Credit Unions and the Price Club: The Best Kept Secrets

I keep hearing at industry conferences, in trade publications, during webinars and such that credit unions are the “best kept secret” in their towns. Initially, this viewpoint is taken in a negative light as most of us want to be mainstream — not flying under the radar so to speak. But is being a “best kept secret” all that bad”?  For now, I don’t think so.

There are many companies/industries that are and have been kind of a secret. I remember years ago out here in San Diego before Price Club merged with rival Costco in 1993, it was the best kept secret in town. If you could get a membership, you were one of the few, the proud that could go buy stuff in bulk. So cool it was at the time.

Today, just about anybody and their pet can be a member of a Costco and buy bulk goods. No longer a secret. For a while there, it was a semi-exclusive outlet that people were talking and talking about. There was quite a buzz about the Price Club back in the day before it became Costco and became the behemoth Starbucks of buying palettes of toilet paper, shampoo, and beef jerky. Turned out Ok for those guys.

There has to be some study somewhere that I am too lazy to research that displays consumer’s behavior when it comes to exclusivity or membership creating more demand.  Again, being a member of the Price Club at the time was fairly exclusive — which in turn created interest and, thus, demand. Everybody wanted to load up the back of their SUV with a case of pork and beans, 300 Pepsi’s, and three new office chairs. Americans love their stuff and Costco delivers the goods — in bulk!

During college when we would plan our surf trips to Mexico, anybody who was a member of the Price Club at the time was more than welcome to join our weekly weekend adventures to Baja for some uncrowded waves. We could then hijack their membership and buy tons of food and other goods for our trips. I remember thinking that I had to tell my parents about this place.  Sure enough, they already knew through talking with their friends and had joined. I now had visions of hubcap-sized cheesecakes dancing in my head. Point here is word spread about this “exclusive” place like the free samples of cocktail weenies on the corner of the frozen food section.

Pardon my digression.

Instead of repelling this notion of being a “secret”, I think credit unions should embrace it. They can create an air of exclusivity (aka: membership), which, like Price Club and other membership entities, promote its own, self-induced buzz. Members talk about their experiences and the rates at credit unions and people become curious as to what this thing called a credit union is — and how they can get in on this action.

Based on the latest growth numbers the industry has experienced since Bank Transfer Day (800,000 new members in Q1 2013), people are already curious. They are looking for options and ever-slowly noticing credit unions as a fantastic option that not too many people know about. “Cool,” may be their thinking, “I just scored a killer rate on my new car and saving a ton of cash each month — and I can still deposit my check and pay my bills from my iPhone. I’ve gotta tell my friends and family about this.”

There’s something appealing about this “score” or “scoop” and not having very many people know about it. It’s like telling a new joke and the latest news to your friends. You got the inside info. Now you’re a trusted resource. But little do you know that your friends and family are telling their friends and family about your credit union scoop — which is the best advertising of all.

So by being the best kept secret in town, credit unions, in theory, can create a word-of-mouth buzz much like other membership, club-like organizations. People want to know what goes on at these places. But they have to be different to get people to talk. Just having great rates and a mobile app ain’t going to do it because King Kong Bank on the corner will most likely have close to the same thing.

For credit unions, being member-owned is huge. But not a lot of people care about that initially. What does that mean for them? With a bit more education, they ultimately realize that have a say in how their FI is run and they can get a little something back for their business, much like the outdoors store REI. I think this would be so appealing to Gen Y and Millennials.

What I am ultimately getting at here is that being the best kept secret is not a negative. I like it. Right now, leverage it because people gravitate toward that exclusivity feeling like they’re among the few that know — even though there are more than 96 million members in the know, as well. And who really can keep a secret when it’s this good, anyway?

What are your thoughts on credit unions being the best kept secret as a marketing strategy  — for now?