Customer service, community partnerships, and customization
Where are your product ideas and promotions coming from? Are they coming from the bigger credit union a few miles away, from your bank competitor or something else offered by a local competitor? Credit union and financing products are pretty standard. Regardless of asset size, your institution probably has a mortgage product, an auto loan product, a personal loan, a credit card product, and a few more products that are specific to your asset size and location. It isn’t easy to customize or innovate on basic products.
However, that doesn’t mean that your credit union has to use a standard vanilla product template and provide a one-size-fits-all offering. Credit unions are great at creativity and caring. Across the country, credit unions are trying all kinds of marketing tactics to draw members into the lobby. These range from events like “popcorn day” to partnering with a local pet shelter to be a host site for adoptable pets. Fun events like this build a community presence and create goodwill. Similar practices can be adopted for loan products (within legal, compliance and regulatory guidelines). Your organization probably creates a lot of its promotions based on what is going on in the local community, such as celebrating around a sports team or fundraising for a nearby charity.
Local non-profits can be a great source for loan referrals, especially if they trust your offering is unique and responsive. It is a great competitive strength to tailor a product to a niche that is specific. One of North Side Community Federal Credit Union’s most replicated products, the citizenship loan, was developed by conversations. It was through these conversations that a community partner that shared their clients struggled to afford the fees to take the citizenship test. In 2006, the credit union took this information and created a product for local immigrants. The citizenship product followed similar guidelines as every other loan offered by the credit union, but took into account some of the unique needs of this problem and created special underwriting guidelines for those referred by verified community partners. This approach comes from listening and being present in the community, not just expecting people to respond to your newsletters, billboards, and Facebook ads.
This community-centric focus has been one of our unique competitive advantages in a very saturated financial market. North Side has 23 financial institution branches within a one-mile radius of its current location, yet sets itself apart by listening and responding to the community. Not every loan promotion that is launched receives widespread attention, but borrowers appreciate the options. Whether a CDFI credit union or not, there are probably organizations near your branches that have customers, clients or partners that could be served through a pilot loan designed to serve a targeted need. Don’t wait for a larger trade association to offer your credit union the opportunity to pilot an innovation. Develop it yourself. Who knows? If it goes well, you may just have an innovation-leading product in your branch soon.
