Are You Advertising Your Security, or Proving it?

Its no secret that credit unions aren't often in the media spotlight. So, like most other credit union folks out there, I've been really excited to see so much positive press coming out about credit unions.

I recently attended the 2008 Partnership Symposium in Fishers, Indiana. During the Idea eXchange section of the conference we discussed pretty heavily what credit unions should be doing during this financial crisis.

What should credit unions be saying to take advantage of the situation, and take advantage of all the positive press that has been given to credit unions.

My suggestion? Say nothing.

I know that sounds counter-intuitive, but hear me out.

You can say whatever you want. That doesn't mean its true.

Even the giant banks that are seeing most of this financial mess are saying "hey we're cool, everything's cool, we're safe and sound! Seriously, trust us."

Every single bank out there, including those that have recently failed, have touted the security and financial soundness of their institution. Many of those claims have been proven false.

Add this to an existing lack of trust in financial institutions...

and you get a large population of America who just had their skepticism proven. People are tuning out the feel-good, "don't worry, we're safe, trust us!" messages more than ever.

It doesn't matter what you say as a financial institution right now, it will be met with a large dose of skepticism.

It doesn't matter that you are a credit union putting out reassurances and not a bank because...

People don't see a difference between banks and credit unions.

As a certain CUSkeptic pointed out at the Partnership Symposium a couple weeks ago, to most people there is no difference.

I see the difference, and the fact that you are even reading this blog probably means you see the difference, but to your average Joe Sixpack its all the same thing.

So we're just supposed to sit here and wait?

In a way, yes. There isn't much we, as credit unions, can do by pumping out advertising to emphasize our security. Between consumer unease, distrust, and fear it probably isn't going to be heard or trusted if its coming from your marketing department.

Say nothing, but do everything.

The real opportunity here is not the chance to spout marketing that touts your security, but the opportunity to prove it.

Pay attention to all this positive press.

This may be the closest thing we get to a national brand. We have nationally trusted press selling the virtues of the credit union movement for us. They are telling the people that read their papers, blogs, and articles what they see as the unifying benefits of belonging to a credit union.

I don't think anyone would argue that this press is reaching, and being trusted by, far more people than an ad on local cable or a page on your credit union's website.

What we need to do now is...

Make sure we live up to the hype.

Take this positive press for credit unions and use it as a litmus test for how you are meeting expectations. Are you living up to the credit union "brand" that is being presented in these articles?

The best thing we can do to take advantage of the current financial situation and the positive press it's brought credit unions is to live up to what the people who people trust are praising about the credit union movement.

Credit Unions in 2020 (or Will We Have Flying Cars?)

I read this article on CUNA’s web site a couple of days ago detailing how Dennis Dollar (how cool is that name) thinks the credit union landscape will look in the year 2020 (thanks to Deb Trautman for passing the article along). Now, I’ve never been one to put much faith in forecasts that stretch for a period more than 5 days (even the weatherman can’t get THAT period of time right) because things never look like you think they will. Heck, we were supposed to have flying cars 8 years ago according to many “forecasters”.

Distrust of long term outlooks aside, some of the predictions don’t quite jive with me.

• Credit union service organizations will exceed the number of credit unions;

My understanding of a CUSO (and please correct me if I’m wrong on this) is that they are cooperative organizations of credit unions designed to help them deal with regulatory issues and the like. They are like a credit union’s credit union. From Wikipedia:

A Credit Union Service Organization (CUSO) allows a credit union the ability to conduct business that they would otherwise be restricted from due to regulatory constraints. Most CUSOs are limited liability companies (LLC) which also provide a measure of protection to the credit union from the actions of their CUSO. CUSOs are usually wholly-owned subsidiaries of their corresponding credit union, and most if not all of the profits generated by a CUSO are returned to the credit union. CUSOs can also sell stock, usually to other credit unions, to help fund the creation and operation of the CUSO. In this situation, the profits are then converted to dividends and paid out to shareholders as specified by the CUSO's charter.

CUSO’s, like any other business, operate based on demand. I don’t see the demand for CUSO’s ever warranting more CUSO’s than actual credit unions. In fact; wouldn’t that be bad business?

• Credit unions will face greater regulatory pressures, and this will drive mergers;

Credit Unions may face an increase in regulatory pressures in the coming years. Some of it can be avoided by staying true to the credit union mission, and beyond that, showing people that we stay true to that mission.

Beyond the fact that some of this regulatory pressure might be avoided, the first bullet point about CUSO’s seems to be contrary to this one. If CUSO’s are there to help groups of credit unions stay in compliance with regulations, and there are more CUSO’s than credit unions, shouldn’t all the bases be covered?

It would be a shame to see so many unique, small credit unions disappear due to being unable to stay within regulatory guidelines. There is much to be said for a small credit union, dedicated to staying small, and dedicated to its membership. A prime example is Mt. Lehman Credit Union. They have, with the guidance of their General Manager, Gene Blishen, positioned themselves perfectly to serve their members. They know what those members want, and offer it to them. Things like their TextUs product cater to the people they serve. It isn’t a giant marketing campaign, but a product that connects the credit union with its members in a way many CU’s struggle with. As Morriss Partee would put it, they are a microbrew of a credit union; unique and incredibly awesome.

