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A Surprise for One CU

"People don't care how much you know until they know how much you care."

Cliché, perhaps, but fitting for the CU philosophy — but only if members know it.

Consider what one CU discovered. This progressive (and still profitable) CU conducted research to test a new product that would maximize member deposit return-yet most likely at a heightened cost of funds. Why, in these financial times, would a CU potentially increase its costs? Said the CU's CEO: "Because if it helps our members' financially-and we can afford it-it's something we should consider."

We presented the concept to members in focus groups. Their reaction surprised us. Members said, "They're obviously doing it to get more of our money," or to "lock us in and hopefully reduce our rates in the future," or "so they can make more money."

Wow! This is a credit union with as much trust and goodwill as any and, still, their motives were questioned. We stepped back. We briefly explained that increasing the cost of funds to the credit union would reduce their margins and most likely lessen their ability to make money. We then reminded the participants that the primary purpose of the credit union was to help the members' financial position and that CUs are not for profit.

The mood changed. The skepticism lifted. Openness prevailed. Product interest grew.

Two lessons emerged. First, if you don't ask, you won't know. We were seeking information on a specific product. We learned about product interest, yes, but so much more-we learned about the member mindset.

The second lesson? The CU's perceived motivation matters. The credit union difference- the "not for profit, not for charity but for service" difference-has been so completely muted by "just like a bank, but better" messaging that similar bank skepticism has permeated the CU movement. How clearly is your CU communicating, being guided by, talking about, and living to the service mission?

Neil Goldman is Senior Partner with Member Research. He can be reached at (310) 643-5910 or ngoldman@memberresearch.com.

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