Episode 85 - It is 2025: How are Banks and Credit Unions STILL Underspending on their Websites


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Join Meredith Olmstead, CEO of FI GROW Solutions, and Danielle Fancher, Sales Director, as they delve into the critical topic of budget allocation for credit union and bank websites. In this episode, they address the persistent issue of underfunding digital assets and advocate for recognizing websites as essential operational tools, not just marketing expenses. They share insights on the real value of investing in a robust digital presence to enhance user experience and meet the demands of today's digital-first customers.
Key Takeaways:
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Recognizing Websites as Operational Necessities: Websites should be considered crucial operational tools that facilitate daily banking and information dissemination, rather than mere marketing expenses. Proper funding should reflect their central role in a financial institution's operations.
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Comparing Costs with Physical Branches: The investment in a high-functioning website is minimal compared to the cost of building and maintaining physical branches, yet the digital platform often serves a significantly larger audience.
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Importance of Proper Investment in Digital Assets: Underfunding a website can lead to poor user experiences and potential loss of customers, especially among younger demographics who prioritize efficient online interactions. Investing adequately in digital assets is not only necessary for maintaining competitiveness but also for future scalability and integration.
Transcription:
Meredith Olmstead:
Hi there. I'm Meredith Olmstead, CEO and Founder of FI GROW Solutions. We are a digital marketing and sales, and lending support agency. We work exclusively with credit unions and banks. And I am here with our Sales Director, Danielle Fancher. Say, hi, Danielle.
Danielle Fancher:
Hello.
Meredith Olmstead:
So Danielle and I were just having a conversation about website projects. We have a couple of website projects slated to kick off in early 2025, so I think that's now.
Danielle Fancher:
Yeah.
Meredith Olmstead:
But we're making this a little... before the end of the year in 2024, and we were getting a little worked up about conversations that we keep having again and again with credit unions and banks about budgets for websites. And I just wrote down on our podcast topic list, "How in the world are credit unions and banks still underspending on websites? It's 2025." And so Danielle and I started chatting about it, and she was like, "Well, let's just hit record and talk about it because it can be a frustrating topic and something that is just a huge mystery to me as to how priorities haven't shifted." So, Danielle, do you want to tell the story about a recent lead we had a really great conversation with, and then we found out what their budget was, and describe the size of the institution and what they were looking for?
Danielle Fancher:
Yeah. So we were chatting with a credit union, and this is a fairly large credit union, especially in the credit union space. $700 million in assets is a pretty good size credit union. And we were having conversations with them and going back and forth, and it got brought up that their budget for a new website, right, that brings in all of the traffic for their credit union probably as a whole, their budget was $50,000.
Meredith Olmstead:
Yeah, that.
Danielle Fancher:
So, in fact, that was the max.
Meredith Olmstead:
She said she would be fighting to get... She said she would be fighting for $50,000.
Danielle Fancher:
Yeah.
Meredith Olmstead:
We ended the conversation because we didn't really want to waste her time, we didn't want to waste our time, and I sent her a bunch of resources around adjusting priorities internally around budgets, but I just have to say a couple things right off the bat. I mean, I was like jaw-dropped. We work with institutions a fraction of that size who are spending three and four times that amount on websites. $150,000 is pretty normal at this day and age to get a really solid, fully functioning website, and that's not just our bills. I have asked... I serve on MAC's board. I've asked multiple board members, and attendees, and other marketers how much they're spending on their high-quality websites. All in that neighborhood, somewhere between 150. The larger institutions, pushing 200, 250 even.
So those are the budgets that we're talking about. Our budgets are on our website even. We don't hide the cost because it's so much work. It is a big investment, but there is a huge value there. So the first thing that I always like to say to people when they push back on budget is, "Why is this just a marketing expense?" Okay? It is a digital asset. We're not talking about... If you're going to build a brick and mortar branch somewhere, it's not a marketing expense, it's operations.
Danielle Fancher:
Right.