• Credit unions will market cooperatively nationwide

This is kind of a vague one. By “market cooperatively” does he mean a nationwide brand? If so, I think you already know my opinion. Credit Unions are a diverse animal. To brand something, it takes a common thread, product, or culture. By trying to put all credit unions under a single brand, it smothers so many cool, unique credit unions (like MT. Lehman) that have a brand that works for them and their field of membership.

Not only does it smother uniqueness, but branding credit unions under a single banner would be nearly impossible. There are so many different cultures, each credit union has it own way of doing things, and a brand requires a coherent culture throughout. When you walk into a Starbucks, you can pretty much tell what your experience will be. Credit unions are totally different. Walking into Boston Firefighters’ Credit Union is necessarily different than walking into Maine State Credit Union because the demographic served by each credit union requires a different approach.

In the first part of the article, Dollar is quoted stating that, “The megabanks will lead to a disconnect with local citizens.” If credit unions end up nationally branding/marketing how would we be able to connect with local citizens any better than a megabank? Our strength is in our diversity, not our size.

• Shared branching will be a key credit union differentiator, with nearly all credit unions participating nationwide, thus reinforcing a national branding campaign.

I’m sorry, but shared branching is not a differentiator. Shared branching is a way for credit unions to compete with the nationwide banks, but that’s as far as it goes. With BoA having branches on every street corner, the fact that you can do business at many credit unions nationwide does not make us different, it makes us the same. It is something we certainly need to educate our members about more often, but to say it differentiates credit unions from banks is nearly outrageous.

My take on credit unions in 2020?

Credit Unions, in my opinion, will be the main provider of community banking. Not based on national branding, not based on shared branching, not based on mergers, but based on diversity. Our strength has always been, and will always be, our ability to listen to our members and provide them with the things they want. Credit Unions will collaborate, rather than merge, to deal with regulatory pressures. They will collaborate to form marketing efforts if it applies to a shared demographic. They will collaborate to pass innovative new products and services from one credit union to another, allowing each credit union to tailor the innovation to their members’ needs. What we need is not a national brand, but to work as a team of unique, individual credit unions. That is where the strength, differentiation, and innovation lie.

A Case Study, Not a Silver Bullet

Larissa and her YouTube video are tearing across the credit union blogosphere. So, in an effort to keep it moving I posted it on a technology forum I belong to. Unfortunately the first response it got was "yeah well, that unpaid board of directors at my credit union decided they wanted to get paid the big bucks. They just switched to a bank."

Wow.

For the past few months I've been in this little glass box of credit union evangelists. I like being in the box. This is where the people who I believe understand the movement are. Unfortunately, in the process I've lost touch a bit with how some people view credit unions, and how some credit unions are losing touch with the movement itself.

It truly is too bad that a few credit unions are losing sight of the movement and becoming so enveloped by income and growth. These few credit unions that are "straying" from their original mission are skewing many peoples opinion of an incredible movement dedicated to the people it serves. These places are the reason a national branding campaign would fail in my opinion. Your mission is your brand, and if you are going to claim that all credit unions function in a certain way, you'd best be sure they do.

As soon as Larissa unleashed her video, talk started flying around about how it was the answer to everybody's membership woes. I'll even admit that as soon as I saw it, my first thought was "this is it, this is what we need to get droves of young people to join credit unions!" Its a good thing there are people like The CU Skeptic and my e-friend to keep me in line.

I've thought a lot over the weekend about how this video could be used for credit unions. At first I was whole heartedly onboard the re-edit-instant-national-ad-campaign bandwagon.

Then I realized that after all my talk about how credit unions need to look at their membership and potential membership, find out what they are looking for, and create products for them, taking Larissa's video and using it as a cookie cutter ad for credit unions is not the way to go.

Larissa's video is not the answer to our individual problems, it is a case study in how to be different. It teaches us what can come from reaching out to the community for talent and passion. It shows us what it takes to look at your target audience and deliver something that they find interesting.

Brand Me, Credit Union!

Yesterday, Morriss Partee of Everythingcu.com and I were Twittering back and forth on the subject of a national credit union ad campaign. I was arguing that if the ads were done in a way similar to www.bankerspank.com that it might be worth it to raise awareness for credit unions. Morriss was arguing that it would only be a giant waste of money. After sleeping on it, I've come to realize the danger of launching such an ad campaign.

This realization springs from a single thought that hadn't really crossed my mind, "where does the money come from for this ad?"

Here's how I see it. CUNA pays for the ad campaign, local credit unions pay CUNA, and members pay local credit unions in the form of rates and fees. We have always prided ourselves in offering free services and better rates than banks. If CUNA starts pushing for a national campaign of some form, more and more of the money coming from members is going to be funneled into the effort. More money spent on a national campaign means less being redistributed to members' accounts as dividends.

Once credit unions are being recognized as a national entity it will be hard not to continue with that image...which means more ads. More ads mean more money. If dividends are already stretched to the breaking point, and the ads don't bring the influx of members they were intended to, where will it come from? Thats right, Higher rates and more fee's. This in itself would defeat the whole purpose of the ad campaign. We would lose our very image to a national cu branding effort.

A national ad campaign has the potential to force credit unions into a position where we blur the line between bank and credit union even more than it already is. If we lose our image, we lose the battle, and I don't want to see that.