For years credit unions have tended to present themselves as the “nice guys” of financial services. An “aw shucks” tone and manner, promising membership as a more pleasant state than “customership;” talking about how member deposits stay and work in the community, and providing patronage for community events and charities.
All good stuff, and with the increasing demise of community banks, there is a void in the market. Communities need a friend in financial services. The problem is that doesn’t necessarily turn into membership. Your prospects can like you for what you stand for, but not feel you’re right for them. Being community-centric is nice, but maybe not enough.
What to do? Here are five relatively easy, and very low cost actions to consider:
- If you haven’t created a brand positioning statement, do it. It’s a crucial part of effective acquisition marketing. And, use an outsider to moderate and mediate its development. A properly developed positioning statement requires the organization to grapple with defining the target, and the brand’s points of difference which, rest assured, will be more tangible, than being nice guys.
- Become your members’ primary financial institution. Research shows over half of U.S. adults use more than one financial institution. But it also shows higher retention rates when you are the primary bank. How do you find that out? Simply ask, especially when on boarding a member. Another way is to assume. Always assume there is another institution in the mix and look for ways to become the primary. Or you can data dive: conduct member research, or/or look at product usage. If your member’s product portfolio is limited, it’s likely there are more than two of you in the relationship.
- Auto pay is a great retention tool. The more you can get members to create Auto Pay accounts, the less likely they are to switch. It’s too much work.
- Indirect lending is already common across CU’s but promote the programs, and work them. Make it more than a service, make it a brand. 30 – 45% of a portfolio in indirect lending isn’t unusual, depending on your risk tolerance.
- Commercial and business services are a huge opportunity. And, honestly where community mindedness works really well – you are in the service area of your best business prospects. Consider sub-branding your commercial services rather than making it just a “department” or a function. Banks have done a better job in this category, so important incremental gains are available to credit unions.
Credit Unions are getting traction and you can see the momentum in membership and asset gains. We would argue that most of these gains weren’t due to warm and fuzzy communications, or sponsorship of the local chess club. They are coming from hard edged, rational transactional comparisons of savings and borrowing rates, lower fees, and local decision making.
Community banks, thrifts, small banks are going the way of the dodo bird, and credit unions are on the rise. No need to be apologetic or coy in communications where clear brand positioning and a dose of self-confident marketing communications will do the job a dose of self assurance and a clear positioning will do the job.