I recently read an article about a credit union that partnered with a local car dealership and gave away a brand new car at a hockey game. At first, this seems like it would be a nice way to make a brand impression, getting the crowd all excited with a brand new car. Nice PR move, right? Maybe. Let’s break this down and see what’s really happening.
To start, let’s talk branding. In this campaign, there are three brand impressions happening all at once, which lowers the effectiveness of each one. First, the stadium – it’s the primary brand everyone is coming to see. Second, the car dealership. Third, the credit union. To the crowd, the credit union is the last thing on their minds. They’re thinking: “I hope I win the car,” not “I want a loan from those guys.” By the end of the night, what brand do you think they’ll remember most?
Now, let’s talk numbers. I looked up this particular hockey game and found out that the stadium holds a little over 7000 people. Assuming that the stadium is at full capacity, how many of those watching the game are potential customers? The stadium is likely to have children, teenagers, and elderly folks. Lets just say half of them are between the age of 18 and 65. So, this particular marketing campaign would reach out to about 3500 people.
Now, lets talk costs. The car they were giving away appeared to be a 2013 Chevy Malibu, which starts at about $22,000. I don’t know how the partnership would have worked, but I would assume that the car dealership and credit union would be splitting the costs of the campaign, paying $11,000 each. That means that the credit union paid about $3.14 per person eligible for loan products and services.
Now, lets talk tracking. For $3.14 per person, how many of these folks actually came into the credit union to make deposits? Being a local venue, how many of the audience members already existed in the credit union? How many of them signed up for new loan products as a result of the car giveaway? The ultimate sign of success at a financial institution is loan revenue and deposits. The true measure of success for this campaign would be the cost per dollar of revenue generated. In order to break even, there would have to be enough new customers to generate a return of at least $11,000.
For some banks and credit unions, $11,000 dollars is an insignificant amount for the “branding” budget. But, for a lot of financial institutions, every dollar spent is meant to bring more than a dollar back. If it doesn’t, then the channel is cut, and the budget is allocated to a more targeted channel.
Granted, there is probably a lot more to this car giveaway campaign than meets the eye. The credit union could have partnered with the car dealership to offer vehicle financing, and this campaign could have been a way to gather information valuable to both partners. However, depending on the results of the campaign, it ends up being expensive information. It’d be interesting to know the ROI of this car giveaway.
What are your thoughts? Has your bank or credit union done anything similar? What were the results?