Meredith Olmstead:
So is your website. I mean, come on. You have almost all of your traffic going through your website nowadays to do, A, daily banking with you, to find more information about products and services. So it's crazy that it's all line items into marketing expenses. So first thing we tell people is get the right people at your institution involved in these conversations so you can get the right budget, okay, because-
Danielle Fancher:
Yep.
Meredith Olmstead:
It doesn't really need to all come out of the marketing budget. It should be coming out of operations, retail, lending. I mean, it's a retail branch. Really, your digital branch is a retail branch, so there should be some additional funds there. So that's the first thing. The second thing is the cost of a brick and mortar. So let's talk about that for a second.
Danielle Fancher:
Yeah. So the average cost to build a brick-and-mortar branch is $1.9 million, and so-
Meredith Olmstead:
And that's obviously a range. I think that's the median cost, and that could include purchasing land, building from the ground up, or... So, obviously, there's going to be a range, but you're well over a million dollars to get in the door and open a branch. Probably closer to $2 million, so absolutely.
Danielle Fancher:
Right.
Meredith Olmstead:
And so then, we have these brick and mortars that have tens of people coming to them a day, and then you have your online branch that's serving hundreds of times the same traffic that comes into a brick and mortar.
Danielle Fancher:
Yeah.
Meredith Olmstead:
So it's really a mystery to me as to how people continue to justify the spending on in-person branches, staffing them, operations, furniture, everything, and nickel-and-diming the digital.
Danielle Fancher:
Yeah. Well, and to that point, just like what you said, Meredith, we are putting all... our banks and credit unions are putting all of these resources into staffing brick and mortar. When I was a branch manager, I had 19 employees that were in my branch, and there were many of days and weeks where we are twiddling our thumbs like, "When is someone going to walk in the door? When is someone going to walk in the door?"
Meredith Olmstead:
Yeah.
Danielle Fancher:
And then to that point, for your website, who is handling all of those leads like, "Oh, yeah, we'll give it one employee," when all of your loan applications and online applications are coming right in through your website. So it is crazy to think-
Meredith Olmstead:
Yeah. Yeah. There's no dedicated staff a lot of times behind the scenes to your websites. There's no HR budgets. They don't come with the training support and ongoing staffing issues. I mean, it's almost like I... We've almost started to tell people, "Look, you're running a marketing department or a sales department, but bring lending in there together. Actually, bring a couple of lenders into your marketing team because otherwise, you just can't get the support from the staff that's in a branch or somewhere else. These people need to be dedicated to the digital space." So I pulled a couple of quick statistics.
Now, we're making this in early December 2024. We're recording. So I pulled stats for the last seven days, which was Thanksgiving week. Okay? Nobody was going to branches. Branches were closed a lot of the time. Everybody is doing Black Friday. There's not a lot of traffic going on because people are at home with the holidays. Okay?
This institution that I pulled is a $400 million institution with 41,000 members. In the last seven days, which is over the holiday, the Thanksgiving holiday, they had almost 9,000, a little under 9,000 unique visitors or sessions just in seven days to their website. And I'm not even going to get into where they were going on the website, what were they searching for, how many new contacts came in, but all of that was happening. Leads were actually coming in and converting on their website while their branches were closed.
Now, you couldn't add up and then multiply by 10 the number of branch visitors in that same week period at all of their brick and mortar locations and get anywhere near 8,900. So that is where I really... We have to push back and say, "You can't underspend on this resource. You can't underspend on this digital asset." People, most of the time, new customers or new potential members, are often going to your website before they even pick up the phone or contact your institution in any way to learn about doing business with you. So if it's poorly designed, they are having a bad experience, and they're heading to a different institution.
Danielle Fancher:
Right.
Meredith Olmstead:
And specifically, we have... You and I just did this presentation a couple of weeks ago where we talked about how to captivate and convert younger members or younger customers. Well, guess what? If you want millennials and Gen Z, but you want to nickel-and-dime and go for a half-ass website solution, you're not getting them.
Danielle Fancher:
Yeah.
Meredith Olmstead:
They will immediately bounce. They'll go straight to the next institution that loads faster, that has a better online experience, that has an online application, that they don't have to walk into a door for, that they can chat with, that they can self-serve. So it really is crazy to underprioritize these digital assets.
