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What good is offering a service if nobody knows about it? Implementing a short-term credit service for members requires a touch of marketing. Here are a few outreach strategies for credit union small-dollar loan programs.
In this blog, we’ll first discuss who benefits mot from small-dollar loans. Then, we’ll suggest which communities to reach out to. What we can’t do in this blog is give definite marketing strategy—that’s a task for your marketing team.
Understanding Your Audience
Knowing who your product serves is important. Understanding who might use the service and why can help your marketing team strategize effectively.
Credit union small-dollar loan programs are designed to serve a surprising portion of the American population:
- Almost 60% of American workers live paycheck-to-paycheck.
- 40% of American workers don’t have $400 in emergency funds.
- 72% of Americans are considered “not financially healthy”
Anybody encompassed in the above statistics might benefit from a credit union small-dollar loan program. For these people, car trouble, a couple missed shifts, or a broken bone would be an insurmountable financial setback. They might have to choose between paying their emergency bill and paying rent.
How to Reach Your Target Audience
Sometimes it’s just as critical to understand who your product is not for. Credit union small-dollar loan programs generally don’t serve “financially healthy” members. There’s no reason to offer $600 loans to members with six months of living expenses in their accounts.
Instead, focus your marketing objectives to the people who need short-term credit services immediately. From there, reach out to other at-risk members, and then the community at large. Here are the three best steps we’ve found so far.
1. Identify who already uses similar services
One thing that credit unions can do is monitor their members’ financial activity. Take note of which members have short-term lending ACH payments. Let them know that your credit union offers the same service.
You can serve these members by providing them better small-dollar loan options. Additionally, you can protect them from potentially predatory lending practices from outside lenders.
2. Let the rest of your members know about your new loan options
Once you have your small-dollar loan program online, you should let the rest of your members know about it. Place it on your website and make sure that you touch on it in any official communications.
It’s critical to communicate simply and concisely to your members about how your program works. They should know:
- What small-dollar loans are
- Why you offer them
- Who they serve
- Any notable use cases
Your members should quickly understand why you’re offering the service. They should know after their first introduction what small-dollar loans can be used for.
3. Communicate with your outside environment
Lastly, look beyond your credit union membership. Identify which markets you want to attract and let them know that your credit union offers small-dollar loans.
Your outreach should include educating community stakeholders as well. Together, you and they can become advocates for responsible lending practices in at-risk communities.
The world of short-term credit is rapidly expanding as reputable financial institutions enter the marketplace. Credit unions and their members can both benefit from responsible small-dollar loan programs.
If you’re interested in learning more about how small-dollar loans can serve credit union members, follow the links below. Or, if you’d like to see how quick loans can help members during emergencies, download our Member Crisis Guide[.
- What Level of Staffing Do I Need for My Credit Union Small-Dollar Loan Program?
- Overcoming Potential PR Issues from Credit Union Small-Dollar Loan Programs
- The Member Segments Most Affected by Credit Union Small-Dollar Loan Programs
- Measuring the Success of Your Credit Union’s Small-Dollar Loan Program
- Best Practices for Marketing a Credit Union Small-Dollar Loan Program