LAS VEGAS-The answer: Borders, Blockbuster, Circuit City, Kodak, Tower Records and travel agents.
The question: name businesses that were big in the year 2000 that are gone or are fighting for survival today.
That Q and A was courtesy of Don Shafer, chairman and co-founder of Austin, Texas-based BancVue. Shafer told attendees of the 35th Annual Directors' Convention there is a simple reason why the products and services at many credit unions do not meet the needs of most younger people-nobody is asking those younger people what they want, yet Credit unions assume they know what to offer.
Shafer played a clip from the 1988 movie "Big," in which Tom Hanks is a 12-year-old boy inside an adult man's body courtesy of a magic wish. Hanks' character, Josh Baskin, goes to work at a toy company, where he is the only one who looks at toys as something to play with rather than an object to be marketed.
In the clip, Baskin cuts through a colleague's report on painstaking research and focus groups by giving his unique perspective in a room full of grown ups-a robot that turns into a building simply is not "fun."
Shafer further drove his point home by having the entire audience stand up, then progressively sit down if they were over 90 years of age, over 80, and so forth, until a mere handful of attendees under 40 were still standing.
"Why are credit unions not getting enough young people? Just look at this meeting," Shafer said. "Only 20 people out of 1,000 in this room are under 40 years old. Credit unions need to add high school or college kids to sit in on their marketing meetings. If they do that, they will be so much smarter one year from now."
'Convenient' Definition Has Changed
Convenience has always been a driver of how a consumer chooses a financial institution. Shafer said this formerly meant the FI having a branch near where someone lives or works, but "The definition of 'convenient' has changed."
"There is a different way of doing business at the credit union, because the location is not as important today," he asserted. "Now credit unions need to be opening accounts entirely online. Even the 55-and-older crowd prefers online banking."
One obstacle CUs face in meeting this new standard is websites that are seen as "dinosaurs" by younger people, which Shafer said is costing credit unions potential members. Building on his earlier advice to add younger people to advisory positions, he said CUs need to create the position of a "virtual branch manager." This employee, preferably younger and in tune with modern Web design and layout, would be in charge of making certain the website is up to date, accessible and eye-pleasing.
"Make the website a priority," he counseled. "The website needs to be badass. That means 'good' today."
Other "nuggets" from Shafer regarding Internet best practices included: make e-marketing awesome, engage in mobile banking, offer personal finance manager programs, and be aware Google grades websites based on updates and new material.
"Before choosing a financial product people do research on the Internet," he noted. "Credit unions need to be able to 'win' at Google, meaning show up well in searches, and know how to be part of pay-per-click ads."
He also advised making one person at the CU in charge of Facebook, Twitter and LinkedIn, adding, "I don't know the ROI, but to be able to compete credit unions have to do this."
Money is power, Shafer declared, and money in a local community is powerful. He said if credit unions go out of business money will go out of local communities, so it is important to keep credit unions strong.
"Here is another nugget: market a product first because people are looking for products," he said. "Market electronically, and don't be afraid to team up with competitors."
To illustrate the latter point, Shafer noted Bank of America, Chase and Wells Fargo have teamed up on ClearXchange, which enables P2P (person-to-person) payments. He said the three biggest banks in the country realize people get mad and might want to leave, and they make it easy as long as the departing customer goes to one of the other biggest banks.
"Community banks are not the enemy, Wells Fargo and Bank of America are," he said. "Credit unions need to collaborate to survive because there are companies that did not exist in 2000 that are chipping away at their business. Look at Isis mobile wallet, ClearXchange and the potential for Facebook to offer banking. TXVia prepaid was bought by Google, and analysts estimate Apple iWallet has the potential for 37 million customers on its first day."