The Hidden Costs of Account Growth – and How to Lower Them

By Jennifer Simmons, VP of National Alliances, ADVANTAGE

Acquiring a new member for checking account services can cost upwards of $500 to $800 – or more. With increasing pressure from digital-only competitors and surging marketing costs, how can credit unions compete without breaking the bank?

Why It’s More Expensive Than Ever to Acquire New Accounts

Most financial institutions are increasingly shifting their marketing efforts online, and digital advertising costs have skyrocketed. Google and social media platforms now demand more expertise and budget due to intensified keyword competition. Reaching the same audience as a few years ago now costs significantly more.

With 85% of new consumers beginning their search online, a strong digital presence is essential. Maintaining visibility has become increasingly complex as larger institutions with deep pockets dominate paid search and social channels.

Factors Driving Up Acquisition Costs

• Higher ad costs: Cost-per-click (CPC) across Google and social platforms continues to grow due to increased competition.
• Big bank budgets: Large national banks invest more annually in marketing, outpacing smaller institutions.
• Digital-only disruption: Neobanks like Chime and Varo attract consumers with fee-free accounts and seamless digital experiences.
• Demand for convenience: While local branches still matter, today’s consumers expect an easy, online account-opening process.
• Compliance hurdles: Stricter Know Your Customer (KYC) and fraud controls demand additional technology and manual review, making the onboarding process more complex and costly.

Four Tips to Lower Acquisition Costs

To stay competitive, credit unions must focus on what matters most: reaching the right prospects, simplifying onboarding, and building lasting relationships.

A smarter strategy lowers acquisition costs and drives long-term profitability.

1. Optimize Digital Marketing Efficiency

A well-executed digital strategy helps your budget work smarter – not harder. Geo-targeting, ZIP code segmentation, and location-based ads can help expand beyond the branch footprint to tap into high-growth areas. Organic tactics like SEO and content marketing can drive high-intent traffic more cost-effectively than paid ads.

Email automation and retargeting campaigns can re-engage those who showed interest but didn’t immediately open an account, keeping them within the conversion funnel.

Pro Tip: Persona-based marketing helps tailor your message to ideal prospects, improving engagement and conversion rates.

2. Streamline the Account Opening Experience

A smooth onboarding process reduces drop-offs and boosts account openings. Digital tools that simplify applications, provide instant approvals, and support mobile-friendly funding options (such as ACH, mobile check deposit, and debit card) enhance convenience and accelerate conversions.

3. Promote Value Over One-Time Incentives

While cash bonuses can attract new accounts, they rarely result in long-term relationships. Instead of relying on short-term offers, credit unions should emphasize personalized service, financial wellness tools, and long-term benefits that resonate with today’s consumers.

Pro Tip: Highlight features like higher savings rates, cashback debit rewards, and overdraft protection to encourage ongoing engagement. Promoting direct deposit adoption further strengthens relationships and increases the likelihood of becoming a member’s Primary Financial Institution (PFI).

4. Build Loyalty from Day One

Acquiring new members is just the beginning – long-term profitability depends on keeping them engaged. Personalized onboarding journeys that introduce new members to key services, such as mobile banking, P2P payments, and e-statements, enhance the experience from day one.

Cross-selling complementary products like savings accounts, credit cards, and loans builds trust and deepens the relationship. Behavioral insights can also help identify early signs of disengagement, allowing for timely, proactive outreach before the member considers leaving.

Achieving Growth Through Smarter Strategies

National banks and digital-first institutions are competing fiercely. To compete – and win – credit unions must zero in on efficiency, engagement, and long-term value. If your credit union is focused on sustainable growth, find out how to lower acquisition costs through data-driven marketing, seamless onboarding solutions, and retention-focused strategies.

Ready to grow smarter? Connect with ADVANTAGE to explore solutions tailored to your credit union’s goals.