Archive | CDFI Business Development RSS feed for this section

Is ‘Marketing’ A Bad Word to CDFIs?

15 Apr

As I’ve been out and about talking with more and more CDFIs lately, I’ve noticed something interesting: varied reactions to the word ‘marketing.’ It seems that for at least some CDFIs, the term ‘marketing’ either:

  1. Doesn’t seem [to them] to accurately describe their activities for finding new capital and new borrowers
  2. Doesn’t seem like a concept they want to be associated with

I thought it would be interesting to explore both of these–and I hope you’ll jump in by adding your own comments and thoughts to the discussion!

Does ‘Marketing’ Accurately Describe The Activities CDFIs Do?

When most people  think of ‘marketing,’ they think of advertisements. And while many CDFI banks and credit unions may run advertisements in the media, for many CDFIs, advertising is only a very small part of their business. Really, the term ‘marketing’ is quite broad and can indeed be used to summarily describe many of the activities that CDFIs do find themselves doing, such as:

  • Development and fundraising
  • Sourcing deposits (for bank and credit union CDFIs)
  • Finding borrowers to loan to
  • Improving the borrower experience
  • Borrower communications and updates
  • Creating referral partnerships with centers of influence
  • Attending local, regional or industry trade shows, events and conferences
  • Government relations and lobbying
  • Recruiting staff members

With this in mind, I’d like to suggest that we define ‘marketing’ for CDFIs much in the same way that the American Marketing Association has defined marketing in general:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

For CDFIs, this means ‘marketing’ is any activity in which you must convey your message in order to develop the relationships needed to achieve your mission.

Our Take:  Marketing is Not One Person’s Job

Some CDFIs may have a staff member whose job title involves ‘marketing.’  In these cases, this person–or small team–is in charge of creating marketing materials, running advertising, managing the website, setting up booths at trade shows, etc. But when we really look closely at the bullet list above of marketing-related activities, we see that ‘marketing’ is not just one person’s job–everybody at the CDFI is involved with marketing. Here are a few examples:

  • The loan officer is doing ‘marketing’ when he is preparing the documents for the closing table
  • The development leader is doing ‘marketing’ when she is meeting with potential funders
  • The head of HR is doing ‘marketing’ when she’s meeting with a potential candidate
  • The government relations leader is doing ‘marketing’ when he meets with local politicians to lobby for more funding for affordable housing

In short, marketing is the responsibility of everyone at the CDFI.

Is ‘Marketing’ A Concept CDFIs Don’t Want to be Associated With?

Marketing sometimes gets a bad rap–many people consider ‘marketing’ to be the fluffy, soft and often manipulative side of business. Some think marketing is an optional nice-to-have when there’s extra budget. Some think it’s “that thing the creative folks do,” to “make things pretty.” Others think it’s disconnected from and inferior to the “real business” we’re in–making loans. And unfortunately some think marketing is about the evil manipulation of convincing people they need something they really don’t.

But as we’ve seen above, marketing exists in everything we do as CDFIs. And marketing doesn’t need to be evil, manipulative or fluffy–in fact, in most cases its none of those things.

‘Marketing’ at your CDFI is about telling your story–that thing you’re so personally passionate about!–to the world so that they join your cause. It’s about opening their eyes to social and economic issues they may not realize, and inspiring them to take action. It’s about communicating to them how you can work together to create a win-win situation–whether they’re a bank seeking CRA credits, a foundation seeking outcomes or a borrower following her dream to start a business.

Our Take:  Being Excellent Marketers is a Reputation CDFIs Should Aspire to

Marketing is about us sharing our passion for what we do, and enrolling others to help us. It’s about being an amazing, captivating storyteller that inspires others to take action. This is a fantastic reputation to strive for and aspire to. I would love to see future MBA students studying CDFI marketing case studies, mesmerized by how captivating CDFIs can be in their marketing.

Conclusion: Marketing is NOT a Bad Word for CDFIs!

Not only is ‘marketing’ NOT a bad word for CDFIs, we believe it should become a positive concept and word to CDFIs! If anything, ‘marketing’ is a misunderstood word in many cases. But when you consider all of the mission-critical activities CDFIs do that truly are marketing-related, it’s easy to see that collectively increasing our industry’s expertise in marketing could really propel CDFIs toward achieving our missions.