The below was forwarded to NAAIO offices by NAAIO member Meta Payment Systems.
MasterCard implemented an Acquirer Cross-boarder Transaction Assessment effective January 1, 2008. U.S. acquirers will pay an assessment of 40 basis points on all cross-border transactions for non-U.S. region issued MasterCard, Cirrus or Maestro credit or debit cards acquired from US merchants. A credit of 10 basis points will be received when the transaction is submitted to MasterCard in US dollars.
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PR Insight Problem: Downturn In The Market
A solution: Increase public relations!
By Kelly Williams
October 2, 2008
CUES’ Credit Union Management’s online-only “PR Insight” column runs the first Thursday of every month.
When times get tough, all too often companies choose to go into advertising, marketing and public relations hibernation. Likewise, at many credit unions, the initial response to decreased revenues is to cut costs, typically in these three areas, and wait it out until the economy rebounds.
If this is the strategy your credit union has chosen, then it’s time to rethink it.
Stand Out In A Quiet Market
“Think of it this way. If you’re in a room with 20 people and they are all talking, all you hear is noise. But if 19 stop talking, suddenly the one person who’s still talking can be heard loud and clear,” says Jamie Turner, founder of Atlanta-based marketing communications firm Turner Fernandez Turner.
Savvy credit unions recognize a “quiet market” as a tremendous opportunity to secure market share, because the competition usually scales down their marketing efforts. In addition to losing market footing by silencing themselves, the competition must eventually spend more time and money to win back lost market share, assuming that it is not already too late.
Use this time to:
- Update your employees early and often on business decisions to
avoid rumors and poor service levels
- Maintain strong relations with vendors by proactively
approaching them about reducing costs and adding value
- Tell your members what you are doing to maintain service
levels, so they do not become scared or take your silence as
indifference
- Maintain community activities.
During down times, the media are always looking for a spot of good news, and community outreach can generate media coverage and positive sentiment from members.
Cuts Can Be Fatal
Savvy credit unions also know advertising, marketing and public relations cuts have historically proved harmful or even fatal to companies that made them.
“When budgets are tight and fewer members of your target audience are buying what you’re selling, even fewer will buy if you stop marketing to them,” said David Warschawski in a recent article in MEDIAWEEK. “By cutting your marketing spending, you risk compounding your troubles today, and your bottom line will shrink even further tomorrow.”
Warschawski cited a 1979 study conducted by ABP/Meldrum & Fewsmith that tracked the sales history of companies during the 1974-75 recession. The study concluded that “the companies that did not cut their marketing budgets had increased their sales by more than 200 percent two years later, while the sales from companies that cut marketing budgets had barely risen by 50 percent.”
But the risk can be much more costly than slow sales growth. Mervyn’s and S&A Restaurant Corp. (owner of Bennigan’s and Steak & Ale and Tavern Restaurants) both learned the marketing cuts lesson the hard way-each recently filed bankruptcy. According to Advertising Age (“Ad Cutback Backfired for Bankruptcy Victims,” Aug. 4, 2008), Mervyn’s had cut its marketing by more than 25 percent in 2007, and Bennigan’s cut its marketing spending by more than 75 percent.
Invest in Your Success
Larry Light, former global chief marketing officer of McDonald’s, said, “Some companies try to cost-reduce their way out of problems.”
When McDonald’s began experiencing decreased revenues in 2002, Light increased 2003 public relations and marketing spending. Sales increased soon after the new efforts were in place.
What is your credit union’s plan to win in a down market? Where are you making cuts? If you think a temporary marketing cut has no long-term effect on your bottom line, then you might be playing right into the hands of your competitor…you know, the one that is always running those ads and always seems to be in the news.
Kelly Williams is senior vice president of Atlanta-based William Mills Agency, Atlanta, a public relations agency serving the financial services industry. He is responsible for business development and provides strategic account management and support for William Mills’ agency staff and clientele.
