I – EXECUTIVE SUMMARY
I was asked by Freedom Community Credit Union to identify a customer profile and develop a plan to increase profit for 2009. There was no existing data to form a profile for their typical customer. I choose to use customer surveys to gather this information. Surveys were given to customers who came into the credit union from October 10th through October 15th. My primary findings from the surveys were that the
typical customer for Freedom CCU is male, age 51 to 70, lives in North Fargo, and has an average household income of $56,000-$68,000. The typical customer has been a member for more than 16 years, and heard about the credit union through the North Dakota Air National Guard. Their reasons for choosing the credit union over competitors are convenience and service.
The objective for this proposal is to increase profit for the upcoming year. An interview with Mary Hagen, manager of Freedom CCU, found that they would like to expand their market outside of NDANG. Since the credit union went open charter two years ago they have struggled to reach outside of their previous market of Air Guard members. An ad campaign will target families living within a 75-mile radius of the F-M area. Beginning in January a television ad will air on local networks informing viewers of an incentive program for new members; this will help reach the full target market of the 75-mile radius. Also, an insertion in a Friday edition of the Fargo Forum promoting the credit union’s services and incentive program will help directly reach the North Fargo residents. The February Home & Garden Show at the FARGODOME will also promote the credit union and help reach potential customers that may not respond to other types of advertising. To help expand to new customers I think it would greatly help to expand services. A re-evaluation of staff will allow us to assess the abilities of each employee and areas that could use improvement. Starting in December of this year surveys and interviews will be completed with each employee and implementation of training will occur in January. The total cost of this proposal is estimated at $10,297.20. At the completion of activities this proposal will be evaluated for the first time by management. During the first week of April membership numbers will be evaluated. The short term goal is to increase membership by 5%. The membership total from December 2008 will be compared to the membership total at the end of March to see if there was a 5% increase. In January 2010 profit will be calculated to see if the $1,000,000.00 goal was met. The major benefits of this proposal will increase Freedom CCU’s profit indefinitely, especially with implementation of staff training.
I am looking forward to meeting with you soon to discuss the proposal and findings of the surveys. I am confident that you will agree that this proposal will greatly benefit the future of Freedom Community Credit Union.
A. Description of the business or organization
Freedom Community Credit Union is located at 2940 University Drive North,
Fargo, ND 58102. It is located adjacent to the North Dakota Air National Guard. It is a
brown brick building with tan siding on the upper half. The drive through is located in the
front of the building; the entry to the left side. As you enter the credit union the teller
counter is located straight ahead. To the left is a small lobby with a television, computer,
and four chairs for waiting customers.
The credit union has six employees; one working part-time. Their typical
customers are Air National Guard employees. Freedom CCU went open charter in
2005, previously only serving Air Guard employees and family members. The credit
union serves a variety of financial needs, from kids’ savings accounts to mortgage
loans. The Freedom CCU mission statement states, “We are a member-owned and
controlled financial organization promoting financial responsibility, membership
involvement and dedicated to serving and educating our members, while maintaining
the credit union's long-term financial stability.”(Web4cu) In the Fargo-Moorhead area
credit unions make up a very small part of the market share. Located nearby within a
five block radius of Freedom CCU are branches of: Vision Bank, First International
Bank, State Bank & Trust, US Bank, and Gate City Bank.
B. Description of the community (economic, geographic, demographic,
socioeconomic factors)
Fargo is the largest city in North Dakota with a population of 92,660 with 92.5%
being Caucasian. The median age is 30 and the median family income is $50,486.
Fargo is located in the South Eastern edge of North Dakota, neighboring Moorhead,
MN, across the Red River. The Red River Valley is known for its rich farm land. A great
amount of the surrounding Fargo-Moorhead area is comprised of rural farms. Fargo
alone has more than 70 parks and 5 golf courses. Local attractions include: the
FARGODOME, Fargo Theatre, Red River Zoo, West Acres Shopping Center, Fargo Air
Museum, FM Redhawks, Fargo Force, and Plains Art Museum. These attractions
regularly pull in many visitors from neighboring towns. Fargo, being the largest city in
North Dakota, is a centralized hub for shopping and entertainment within a 200 mile
radius. There is one pre-school, 12 elementary schools, three middle schools, one
alternative high school, and two high schools in the Fargo Public School District. A third
high school is planned to open for the 2011 school year. Fargo-Moorhead colleges are:
North Dakota State University, Minnesota State University Moorhead, Concordia
College, Rassmusen College, and Minnesota State Community & Technical College.
The local colleges contribute significantly to the economy of the F-M area.
