band” mentality. That is, we don’t have roadies or fancy tour buses. We need to get our hands dirty, put in some hard work, set up our own stage and equipment and make the most of what we have… until we hit the big time. (FYI: This is a little rock-and-roll teaser for the 2023 myCUmortgage Partner Conference. I’ll be talking a lot more about the event soon, but in the meantime, be sure to visit https://2023-mycu-partner-conference.constantcontactsites.com/ today!)
But back to breakfast cereal. I now have a galactic craving for some Rice Krispies! How about you? Go grab yourself a bowl and prepare to deliver your homeownership-seeking members some genuine credit union SNAP, CRACKLE and POP!