Study Completed and Cooperative Efforts to be Launched in the Dakotas

by: Robbie Thompson, President/CEO, Credit Union Association of the Dakotas

In North and South Dakota, the average membership growth rate over the last ten years has been just under 1%.  This is similar to many other states; however, for the last two years the membership growth rate in the Dakotas has been essentially zero.
Certainly we know that this number can be affected by members closing and consolidating accounts.  Still, this is a concerning trend –  especially when we know we have great credit unions  doing wonderful things for their members and their communities, and at a time when both states are seeing significant population growth.

In response to these flat membership growth numbers combined with an awareness of what many other national surveys have shown (e.g. CUNA 2010 Survey:   64% of non credit union members did not know they could become members or think they cannot become credit union members;  2011 CUNA Study:  70% of consumers between the age of 18-24 were “not at all familiar” with credit unions), the Credit Union Association of the Dakotas (CUAD) undertook a study in early 2011 of consumer perceptions and awareness of credit unions in the Dakotas.

Working with Member Tree Consultants, a division of H2M in Fargo North Dakota, we surveyed over 1,600 consumers throughout the Dakotas and conducted focus groups in both states.  The findings, while not entirely unexpected, did confirm consumers’ general lack of understanding about credit unions and the credit union difference.  So what were some of the findings of our study?

• 42% of Dakota consumers are unsure or do not believe that credit unions offer mortgages, while just 8% were unsure or did not believe that banks offer mortgages.
• 40% of Dakota consumers are unsure or do not believe that credit unions offer online bill pay, while only 12% were unsure of do not believe that banks offer online bill pay.
• 45% of Dakota consumers are unsure or do not believe that credit unions offer credit cards, while just 16% were unsure or do not believe that banks offer credit cards.
• 60% of Dakota consumers believe that credit unions offer a complete line of financial products and services, while 85% believe that banks offer a complete line of financial products and services.
• 67% of Dakota consumers believe that credit union deposits are federally insured, while 87% percent believed that bank deposits were federally insured.
• 44% of Dakota consumers believe that credit unions are for-profit institutions, with an additional 28% unsure, thus showing that 72% don’t know or are unsure of how credit unions are structured.

Supplementing these survey results were observations from various focus groups.  One such group consisted of twelve participants.  It just so happened that none of them were credit union members. Without knowledge of who we were or what we were there for, the participants generally expressed that they were unhappy with their banks.  In some cases, to say that they were “very unhappy” with their banks would be an understatement.   And, when asked if they knew if credit unions were an alternative, virtually none of them were familiar with credit unions.  However, once we were able to explain the credit union difference, philosophy, and options, they generally said they would consider a credit union.  In fact, a follow-up survey found that two of the twelve later opened credit union accounts.

After reviewing many studies, conducting our own, and looking at the statistics, what did we know? Consumers lack a general understanding of credit unions, their structure and their products, especially when compared to knowledge about banks.  We also know that informed consumers are more likely to convert to a credit union.  Armed with this information, we are in the process of developing a multi-faceted North and South Dakota credit union awareness and education effort.

Along with Member Tree Consultants, we have developed a strategy that will incorporate targeted mass media tied with community visits by CUAD staff and supplemented by a robust social media effort.  Through this campaign, we will convey messages through various channels that credit unions offer similar services to banks, but with better service; that consumers are likely eligible for membership in one or more credit unions; that credit unions have money to lend; and that there is a credit union closer than you think.

This campaign will produce and allow us to collect some measurable results, such as:  event visitors, website hits, Facebook likes, Twitter followers, and the number of “join a credit union” incentive redemptions.  Follow up surveys will allow us to see if the needle is moving towards greater consumer awareness about credit unions.

We already know that credit unions are the best choice for consumers.  We hope that through these education and awareness efforts, more consumers will discover that as well, and ultimately become a member of one of our Dakota credit unions.

Robbie Thompson, President/CEO, Credit Union Association of the Dakotas
Thompson is responsible for the management and oversight of the Credit Union Association of the Dakotas, and in conjunction with the Board of Directors establishes and achieve the Association’s strategic objectives. Thompson a native of Minneapolis, Minnesota earned degrees in Business and in Economics from the University of Minnesota-Morris, Morris, MN. He also earned a Juris Doctorate degree from William Mitchell College of Law, St. Paul, MN, and is a licensed attorney. Thompson has spent his entire career in the financial services industry. He started his credit union career as a compliance attorney with the Minnesota Credit Union Network where he advised credit unions on legal, compliance and regulatory requirements and advocated for credit unions on regulatory issues. Thompson also was General Counsel and Vice President of League Services for the New Jersey Credit Union League, where he oversaw the education, non-profit foundation, compliance and legal areas for the Hightstown based state trade association. www.cuad.coop