by Josh Allison, Founder and Chief Ideator, Think Café Consulting
In the last thirty to forty year in the US, we’ve seen an increase in mass product creation, service duplication and as a result product and service commoditization. Because of this commoditization, more consumers are opting for more socially driven purchase preferences. Ample consumer choice is dictating consumer preference. More choice is allowing consumers to become advocates for some brands, and apathetic toward others. The power is shifting from the corporation to the consumer.
Essentially, consumers are seeing all the countless choices in front of them, marketed at about the same price, and with approximately the same benefits and features and as a result they are continuing to opt for the product choice that aligns with their own personal values.
From Cone Inc. to Edelman, to BBMG, the research is proven and documented. Clearly, consumers are demanding more from businesses.
Take Cone Inc. and their recent research on “Millennial and Mom” purchase preferences in their 2010 Cause Evolution study. Their study found that ninety percent of consumers want businesses to tell them what they stand for and nearly twenty percent of consumers are willing to pay more for cause-driven products.
Or consider Edelman’s work in their Citizens Engage! Good Purpose study which shows that citizens are actively rewarding and punishing brands based on corporate practice.
And finally, take BBMG and the groundbreaking research they’ve done on the American New Consumer. Seventy million strong, these “new consumers” are twice as likely to try new things, and even through the recession are willing to pay twenty five percent more for socially responsible/sustainable products and services.
What BBMG also found with these new consumers was a drastic change in mindset:
- From lowest price to total value
- From waiting for solutions to creating their own
- From asking what’s in it for “me” to what’s in it for “we”
- From seeking more stuff to seeking more meaningful experiences
- From trusting marketing messages on the front of corporate packaging to examining the ingredients of what corporations are really made of
- From being passive recipients of brand communications to becoming active co-creators of content, products and experiences
The question is not whether consumers have moved in this direction. The question is what credit unions will do about it. Will they continue, generally speaking, to stop short of proclaiming their purpose and cause and continue to simply promote their commoditized products and services? Can credit unions move beyond the product and starting talking about their movement, their idea of mutual self help, and their member-centered decision making?
Here are three ways credit unions can move beyond just talking about the product:
Proclaim purpose internally and externally:
- When Southwest Airlines realized that they were in the business of “democratizing the skies” they sent an internal “Freedom Manifesto” to all their employees. They rallied around their bigger purpose of helping the eighty five percent of Americans who weren’t flying when they started. They referred to their employees as “Freedom Fighters.” When they entered a new market, they referred to it as “market liberation.”
- Credit unions should do the same thing. They should talk about the difference they make in the lives of their members, and what would happen if they weren’t in their community/market. They should celebrate who they are, and rally employees around the good work they do in serving their member-owners. They should view themselves as financial freedom fighters that liberate consumers…one member at a time.
Simplify the message and concept:
- Kiva, Lending Club, and Zipcar all have a “How it works” link on their websites. They’ve simplified and articulated what they do into an easy step by step approach so that consumers can understand their concept. Credit unions should do this as well.
- A “How it works” link would explain the concept of a financial cooperative in a relevant and easy to understand way, while simultaneously celebrating the unique credit union idea of mutual self help. It would help explain that when one member makes a deposit, it helps another member borrow at a more favorable rate. It could also help explain that profits are returned back to the member in the form of better rates and services, as opposed to going to some out of town profit-driven shareholder.
Look for opportunities to pair the product message with the purpose message:
- Mozilla Firefox is a perfect example of this. When you visit their website, you will find more about what they stand for, than what they do. They don’t just talk about the “what” they talk about the “why” as well. Toms Shoes is another example. When you visit their website, you’ll clearly see that they’re not just selling shoes, they’re also selling an idea: “one for one.”
Consumers are ready for a different conversation with businesses, and no one in the financial services industry is better positioned and ready with a more relevant and meaningful message. Credit unions are the clear choice. As you start your 2013 marketing plan, be sure to cover the traditional four P’s of marketing (product, price, place, promotion) during your planning. But while doing so, remember the fifth and most important one of them all: purpose.