Fargo-Moorhead is a rapidly growing community with increased college enrollment, a new high
school, plus new and growing businesses and continual economic development.
III – RESEARCH METHODS USED IN THE STUDY
A. Rationale and description of the research methodologies selected to
I have been asked to create a customer profile and develop a plan to increase
business for Freedom CCU. The collection of secondary data for the credit union will
come from their website and manager. Demographic data about the Fargo area will be
collected from the Census website. Primary data will be collected through customer
surveys handed out to credit union patrons. Many of the questions on the survey will be
used to gather information about the typical customer. Questions included in the survey
are: gender, age, household income, and zip code; and are used to help define the
typical customer. A customer profile will be built after the surveys have been analyzed. I
decided to use customer surveys to more efficiently collect customer data. Some of this
data could be collected more precisely by going through customer files, but it would not
have been timely. This survey will give us a general idea of the typical customer and
how he or she feels about the performance of the credit union.
The survey was pretested with 15 people, including 10 from my marketing class.
I made a few minor changes after pre-testing the survey—mainly grammatical
corrections. A couple of suggestions were to add “Not a member,” as an answer to the
question “How long have you been a member?” but I have decided to leave that out
because the survey will only be given to current members coming to the credit union.
Another suggestion was to add the option of “Nothing” to the question: “What can we
improve on?” but I chose to also leave that out and put in “other” as an option instead.
B. Process of conducting the selected research method(s)
Approval for the surveys was granted by manager Mary Hagen on October 8th. I
took the surveys to Freedom CCU on October 10th and picked them up on October 15th.
The surveys were completed by customers who came into the credit union during these
days thirty-five surveys were completed. Prior to the completion of this survey no
primary data was in existence that could be used to develop a complete customer
profile. I utilized the survey to find out trends for a typical customer. Some of this
information could have been gathered by going through individual files for each
customer. This would have resulted in more accurate data, but it would have been
unrealistic to gather the data in a timely matter. Information contained in customer files
is confidential, and gaining access to even basic demographic data would have been
very difficult. In addition to developing a customer profile the survey was also used to
help identify areas that need improvement.
The interview with Mary Hagen, manager of Freedom CCU, was conducted on
October 27, 2008. While most patrons of Freedom CCU are members of the North
Dakota Air National Guard, Mrs. Hagen and the board of directors would like to expand
into serving more people within a 75-mile radius of the FM area. Mrs. Hagen’s goals for
the credit union are to increase membership by 5% and loans by $1,000,000.00 in
2009. She believes their biggest competition is State Bank, mainly because Freedom
CCU is currently unable to do business loans. Television and radio ads have worked
well in the past for the credit union. An incentive of $25.00 to current members who
bring in new members, has also been very effective. Given the current state of the
economy the strength of Freedom CCU is the fact that they are a credit union. Many
people are losing faith in banks and are looking for trusting alternatives. (For more
IV – FINDINGS AND POTENTIAL STRATEGIES BASED ON THE
RESEARCH PROCESS
A. Provide an analysis of the research and identify your major findings
Upon the completion of the survey a customer profile was quickly determined.
The typical customer for Freedom CCU is male, age 51 to 70, lives in North Fargo,
and has an average household income of $56,000-$68,000. The typical patron has
been a member for more than 16 years and heard about the credit union through the
North Dakota Air National Guard. Their reasons for choosing the credit union over
competitors are convenience and service. They also seem generally very pleased
with the credit union, and feel that there are no glaring needs for improvement at the
credit union. During the days of the survey most customers came in to make a
deposit and were very satisfied with service, ranking it four on a scale of one to four,
with four being the highest. Below are graphical representations of the survey
questions. Percentages are based off of the 35 completed surveys. (See page 21 in
appendix for survey)
6
Zip Code
58102 : 35% 58103 : 15% 58104 : 7% 58078 : 7% 56560 : 7% Other : 18%
Household Income
$30,000 or less : 11%$31,000-$45,000 : 11% $46,000-$55,000 :16% $56,000-$68,000 : 20% $69,000-$80,000 : 11% $81,000-$92,000 : 9% $93,000-$110,000 : 11% $111,000-$125,000 : 3% $126,000+ : 8%Age
19 or younger: 0% 20-30 :14% 31-40: 14% 41-50 :17% 51-60 : 26% 61-70 :26% 71+ : 3%Gender
Female 20%Male 80%
First learned about CU from:
Air Guard 74% Relative 14% Word-of-mouth 3% TV 6%
Advertisment 3%
Membership Time
B. B
a
s
e
d
on the analysis, identify potential
strategies that could be used to improve the business and
maintain/increase sales.
