Getting to “Yes”- How to convince members to approve a credit union merger

Successful credit union mergers share a common theme: The credit unions increase their market share without incurring the expense of investing in new branch offices. However, realizing this and

other benefits won’t occur until the two credit unions surmount one critical hurdle—getting a “yes” vote from the membership. Without it, a merger is doomed.

Getting the Membership Vote from CEO Advisory Group on Vimeo.

The way in which the entities communicate their merger plans to their communities is critical both for a positive vote on the merger and to retain the members and valued employees. Getting a “yes”

hinges on creating and executing a communication plan that includes specific messaging to members, employees, and the media. Credit unions that have launched well-planned merger

communications initiatives have received “yes” votes from 80 to 90 percent of their membership.

Understanding the Fear of Merger Factor 

Understanding the expectations and concerns of their communities—and their passion for the existing entities—is critical to communicating the right message in the right way about a merger. A

credit union evokes strong emotions, unlike your average bank. People are attached to their credit union community. This is why the notice of a big change like a merger will elicit shock and fear at

first. The very word “merger” often invokes powerful emotions and images of big, unfriendly Wall-Street type mergers that result in slashed jobs, major undesirable changes, and even business

closures.

Members will be worried about losing the banking services they’ve come to expect, as well as potential job losses in their community. Members will also be afraid of losing the “small and

friendly” local branch office they love and the relationships with the employees they’ve forged over years. They may resist changes, including everything from new bank account numbers to learning

new technologies. As a result, they might fiercely support the status quo. 

The best way to address these concerns is to be upfront and honest, and to educate the community with an abundance of information about the facts of the merger. Show them their fears are

unwarranted. Tell them what they stand to gain. The best central message to drive home is that the two combined credit unions will be better together than they were separately. The more they

understand the upside, the more certain credit unions will be of getting a positive vote. 

Develop a Multi-Faceted Communications Plan

For maximum impact, communication initiatives should be carried out through multiple channels simultaneously, including email campaigns, online, in the physical branches, in “town hall”

meetings, and in the media. Some credit unions go out into the community to meet members and potential members at events like farmers’ markets to spread the news.

Many credit union members report after a merger that they felt rushed during the process. They felt they didn’t have adequate time to fully consider what the merger would mean to them. Credit unions

should consider the merger from the members’ perspective, so they feel good about the merger, too. The time is worth the effort, because the downside of bad communication is that the members could

vote “no” on the merger. 

Along with delivering the right message, allowing people to voice their concerns and be heard is one of the most powerful aspects of communicating controversial news. This could occur in a “town

hall” meeting, where members can hear from and ask questions of the CEO and board members. Some supportive members can even be recruited as spokespeople, talking to other members about

what they stand to gain from the merger. 

Before questions start pouring in, the credit unions should proactively craft messages that answer the most common questions. Member-facing employees can also be trained to answer such questions,

because well-educated employees will become the biggest spokespeople in support of the merger. 

Add an Expert to Your Support Team

The communication and approvals stage—and member vote—can be successfully executed with the help of a third-party advisor who’s been through the process repeatedly. A seasoned advisor will ensure that the merging credit unions’ communication campaigns are substantial enough and sufficiently on-point to support a successful member vote, as well as transition into the newly merged entity. Look for an advisor who offers a blend of merger experience, cultural sensitivity, and financial industry operations experience. In particular, look for someone who has worked successfully with boards and CEOs and possesses the insight and compassion to understand the many issues around credit union mergers, as well as the obstacles that may hinder the process.  Finally, consider an advisor who embraces technology platforms to streamline the project management, document exchange, and collaborative processes during the merger. With the expert guidance of an advisor with these qualities, the chance of a successful merger outcome is greatly improved.