Bank vs. Credit Union Marketing: Is There a Difference?

Ask any credit union customer service rep why you should do business with their institution and not with the local community bank, and they’ll give you several compelling reasons.

For one thing, they’ll say, their owners are the people who do business with them. Thus, their customers are “members” who enjoy basic banking deposit services and loans at more competitive rates. As owners, their members enjoy greater rewards than community bank customers do.

They’ll point out that credit unions are not-for-profit, unlike community banks, which exist (like any business) to maximize profits for shareholders. Banks earn profits made by charging higher fees and paying less interest on deposit accounts.

A community bank customer service rep will counter by mentioning the community bank’s broader range of deposit and loan products, including loans to support local businesses. “Convenience” is a big word: more branches, more ATMs, more services.

Banks and credit unions have been sniping at and competing with one another since the days I watched the “Mickey Mouse Club” (on a black and white TV) from my playpen. They don’t like each other, credit unions and community banks. Period.

Yet, to a marketing professional, who has chosen to accept employment with one or the other, is there really such a big difference between the two types of financial institutions? No, not really. They both have a passion to provide friendly, convenient service.

Both hate the BIG banks. During the recent big bank scandals that ruined the economy and uncovered appalling corporate greed, community banks and credit unions launched campaigns to plead with the public to not paint them with the same, broad brush. “Switch to us!” they cried. “We’re the good guys!”

Both work hard to demonstrate their commitment to the community. With either, your hard-earned money stays local. It behooves both community banks and credit unions to keep consumers’ money local.

Both are equally confounded about the best ways to go digital, whether to employ social media, whether to build more brick-and-mortar facilities when the writing is on the wall that today’s consumer rarely enters a branch, preferring to bank online.

Both claim in their advertising that their customer service is the friendliest, the most caring, the most compassionate. Neither seems to recognize that customers could care less about that particular piece of messaging because everyone says it, even the big banks, and too many times, it simply isn’t so. Customers these days care mostly about convenience. Witness the fact that the majority of people bank with those nasty big banks despite high fees and no matter how poorly they’re treated.

Both types of financial institutions grow deposits and extend loans. Both are deliberately risk-averse; always have been. The big banks? Not so much.

As marketers, therefore, the task to differentiate one financial institution from another becomes the greatest challenge. I would recommend to all of them not to sneer at the mention of the other’s name or business model. Rather, focus on the needs of the consumer. Find the people who respond most sympathetically to your message.

The hardest task, after all, is not convincing your target publics that one is better than the other. It’s convincing them to leave their big bank in the dust and make you their primary financial institution, and not just because you’re “nice.”