Now is a good time for credit unions to gain clients as banks are losing their
credibility in our standing economy. Time Magazine Online did an interview with
Patricia Smith, a Unitus CEO, “It’s very unfortunate what’s happened in the
banking industry…but, from our [credit unions] standpoint, it does give us an
opportunity to say we’re here. And we’re still lending.”
The goal for this proposal is to increase sales and promote Freedom
CCU’s quality service. While there likely is potential to grow membership by
targeting people at the Air Guard base, the management of Freedom CCU would
like to expand more into the community. Therefore, minimal advertising will be
directed towards the base at this time with my proposal. In the past, TV and radio
ads have worked well for the credit union. For this campaign I would also suggest
Satisfaction with
service (4 being
highest)
1 - 0% 2 - 0% 3 - 6% 4 - 94%
What can improve
speed of service - 3% availability - 3% Variety of services 0% Nothing - 80%
Reason for coming in
today
Loan 9% Deposit 46% Withdraw 26% Transfer 6% Other 13%Reason for choosing CU over com-petition Service 31%
Convenience 17% Family Influence 3% Other 9%
using some different techniques as well. A television ad could effectively appeal
to many residents of the local community, in addition to reaching potential
customers throughout the entire geographic target area.
Going to a local event such as the 2009 Home & Garden Show at the
FARGODOME would be very affective in getting the credit union out in the
public, while reaching potential customers who may not respond to traditional
advertising. Another way to reach North Fargo residents is through an insert in
the Fargo Forum. The insert would describe services and promote an incentive for becoming a member of Freedom CCU. The only downside of the insertion is
that it can only be circulated in North Fargo in order to keep this proposal under
budget.
Customers seem to be happy with the credit union with 80% of members
saying they wouldn’t change anything, but I believe minor changes could
significantly increase business at the credit union. Freedom CCU is not
positioned to fund major business loans, but they could handle loans to
highly-qualified small business owners.
As part of this proposal to grow membership at Freedom CCU, I would
recommend a re-evaluation of the current staff. By assessing the full capabilities
of each staff member, areas that need improvement can be easily identified. I
propose that employees take a survey about how they feel about their
capabilities and what they think they can do to improve personally and how they
feel Freedom CCU can improve. Those who are willing to increase their
knowledge for personal and professional growth should be fairly compensated for
the positive input their skills have on the business.
One or two of the employees should be trained to handle small business
loans. Employing a strategy to write loans to highly qualified business owners will
minimize risk and help Freedom CCU reach its full potential. If the only thing
holding back business lending is the knowledge of the staff, then it is prudent to
undergo training; whether it be in small business loans or otherwise. A
re-evaluation would greatly benefit all employees and help freedom CCU increase
business by broadening their available services. Additional skills gained through
staff training will serve to motivate employees by empowering them to bring
added value to the credit union.
V – PROPOSED PLAN
A. Develop a plan to implement strategies to improve the business and
maintain/increase sales
Television ads placed on local stations such as WDAY, together with those run
on CableOne Networks will effectively reach our target market. I would suggest slightly
modifying the current television ad the credit union is airing which portrays the great
services of the credit union. I would add a frame at the end that includes information
about an incentive program for joining the credit union. The suggested incentive
program would allow new members of Freedom CCU to become eligible to enter a
drawing for $1,000 cash. The 30-second ad will run at various time slots January
through March (see sample on appendix pages 22 & 23). The cost for the commercial is
Also, at the start of the year, by placing an insert in the Fargo Forum listing
services and promoting the incentive, Freedom CCU would effectively reach the North
Fargo community. It will be placed in the Friday, January 2nd, 2009 edition (see
appendix page 17). The cost of the insert is approximately $2,448.00.
Staff training would help increase profit as well. By increasing the skills and
knowledge of the staff more services can be offered, thus bringing in new business. The
specific plan for staff training will be determined after re-evaluations are complete. A
plan for individualized training will be developed that will cater to each employee’s
individual learning needs whether it be online training, CUNA books, or hands-on
learning at a conference or local college class. Re-evaluation interviews with
management will take place January 5-9, 2009 and implementation of training will take
place starting on January 26, 2009.The actual cost of staff training cannot officially be
determined until re-evaluations are complete, the estimated cost is $400.00 per
employee, or $2,000.00 total.
I would also recommend renting a booth during the Home & Garden Show at the
FARGODOME near the end of February. The credit union can gain new members
through promoting loans and other services to spectators looking for home remodeling
and decorating ideas. This will increase awareness of the credit union within the
community and help reach potential new members who may not respond to other types
of advertisements. All full-time employees will alternate shifts at the event, with at least
two present at a time. The cost for the event is approximately $1,169.00.
