Q&A: Leeds Credit Union’s Head of Marketing

Greg Potter, Head of Marketing and Member Experience at Leeds Credit Union, explains how marketing works at the lender.

What is your overall marketing strategy?

Credit unions are not-for-profits and a lot of us don’t have a lot of money, many credit unions are reliant on grant funding from councils because many were started by councils and then became independent. But one of the bigger [strategic goals] certainly is in terms of growing members. We have 30,000 members.

The key challenge for us – and indeed many credit unions – is trying to do is raise brand awareness. If I went and stood in the centre of Leeds and asked 50 people, I’d be surprised if more than two or three had heard of credit unions and if more than one had any sort of meaningful awareness of what we did.

A lot of what we’re trying to do is very low cost, getting our name out there, raising awareness through PR. It’s also developing our content, because even in the two years I’ve been here, the number of people applying to join or for loans or via our mobile app has increased significantly. So we’re trying to make more video content around simple how-to things, such as how to access and use our services.

Our core audience is the financially excluded and financially vulnerable, and there’s many different figures about how many people don’t have bank accounts, ranging from 2 to about 6 million people. Our average loan size is just under £1000, and we’re dealing with people who the mainstream banks and building societies potentially don’t really want to deal with. They have very poor credit histories, many are unemployed or have low levels of financial literacy.

So a lot of what we’re trying to do is that social purpose work. Beyond just offering the savings accounts and cost-effective lending is education. A lot of material covers things like what a credit score is, how do I improve it, how do I understand my payslip, how do I save money and how do I write a household budget to make my money go further.

So that points to the education about what a credit union is and making that meaningful to people.

What are the core benefits of credit unions that you aim to bring out to people?

The core thing about credit unions is that we are very local. We have to operate in what’s called the common bond – a bond amongst all the members. This could be an occupation, such as nurse or police officer credit unions, but the vast majority these days tend to be geographical. Ours is the Leeds and Wakefield council areas and the London Borough of Barking and Dagenham.

We’re not some sort of national entity – HSBC might have had the tagline of “the world’s local bank” but we truly are local.

The main thing is we are there to help people build financial resilience. Around 60% of our members are in the bottom four deciles of household income, so their income is less than around £25000. They don’t have any money spare – if the washing machine breaks down they’re stuck. Their only other choices may be either high interest doorstep lenders or even worse, loan sharks.

So our journey with a member is they might come to us to borrow a small loan. If they get the loan and repay it, their credit score will improve. And they’ve proved to us and themselves that they can afford to make the repayment of say £15 per week. So we would say, you’ve repaid that loan, you’ve been paying £15 per week, why not start putting that into a savings account? So they start building that safety net. We’re not about people earning interest on their savings, it’s just about them having that safety net so the next time they meet a financial bump in the road, they can deal with it.

Which channels do you find most effective?

Our main marketing channel is PPC, followed by social advertising. We’ve got very good at analysis and targeting and refining what we’re using, in terms of which search terms we’re going for. We take a big company approach in terms of that analysis of ROI and measurement.

We’re doing a lot of testing at the moment, including a lot of email format tests. We’re doing a lot of work on our website as well, such as multi-variate testing to improve open and click-through rates for the emails.

One of the other important channels we have, which sadly is very hard to control, is word-of-mouth. But it is very hard to influence.

What are your priorities for the next 12 months?

Our mission is to be that sustainable organisation because, as I said, like a lot of credit unions we previously have relied on funding from various organisations. Councils are under cost pressure. We need to be in a position where we can stand completely on our own two feet and we’re nearly there, but that is the main drive for the next 12 months.

So supporting that is all about growing our membership and our lending.