Danielle Fancher:
It is, and I can't tell you how many lending and marketing conferences I've been to this last year where it's every single credit union and bank's strategic goal to lower their average age of membership.
Meredith Olmstead:
Yeah.
Danielle Fancher:
Every single one of them in every state that I've been to, and I'm like, "Oh, okay. Well, how much are you investing in your website?" "A website?" And it's like, "Think about the user experience. I'm a millennial, and if I don't have a good website user experience, I'll just go somewhere else."
Meredith Olmstead:
Yeah.
Danielle Fancher:
And so it's so important.
Meredith Olmstead:
And people don't understand too when you underspend on something like a website, people think, "Oh, well, you know what? It'll be good enough, and I'll go middle of the road or whatever." But what ends up happening is that it dings you onto the trust with people who are coming to your brand. They go in, they start searching around. It doesn't feel like it's moving, they're moving through content well enough. It's not what... They might search something and not find what they're looking for, or your menu is all over the place, or sporadic, or haphazardly designed, information is buried three and four clicks into an old, dated website, and they're like, "I can't find what I'm looking for. I'm out." They don't want to spend money with an institution like that that they can't trust. And what about redevelopment, Danielle? That's a big one about how often you redo your website.
Danielle Fancher:
Oh, yeah. For sure. So with our websites, we are... They're so user-friendly and so easy to use that it's so nice that a lot of our clients will come to us on a yearly basis and they want to refresh things. And it's super easy for us to be able to just go in and refresh content, update things, make them look like a completely different website, still with the same website that we created last year or three years ago.
Meredith Olmstead:
Absolutely. Yeah.
Super easy to move stuff around, very easy to make changes in the back-end, even if you're not technically a developer. But what happens is if you underspend and you have a less easy or a less accessible kind of content management system, you end up having a shorter shelf life for your website. So instead of being able to make changes and be agile, immediately, after a year or two, you'll have a team that come in and say, "You know what? I think we need a new website already."
And the website, one of the websites we launched this year, they had literally just gotten a new website a year and a half before that. They were so upset with the quality, so upset with the performance, with the lack of flexibility of the design that they went ahead and paid to get out of their contract with that vendor and paid quite a bit more to have a new website done within a year and a half, two years. So it's crazy. You might think that the investment is too high, but if you amortize that over a three to five-year period, which is the typical shelf life of our websites or a good website, it's worth every penny if not more.
Danielle Fancher:
Yeah. Well, Meredith, how many clients do we get who did a website with another vendor because it was a lower cost that end up coming back to us, and it's like-
Meredith Olmstead:
It happens. It definitely happens.
Danielle Fancher:
Yeah. It's crazy.
Meredith Olmstead:
The worst is when you have somebody say they're going to go with somebody else, and then you're like, "Okay. Good luck. Let's see how it goes." And then you go, and you look at their website 6, or 8, or 10 months, or a year later and nothing has happened. Either the project is way behind, they're still dragging to try to get things finished. They ended up just saying, "Okay. Nevermind. We're not going to do anything at all and just leave it status quo." It's like no decision is the better course rather than making a hard decision. Sometimes it's really just about empowering people to take risks and also to... you know?
Danielle Fancher:
True.
Meredith Olmstead:
Make these decisions in their areas of expertise. So when we're talking with people about what makes a website worth a larger investment, the key is to know what is included, right? You want to make sure that you're not just getting blank pages from your partner, your developer, that you then have to spend hours upon hours writing all the content. For sure, we always are very, very clear about what number of pages we deliver ready for launch, and those pages take us four or five hours each.
Danielle Fancher:
Yeah.
Meredith Olmstead:
I mean, you're talking full-time, weeks' worth of work going into 50, 60, 70 pages ready for launch. And if you didn't have somebody, a partner who was doing that for you, you'd have to write it all. So you'd get these templates, and they'd say, "Oh, here you go. Here's your website." And then the internal team, obviously, usually, the marketing team has to spend nights and weekends for the next two months writing website content. Not what you want happening.