At the completion of activities this proposal will be evaluated for the first time by
management. During the first week of April membership numbers will be evaluated. The
short term goal is to increase membership by 5%. The membership total from
December 2008 will be compared to the membership total at the end of March to see if
there was a 5% increase. In January 2010 profit will be calculated to see if the
$1,000,000.00 goal was met.
B. Create/design a time line to implement your strategies
Jan 1, 2009- Start airing television ad on WDAY and CableOne Networks (See pages 22 & 23 in appendix for time slots)
Jan 2, 2009- Fargo Forum Newspaper Insert Continue airing television ad
Jan 5-9, 2009- Re-evaluation of staff & interviews conducted by board members Continue airing television ad
Jan 26, 2009- Implement staff training Continue airing television ad
Feb 27-Mar 1, 2009- Home & Garden Show booth Continue airing television ad
Continue implementation of staff training
Mar 31, 2009-Final air day of television ad
Finish implementation of staff training
Apr 2, 2009- Evaluation of proposal
(5% membership increase goal)
Apr 6, 2009- Cash Incentive drawing
Jan 4, 2010- Evaluation of proposal ($1,000.000.00 profit goal)
C. Proposed budget for the plan
Advertisement
Television Ad (Promote CU & $1,000 drawing
incentive)
CableOne & WDAY 30 second ad
Jan – Mar Various times (see example
invoices in appendix page
22 & 23)
Commercial
Modification…………..$100.00 CableOne
Network:
DISC(7 spots)… …..$182.00 FOOD (7 spots)….…$91.00 TNT (9 spots)……....$261.00 Agency Commission…($80.10) CableOne Total….…$453.90/m WDAY Network: WDAY(7 spots)….$870.00 Agency Commission..($130.50) WDAY Total…………$739.50/m
Television Ad Total :$3,680.20 Promotional
Incentive
$1,000 cash drawing
Monday, April 6
12:00PM Incentive………$1,000.00
Newspaper Insert Fargo Forum
(Insert)
Friday Jan. 2 Circulation: 6,200 North Fargo Insert Fee…………...$300.00 Flier ($.39/copy)……$2,148.00 Total Newspaper….$2,448.00
Home & Garden Show
Concourse Booth at FARGODOME
event
Feb. 27: 3-9pm Feb. 28:
9am-6pm & Mar 1: 11am-5pm
Concourse Booth……..$425.00 Electrical Costs…...…..$30.00 Labor
Overtime costs
(21 hrs-2 emp.)………$714.00 Total show cost……..$1,169.00
Employee Training CUNA books,
online training, etc.
Upcoming year *This cost will depend on staff re-evaluations.
Estimate ($400/employee) Total Training Est...$2000.00
Total Advertising Cost………. $10,297.20*
*Varies with staff training costs TBD after re-evaluations
D. Benefits to the business from adopting strategies and
recommendations
By implementing these advertising strategies the CU will benefit for years to
come. The television ad will reach the majority of our target market. By offering an
incentive to become a member the ad will appeal to more people, thus bring in more
members than without this incentive. The booth at the Home & Garden Show will also
greatly benefit the credit union by creating awareness and positive exposure to potential
new members who may be reluctant to other advertisements. An insertion in the Fargo
Forum will allow us to focus on the North Fargo area surrounding the credit union.
These potential members will also benefit from the convenient location. Brining in all of
these new members will positively affect the credit union indefinitely. In the future the
number of savings accounts will increase along with loans. The staff training will also
greatly affect Freedom CCU. By having a well trained staff, each employee can be
working at their full potential. The credit union will also be able to offer more services
resulting from the increased skills and knowledge acquired by staff. Another advantage
to training is the spread of work load. For example, if more employees are empowered
to do loans, they can be done more time efficiently.
The short term goal of this proposal is to increase membership by 5%. Once the
membership goal is reached, I am confident that the long term goals of increasing profit
positively encourage word-of-mouth advertising from new and old members who value
the amenities and quality service of Freedom Community Credit Union.
VI – BIBLIOGRAPHY
"American FactFinder: Fargo city, North Dakota." US Census Bureau. 2000. 26 Sept 2008. <http://factfinder.census.gov/servlet/ACSSAFFFacts?_event=Search>.
Hagen, Mary. Personal interview. 27 Oct 2008.
Kiviat, Barbara. "Bad Times for Banks Means Boom Times for Credit Union." TIME 23
Oct 2008 5 Nov 2008.<http://www.time.com/time/business/article/0, 8599,185317 4,00.html>.
