When it Comes to Growing Membership, It’s all About the Fees
by Henry Meier
When you’re done reading my blog this morning, you should check out this blog from the Financial Brand reporting the results of a comprehensive survey on consumer attitudes toward banking services. In one sense, it confirms the obvious: consumers don’t like fees. But it also underscores what I think is a fundamental failing of credit union branding.
First, according to the survey, 36% of people are “on the verge” of switching financial institutions because they don’t like the fees. In contrast, only 10% of consumers said they would switch financial institutions because of customer service. One final note that I think is worth considering is that, on average, people estimate that they spend five hours a month on banking activities. Incidentally, 8% of respondents said they spent at least 11 hours a month on these activities. I have no idea what they’re doing in all that time, but suffice it to say they have more time and money than I do or don’t have a computer.
Which brings me to the credit union side of the story. If you talk to any credit union person and ask them why credit unions attract members, we always say low fees and great customer service in a cooperative environment. This is an important message to get out to law makers since our tax exempt status is what ensures that all that can be true. But to really grow an individual credit union, I’m not at all convinced that emphasizing the cooperative credit union structure is the best way to draw in John Q. Public. For one thing, when he or she is floating around the Internet late at night, the first thing they’re going to look at is the fees.
Second, while our existing members love us, emphasizing the “union” part of our institutions actually has a huge downside. Whereas everyone knows they can walk into any bank and get a loan if they qualify, many people, if they know anything about credit unions at all, believe that they somehow don’t qualify for membership. I’ve said it before, I guarantee you I am not the only person in the credit union industry who has been asked at a dinner party if you have to belong to a union to belong to a credit union.continue reading »