Ah, summer … the weather is warmer, schools are out, barbecues are firing up, vacations are occurring, and pools and camps are opening. All these good vibrations have a ripple effect, though, as they create behavioral, economic, and psychological shifts in society that financial institutions must be mindful of for a few months on an annual basis. But what better opportunity for strategic banks and credit unions to craft meaningful marketing strategies than a known period where society changes in a predictable manner for a finite time? In this issue of Compound Interest, we will examine types of summer marketing promotions that banks and credit unions can take advantage of.
Making A Marketing Strategy out of What’s Happening
The summer activities and changes mentioned above happen every summer. It’s one of the more predictable patterns we have in an increasingly unpredictable banking industry landscape. This seasonal predictability is a tremendous handicap for banks – both in choosing what products or banking services to promote during these months and how to promote them. It all ties back to your audience and their behaviors. Seasonal shifts related to behavioral economics can be a great guide for what banking products or services to promote. Next, you will want to evaluate who the audience is for those specific products or services. Once the audience is determined, you can evaluate how their general behaviors are different during the summer to inform the best way to reach them. Lastly, their likely psychological mindset at this time can be considered to help craft the messaging. Now we will look at some specific examples of opportunities that could be right for your bank or credit union.
Time to Renovate Your HELOC Marketing Strategy
Summer is a popular time for home renovations, making HELOCs a natural product to promote this time of year. While HELOC origination was down in Q2, it’s important to note that this is compared to 2022, when HELOC volume soared. The drop in origination this year appears to be happening at large national banks experiencing tightening credit in the aftermath of bank failures earlier this year. The propensity for summer projects, mixed with a cooling housing market, could signal some hope for HELOC origination over the coming months. This would be a much-welcomed relief for lenders, given the state of consumer loans at large right now.
One potential strategy banks could implement would be to specifically address existing homeowners who might normally be good mortgage prospects due to their current lifecycle state but don’t consider now a good time to purchase. A recent Gallup poll indicated that only 21% of U.S. adults believe that it’s currently a good time to buy a house. This is 9% lower than the previous low mark since Gallup began recording this data point in 1978 and a whopping 42% lower than the average percentage from every previous poll prior to 2023. This group can be a good target audience as potential customers for HELOCs. By segmenting this audience further, you can bucket portions of the audience by what type of renovation they’re most likely to pursue and tailor the marketing channels for each audience segment based on their media consumption. The final output can be a personalized message that addresses a pain point by offering a solution for making their existing residence more desirable for them.
Vacation Loan Promotions
Summer is a popular time for vacations – especially for families with children due to school being out for the summer, which allows for longer vacations without disrupting to education. However, traveling for a week or more with multiple family members is expensive and is getting even more so. According to the U.S. Travel Association’s Travel Price Index, travel prices rose 19.6% from April 2019 to April 2023. This leaves many families looking to take more expensive vacations and searching for a means to finance their travel. A TransUnion study from last May 2023, found, 8% of consumers plan to use a Buy Now Pay Later (BNPL) loan to pay for their upcoming travel.
Designing a promotional campaign and bank marketing strategy around summer vacation loans can be more than just a great way to spark consumer loan growth. A strong social media component that highlights some touching customer stories of individuals who had once-in-a-lifetime experiences due to the financing or families who were able to use the funding to create memories they will cherish for years to come can go a long way toward a bank or credit union standing out in a crowded space on an emotional level.
New Savings Growth From Teens
Another product of school being out for summer is that many teens use this time to pick up a summer job to build savings. Some of those teenagers won’t have an existing savings account. It’s likely that young people in this situation will consult their parents or other trusted figures for advice on the matter first and could also look to online search or friends as other information resources. This is why it’s important to provide information on how you can support teens in this situation but also make sure that the information is accessible to multiple audiences since it could be their parents who are in the best position to impact their decision to choose you over a competitor for their savings account. SEO is also an important consideration since online search can be a secondary resource they turn to for more information.
An important point to keep in mind for this is that just having a suitable account type and competitive rates isn’t everything when it comes to this situation. A strong financial education component paired with a right-sized account and promotional rate can be a powerful combination to get new accounts in the door, build customer loyalty with both the teen and their parents, and guide the teen on growing their savings moving forward. Front-line staff can be key in disseminating this message because it presents a great opportunity to deepen relationships with your existing customer base while bringing on new accounts. Coaching employees to ask current customers who are parents about how their summer is going and what their kids are up to with school out can be a great way to open the door for this conversation. Paid digital marketing and content marketing through your own blog or social media platforms can help amplify your efforts while making the message accessible for parents and teens alike.
New Accounts for New Graduates
Another young audience that banks that credit unions can tap into is recent high school graduates. These individuals aren’t just going through a seasonal change but a major life change after completing their high school education. A portion of this group will be going off to college and may not have their own bank account or credit card or may have one with a financial institution that doesn’t have branches or ATMs in the area they’re moving to. Another portion will be beginning their career out of high school, and some will need a new account regardless of whether they’re moving locations. Both audiences are transitioning into a unique time when they will have financial services needs and can likely use some guidance or financial literacy resources.
One great way that banks and credit unions can capture some of these new accounts is through sponsorship activities with local high schools within their target market to capture outgoing graduates and with local colleges or universities within their target area that have incoming students moving into the area. Local media outlets such as radio stations can be a great source for finding relevant sponsorship opportunities with schools. You will, of course, want to also support any paid sponsorships or media placements promoting this with messaging across your owned and shared channels, such as your website, social media accounts and newsletters. As with messaging for teens getting summer jobs, this should be viewed as a dual audience, including graduates and their parents. In-branch signage and literature can be another great supporting marketing tactic to add on-site touchpoints. When going after younger audiences, it’s also important to make sure your digital banking, banking app and mobile banking are strong enough to ensure they have a positive customer experience.
How You Can Make the Most of Summer
As discussed, a strong promotional strategy mixed with the right marketing campaign will help financial institutions add new customer relationships over the summer. Just make sure you also leave some time for your own vacation! Give us a call at (502) 499-4209 or drop us a note here, and we will make sure you’re able to accomplish both your growth and vacation initiatives this year!