“Rate Card.” 2009 Red River Valley Home & Garden Show.” (2009): 2.
“Rate Card.” The Fargo Forum. (2006): 2.
VII – APPENDIX
Advertisement Examples:
Television Ad: Insert these frames at the end of current commercial; take out final frame “Freedom Community Credit Union.”
Newspaper Insert :
2940 University Dr. N. Fargo, ND 58102
(701) 237-4100 www.freedomccu.com
Become a member today and you could win
$1,000 cash!
South High School 1840 South 15th Avenue Fargo, ND 58103 Jason Holland, Advisor
October 7, 2020
Mary Hagen
Freedom Community Credit Union 2940 N University Dr
Fargo, ND 58102
Dear Mary Hagen:
My name is (Name Goes Here), a second-year Marketing Education Program student at Fargo South High School. I am also a member of Fargo South DECA, an association of high school marketing students.
For my Marketing class we have been asked to create a market research project. For the research project we need to compile information about a business’s typical customer. After compiling the data I will develop a proposal including recommendations to help the business maintain or increase sales and growth in customer satisfaction. The market research project must be based on a local business; I have an interest in basing my research on your credit union. I will be happy to share the written results at the conclusion of the project.
Would you be willing to meet with me so that I can learn more about the business; who your typical customer is, types of advertising, sales promotion strategies, and which of those you have found to be the most or least effective in the past? If it works with your schedule, I would like to meet with you sometime during the next month or so, to get a better idea of how your business works. I am required to do some basic customer surveys; I would need your approval before, and would appreciate any input about the surveys before doing so.
If you agree to serve as a mentor and business partner for my Marketing Research Project, please sign and return the enclosed form to Mr. Holland at South High School. Thank you so much for your consideration! Please call (446-3141) or email Mr. Holland ([email protected]) at South High School if you have any questions. You can also contact me directly by phone (701) ______ or email me at (email goes here). I am really looking forward to working with you on this project!
Sincerely,
Name Goes Here FSH Marketing Student
Permission
Interview Questions
Date: Oct. 27, 2008
1. Is there any existing primary data?
No
2. What types of advertising has worked well in the past?
TV ads, radio – quarterly newsletters
3. What types of promotions/incentives have you used, any currently going on?
Member referral program- gave other member $25.00 for
referring a member
4. What do you think is important to portray about Freedom CCU in advertising?
Our strong personnel- one on one service- low fees & Strong,
member owned CU
5. Who do you think is your typical customer?
Right now the majority of our membership is the guard &
their families
6. Who do you want to target your advertising to?
The community within 75 mile radius of Fargo-Moorhead
7. What do you think would be a good goal for this project: increase or maintain
business?
Increase
8. What kind of impact do you think the current economy will have on your
business?
I think it will help our business grow-people will be looking
for a safe for their money- we need to capitalize on this.
9. What is your perception of the competition? Who is the biggest competition?
I think we can keep up with any bank in town- our biggest
competition is probably state bank- we don’t do business loans.
Do a planning session with staff- brain storm. Open our branch
in South Fargo. Increase membership in 2009 by 5% and
increase loans by $1,000,000.
Freedom Community Credit Union Customer Survey
This survey is given by a Fargo North Marketing student to collect data for a market research paper. It is completely confidential and voluntary. Thank
you for taking the time to take our survey! 1. Gender
a. Male b. Female 2. Age
a. 19 or younger b. 20-30 c. 31-40 d. 41-50 e. 51-60 f. 61-70 g. 71+ 3. Zip Code
a. 58102 b. 58103 c. 58104 d. 58078
e. Other:__________ 4. Household Income
a. $30,000 or less b. $31,000-$45,000 c. $46,000- $55,000 d. $56,000-$68,000 e. $69,000-$80,000 f. $81,000-$92,000 g. $93,000-$110,000 h. $111,000-$125,000 i. $125,000+
5. How did you first learn of the Credit Union? a. Air Guard
b. Relative
c. Word-of-mouth d. TV commercial e. Newspaper Ad
f. Other____________________
6. How long have you been a member?
a. 1 year or less b. 2-7 years c. 8-15 years d. 16-25 years e. 26 years +
7. What is your reason for choosing Freedom CCU over competitors?
a. Service b. Convenience c. Family Influence d. Other______________ 8. Reason for coming in today
a. Loan b. Deposit c. Withdraw d. Transfer
e. Other_______________ 9. Level of Satisfaction with
Service (Rate 1-4, the highest being 4)
a. 1 b. 2 c. 3 d. 4
10. What can we improve? a. Speed of service b. Availability
c. Variety of services d. Other______________
Cable one invoice
