Finally, there's a warm wind blowing at the collective backs of credit unions. Nationally, more jobs are being found than lost. Home prices are rising. Foreclosures are falling. As a country, we're starting the day off with more good news than bad on the radio for a change.
But credit unions are experiencing something even more profound. More than ever people are seeing CUs as a viable alternative to their traditional banking habits. Attitudes are changing and new accounts are being opened. Loans are getting written. In general it's a thrilling time to see an industry earning its due respect and experiencing such a remarkable up swell of business.
But in spite of all the good being enjoyed, I'm troubled. I'm seeing an abundance of advertising and marketing tactics by credit unions from around the country that threaten to darken the shared good will the country is bestowing upon the industry.
A number of credit unions are attempting to build their brands and market their products on the backs of the banks' soured reputations. I understand the hubris. But here is why I think this is a risky business strategy, not only for the individual CU, but also for the industry in the long term.
The First Thing
First, don't build a brand on your competitor's weaknesses.
I've been in many a brainstorming session where we fantasized and feasted on the potential of crafting our client's advertising campaign around concepts that fully danced on the competitor's soft white underbelly. We would roll through myriad "what if..." scenarios that built the campaign on the competition's weaknesses.
It's tempting fruit, for sure. But we always turned away from those temptations for one very good reason: When you create advertising that's centered on a competitor's shortcomings, what you are not doing is not talking about your brand's compelling features and strengths, and why your products are better for the consumer. If all you've got is your competition's bruised reputation to hoist up the flagpole, what's that saying about your organization?
My first rule of thumb is to always take the high road and speak to a client's strengths. If your agency comes to you with side-splitting assault ads, send them back to the creative cave and tell them to do their job of putting your credit union on the pedestal it deserves.
The Second Thing
Second, the low road is an abrupt dead-end. So, let's say you've given in to temptation and your advertising strategy is to go all in bashing the big banks. Your ads are funny and the banks are made to look the fool on every level. How sustainable is that strategy? Sure, there's plenty of low hanging "bad bank" fruit to pluck and design your creative around. But like fart jokes, the jabs quickly lose their giggle factor and simply become trite. And you're left with a bunch of expensive gag ads that position your brand as mean spirited.
The research shows that consumers turn away from attack ads, even funny ones. They can leave your credit union looking petty at best. And after all is said and done, all that money and time are gone and nothing positive or relevant has been promoted about your brand or its products to your members or potential members.
The Final Thing
Finally, why pick a localized fight that can potentially damage the entire industry?
Let's be honest. Banks won't roll over while credit unions peck away at their customer bases. Nor will they suffer repeated whacks to their reputation. No way. Banks are marketing machines. They're well-oiled and quite well-versed-and comfortable-carrying out aggressive marketing tactics. They've been doing it for a long time against each other. I'm not sure that's a war credit unions want to wage (or finance), particularly when the overall strategic goal should be to build membership and grow loans by positioning the credit union as a legitimate alternative to the typical financial institution.
Of even greater concern should be what happens in the legislative arena. What's to stop the American Bankers Association from pushing hard to overturn the credit union tax-exempt status? And whether the ABA is behind the challenge issued in Oregon is immaterial. The fact is Oregon won't be an isolated case, I'm afraid. I'm not saying that the ABA won't pursue this path anyway, as they respond to the competitive threat posed by the credit unions' growing popularity. But there is nothing to be gained by antagonizing a well-heeled, profit-focused Goliath through low road, short-term advertising agendas, whether it's from one credit union or the entire movement.
A Grand Opportunity
This is a grand time for credit unions. It's a time that would have been hard to imagine 10 years ago. And while, a lot of the springboard effect has come because the major financial institutions played fast and loose with their fiduciary responsibility. But with this credit union uplift comes a responsibility to be fair-minded competitors with all your peers, including banks.
Spending the money and building the brand on credit union strengths, individually and collectively, will sow rewards that will be much richer and longer lasting.
Greg Fine is a principal of Ding Communications, Inc., an advertising agency. For info: DingThinking.com or firstname.lastname@example.org.