A recent engagement for a large employer-based credit union gave us a vivid reminder of why credit unions are so well-positioned to outperform the competition in difficult times. Our client had done exceptionally well in signing up employees of the multinational company it serves, but senior management sought our help in devising a strategy to better reach family members and retirees in its field of membership.
Analyzing the CU's account balance and transaction data revealed valuable insights about how its particular members used-and failed to use-what it has available. We were able to give our client some solid tactical advice on how it could land more business from the members it already has. But most refreshing was what we learned from in-depth, one-on-one conversations with members and potential members. We talked with a couple dozen individually, for about an hour each. We interviewed young adults, middle-aged workers, stay-at-home spouses, and retirees. Some were heavy users of the CU, some had just one product, and others had not yet joined. Although the sample was small, we could validate the results against the CU's whole database by examining its demographics, mapping where its members lived and running the numbers on how they actually used CU services. About half the interviews were conducted right before the economy's October surprise and the rest about a month afterward.
The bottom line was a reaffirmation of what many of us in the business take for granted but seem to forget when we actually develop and implement marketing and communications plans. What we learned from the members and potential members of this CU is likely to be true of ordinary people across the country: they want banking services that are easy from an institution that treats them like family. And that is precisely the brand promise all credit unions can make, or at least what it should be.
For the members we interviewed, "easy" seems to have two components. The first we call "rational easy" or "transactional easy." Even though our client provides a fine branch experience, members would much rather deal with the credit union over the Internet, by phone or through an ATM, and, for that, our client does technology very well. "Rational easy" means enabling members to complete their transactions as quickly, conveniently and easily as possible. "Rational easy" has to be a given.
But consumers also want their banking to be "emotionally easy," and that is where credit unions can win. People don't want to worry about the safety of their money, they don't want to be treated like a number, they want a personal touch. They want a banker who knows their name, who will take the time to explain things, help them with paperwork and resolve problems. They've learned to police the statements they get from their cell phone carrier and their credit card company, who are always thinking up new ways to nickel and dime them. They want a banker they can trust not to do that.
And most interesting of all, when given a forced choice between the two forms of "easy" they opted for the second. While visiting a branch was something they would rather not do, it was critical to their choice of a PFI. And while they want good rates, they value both kinds of "easy" even more.
The good news for our client was that, without exception, the members we talked with agreed that it generally excelled at "easy." Less encouraging was that non-members didn't know what they were missing. What members and non-members both knew, however, is that this CU treats its members like "family." It will go the extra mile, really look out for their interests and deal with them fairly. In large part, that perception resulted from the credit union's close relationship with a sponsor that is highly regarded as both an excellent employer and a pillar of the communities where it operates.
But the real point of this column is that consumers have to be given a credible reason to believe the CU brand promise. Existing members believe it after they have experienced it. The trick comes in attracting new ones. In our client's case, it was the relationship with a sponsor that treats employees like family that made its brand promise believable. Why should non-members believe yours?
The growth rate of credit union membership in the U.S. over the last decade is an embarrassment. It has barely kept up with population growth. Notwithstanding all the survey data demonstrating that when people try us, they like us, we've failed to attract the new members we should be gaining.
I suggest that's because it's not enough to give people the pitch that credit unions are better than banks, more deserving of their trust, more personal and willing to go the extra mile. We have to give them a reason to believe us. And that reason is that our members own us. Like every business, we're out to make profits for our owners. We pay it to them with better rates, lower fees and banking that is easy. Let's not be shy any more about trumpeting this fundamental fact. We can be trusted to make banking easy, because our members have a special bond with us. We are truly a family-owned business, and that family is the membership we serve.
Ralph Swoboda is a principal in The ProCon Group, LLC, which specializes in helping credit unions uncover strategic opportunities, build more effective board governance and strengthen their leadership teams.