A few years ago I was conducting a strategic planning session for a client. During a chat with the CEO and board chairman prior to the on-site event I asked them who they were trying to reach. There was a long pause and then they replied, “Yes!”
I scratched my head at their answer and let them know maybe they didn’t understand my question. So again I asked, “Who are you trying to reach?” Once again they said, “Yes!” It turns out they were trying to be all things to all people in their state. It was a terrible business model. We spent quite a bit of time during the planning session honing in on specific segments they could reach. Now they have that question better answered and are thriving. Not by reaching the masses but by reaching the niches.
Why? Because niches lead to riches.
For example, Shawn Hanson, CEO of Marine Credit Union in Wisconsin, said recently on a blog about Top 100 Credit Unions,“ Develop a niche. Following the herd doesn’t work. One of the things you have to say ‘no’ to is being all things to all people.”
One of the traps many credit unions fall into is developing too broad of a niche. For example, several credit unions have the Millennial Generation as one of their target audiences. Even though getting younger as an institution is certainly a noble endeavor, focusing on the 18-35 segment is just too large. For example, within the Millennial Generation there are several subgroups, such as the Millennial Moms, DINKs (dual income, no kids) and HENRYs (highly educated, not rich yet).
When it comes to developing the best niches for your credit union keep these principles in mind:
- Limit targets to three or four—it’s okay to say “no.” In fact, when it comes to your targets make sure you reduce and don’t add.
- Remember your legacy—unless there is an external catastrophic event (for example, a plant or factory closing) one of your audiences should always be your original core group as a credit union. As the old saying goes, “remember to dance with who brung ya.”
- Combine research and gut feel—you certainly want to use analytics from as many points as possible (U.S. census, MCIF reports, psychographic information, etc.) but watch letting data drive every decision. Make sure you talk to people from your potential audiences so you know what really matters to them.
- Use an outside facilitator—when you get a group of people in the room to try and narrow your focus you will have a great deal of differing opinions. You will need an expert to make sure it is a team approach and that no one person’s opinion dominates.
Remember, branding is not about you: it’s about them (members and consumers). But it’s also not about ALL of them—it’s about particular niches.