by: Hon. Daniel A. Mica, Principal, The DMA Group
Yes, timing is everything and the time is now! Headlines are screaming, radio and television are blaring, and social media is awash with stories of discontent with banks. The search for alternatives is on and there is no question credit unions are a perfect alternative. As the wave swells, the opportunities increase for credit unions. Truly, the time is now to strengthen credit union awareness, increase membership and build loyalty.
In order to catch the wave and take full advantage of the discontent in the marketplace, we must first look to those closest to us. Our members. If we in the movement make an honest analysis of our members, we would likely find that, with few exceptions credit union members are unaware of the majority of benefits that credit unions offer and the critical differences between their credit union and banks. Few exceptions yes, but exceptions nonetheless. It would benefit credit union leaders to reach out to your colleagues and seek out leagues and individual credit unions who have found successful ways to educate their members on credit union values. Open a dialogue and share this knowledge. Our goal should be that the vast majority of our members can quickly conjure up “the 30-second version” of what a credit union is and what a credit union represents.
Yes, credit unions are a “good deal” and are “run by nice people” but they are also much more than that. Now is the time to dust off your credit union member education program and update content to reflect current services and technology. Roll out of your credit union member education program can be quick and cost effective using web communications, email and new media. New methods of distribution can also allow for easy collaboration with others to create cohesion and cooperation so we can ride the wave together.
Recent research from CUNA shows that among non-members only 33% are “very” or “somewhat familiar” with the services and benefits of a credit union. As noted above there are exceptions to this rule and the numbers may be better within a specific credit union’s membership. Exceptions aside, nearly 70% of members and non-members, by my estimate, are in need of enlightenment and that can only be provided by individual credit unions.
I know there are some credit unions and leagues that can boast high percentages of member knowledge. But the questions lie in the gap: Are certain credit unions doing a better job of educating their members? Are there certain regions of the country where members themselves are already knowledgeable and have made an informed decision when choosing their credit union? I believe it would be worthwhile to take a closer look at current member’s understanding and ability to articulate the service and satisfaction credit union’s provide their users.
As our economic recovery goes through fits and starts it may seem unaffordable or unnecessary to spend money researching your own members. According to market experts, it costs six to seven times more to acquire a new member than to retain an existing one. Remember two things: a small expenditure now may yield huge returns in the very near future and over the course of the past year credit unions are experiencing positive movement in several key growth areas. Our continued strength and increasing health puts us in a historically unique position relative to other financial institutions. It may take a bit of belt tightening to budget for these initiatives however there is great promise for a bountiful harvest of new members in the near future.
One of the first things that can be done is a benchmark survey of your credit union member knowledge. An effort such as this can be an invaluable guide in determining where your focus should be. The other day I was speaking with a credit union CEO who has made member education a priority and has achieved great success. He highlighted an example of how understanding member knowledge can be used not just to increase overall membership but to provide better service for his current members. He told me that his credit union offers very low rates on auto loans. The next comment caught my attention, as I recall he said, “70% of his membership would all be eligible for this rate, unlike banks and other financial institutions who offer extremely low rates but because of restrictions and qualifiers only a small fraction of their customers would be eligible.”
Another fact commonly known among credit union professionals, is that over the last several decades credit unions “on average” have offered savings rates that are 1% above the banks and lending rates that are 1% below the banks. Just to be clear, that “on average” reflects several decades and the current economic volatility may have changed that for a few years, but the fact remains credit unions are a better deal and the fact remains many, particularly non-members don’t know this.
These are just a few examples, I’m sure credit union professionals have dozen more to choose from.
So from my perspective, the time truly is now to build value proposition of credit unions of members and non-members. Bank Transfer Day was only the beginning, and the good news is, the banks are going to continue to help us in our recruiting efforts with their continued plans to add new fees, penalties and charges.
If we individually or jointly can ride this wave by increasing awareness of the value proposition of credit unions, we will indeed increase membership and build loyalty. The time is now, catch the wave.
Dan Mica, former head of the Credit Union National Association (CUNA), established The DMA Group as a means to combine a myriad of experience into a one-stop consultancy. Elected in 1978 to represent Florida’s 11th district in the U.S. House of Representatives, Dan Mica served five terms before beginning what would become more than two decades of work in the world of non-profits and association management.