Danielle Fancher:
Yeah. It's very much like... I always think about it like a core conversion. There's so many teams that are involved in a core conversion, right? And a lot of times, on a new website, I don't think that sometimes the full executive team understands that it's design and development.
Meredith Olmstead:
Yeah, yeah.
Danielle Fancher:
You think of a new website, and you think someone just coming in and developing a new website. No. With a lot of these companies, they are just developing the new website. But I think that's one thing that I really like about us, and that makes us so different, is we're doing all of the design and SEO content as well.
Meredith Olmstead:
Yeah.
Danielle Fancher:
And our experiences in banking and in credit unions, and so that's our field of expertise. So I do think that's really interesting.
Meredith Olmstead:
Yeah. The other things you want to make sure that you're going to be getting pretty much out of a box with a great content management solution is you want to be able to personalize experiences based on known characteristics maybe like of an account. Do they have a certain account? Have they been on a certain page on your website? Have they opened a certain email? Have they clicked on a link somewhere? All these different things and personal information you might know from somebody that's cookie because of their IP or they've logged in and converted.
So all of those things, you want to be able to personalize the experience and the content right on the page on your website or when they're on their smart device. You want to make sure that you can capture leads and that those leads can go somewhere easily. That should be built into your system.
We like to set up automated follow-ups pretty much right out of the gate for people if they're converting on starting an application or if they're a known customer or member and they're visiting a high-priority page. That's really great for behavior-based automation. So that's great if that's connected with your content management system. Anything else you can think about, you can think of for functionality that you want to make sure is included?
Danielle Fancher:
I just like to always talk about the smart content, which is something that you just said, because it is an entire process and an experience. If I'm on your website and I'm specifically clicking on auto loans, the next time I come to the website, you should be marketing auto loans to me.
Meredith Olmstead:
Yeah.
Danielle Fancher:
And that's what I really like about a lot of the websites that... Actually, all of the websites that we do has that smart content, and then we're able to capture that data, like you said, and get them to exactly where they need to be.
Meredith Olmstead:
Yeah.
Danielle Fancher:
And so I think that that's extremely important too whenever you're trying to cater to younger generations like what we're talking about previously. We want customized, personalized experiences, and so-
Meredith Olmstead:
Yeah.
Danielle Fancher:
Yes.
Meredith Olmstead:
Yeah, and we're willing to tell you information about ourselves in order to get more of what we're looking for when we're looking for it. It's important that we understand that times have changed, consumer behavior has changed. While yes, privacy is important, and of course, it's always important, especially when it comes to banking, people do want to see the information that's more relevant to them in terms of their life circumstance, what they've shown interest in, products or services that they may be most interested in next.
Danielle Fancher:
Right.
Meredith Olmstead:
So those are things that you want to make sure you could incorporate into whatever website hosting and content management system you're using. And then just making sure that it's a scalable design for future growth. So, yes, when you launch a new website, you might only have three checking accounts, or two credit card options, or any of these different kinds of suites of products. But remember, there may come a time not too far in the future where that goes from three to six, or four to five, or five to two. So you want to make sure that you can... that that scalability for your website is easy to change, to update, and to modify based on new products and services or as you grow. Maybe you merge with another institution. You want to make sure that you can incorporate all of those different kinds of things into any website design that you're paying a lot for.
And when I say a lot, I mean, what the value is. I mean, honestly, $150,000 for a website that is hundreds of times the traffic of any of your brick and mortar, that, to me, is a bargain. The larger institutions out there, Bank of America, Navy Federal, they're spending tens of millions of dollars on their digital apps and their websites every year. Every year, every year. That's who banks and credit unions of all sizes are competing against, and so I think it's just important that we stay realistic and adjust priorities.
So, awesome. Well, thanks, Danielle. That was a good conversation. I appreciate you spending a little bit of time with us. So if you want to learn more about websites for your bank or credit union, please visit us at figrow.com. We also have lots of other great information, case studies, blogs, other podcasts. So we'd love for you to come and check out our information. Otherwise, let's just get out there and make it happen.
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