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Managing
Mindshare By Suzanne Boniface Editor's note: The following first appeared in the January 2008 issue of Credit Union Management. Here's a scenario for you: Your credit union's human resources director got a strange call the other day. It was from someone saying he had an exceptional benefit for your CU's employees—a great way for employees to save money at no cost to your organization. The human resources director thought at first that another CU was pitching the benefits of having your employees join it in some unusual twist of fate. But it turned out the caller was from a bank, pitching a very credit union-like benefit: a bank-at-work program. While it's pretty unlikely that a bank would actually call a CU about its bank-at-work program for obvious reasons, banks are in fact calling employers across the country and offering them very CU-like services. This effect is happening from one corner of the U.S. to the other through endeavors complementing such CU differences as employee groups, financial education and membership programs. CUs are now viewing this as a way banks are marketing—not only working to gain business, but also to capture mindshare—to change people's impressions about the CU difference. It's
About Mindshare "Banks see it as a way to capture that very important checking account relationship," explains Jon Reske, SVP/marketing at $210 million UMass Five FCU, with 22,000 plus members. "We have seen more and more employers requiring electronic deposit of paychecks as a way to reduce costs. This situation has motivated those employers to find a partner bank." Founded in 1967, UMass Five FCU serves employees of the University of Massachusetts as well as four other local colleges. In 1999 the human resources department at UMass began to supplement employee banking options with a list of local banks for direct deposit in addition to the CU. "Many CUs that are exclusive to their original sponsor don't realize how lucky they are to have a presence in the workplace," says Morriss Partee, CEO of Everything CU.com, an online community of credit union professionals, and a branding consultant based in Holyoke, Mass. "Banks see credit unions that used to serve an employer exclusively convert to a community charter, and they rush in to fill the void left behind by the CU." Partee observes that CUs that have adopted a community charter may not have had as much success going into the community as they thought they would. "The SEG employees have that common bond; bringing people off the street is harder," he adds. SEG employees who talk up the CU have the potential to be the best advertising and marketing tool. CUs typically have a smaller budget for marketing and business development than banks, so word-of-mouth advertising, friends telling friends, can be the finest and certainly a very cost-effective way to spread the CU message. Well-established loyalty from existing members speaks countless words in the marketplace. Of course, banks' commercial banking departments put them in a strong position to land agreements for bank-at-work programs with their commercial customers. Many banks provide their commercial lending departments with a sales person who goes to the business customer and retrieves more consumer business from the employees. "There is a definite advantage for banks in the way of payroll stuffers and making it easier to reach employees," Reske adds. Wachovia's bank-at-work program is listed under "HR solutions" on line. It can be viewed under items for "Small Business" or in the "Corporate and Institutional" section of www.wachovia.com. "Employee benefits don't have to end with a retirement plan," the site says. "Our employee banking lets you offer your employees a personal banking package that features reduced rates and waived fees." Citibank at Work offers, "Welcome to your workplace financial benefits program," which comes complete with "special deals and offers" as well as "banking financial education and tools." Even in light of banks offering financial education, member advocacy continues to thrive as a vivid distinction of the CU movement. "Banks are doing them to get something from them; we do it because they are part of who we are," emphasizes Reske. "We stand for member advocacy and we know our members trust us." UMass Five FCU presents about 30 well-attended educational seminars a year throughout its four branches and at employers' sites. The
Role of Membership A clear example is the Generation's Gold checking program that many banks and some CUs use as a value-added benefit. Services for members who join Generation's Gold through a financial institution include restaurant and merchant discounts. These discounts are publicized on line, state by state, and locally through brochures by way of a "local business partners discount program" which is a "cooperative effort between participating businesses and their sponsoring bank." Citibank at Work offers female employees "membership to Women & Co, a division of Citigroup." With this, Citibank is capturing both membership and the female market that many credit unions also seek. By joining Women & Co. through the Citibank at-work program, women are entitled to a 40-percent discount on membership and a "financial education program created around the distinct financial needs of women." Tony Rossell, senior vice president of Marketing General Inc. and chief blogger at www.membershipmarketing.blogspot.com , wrote this in an Aug. 20 post: "Clearly the corporate world is increasingly tapping into the membership concept to support customer relationship marketing efforts. They understand that people want to feel like they belong and they are special." In the opening line of this post, Rossell says, "Is your next job likely to be the membership director for a corporation?" Why is membership marketing a vantage point for credit unions? Most experts agree it clearly brings loyalty. "There is an innate human desire to belong; people define themselves as various groups they belong to," offers Partee. UMass Five FCU underwent a brand reinvention in 2005. Its new tagline is "Be part of something." "We make membership mean something—value, affinity; we have to give them something for being a member; they trust us," Reske explains. As an example, he cites a time when a member came in saying the bank would auction off his house in a few days. "We worked with the member and developed a plan to give them the mortgage to save their home," Reske says. "The bank wanted nothing to do with our rescue plan, but our mortgage department was determined to make this happen. They relentlessly called the bank, going higher up the chain until someone agreed to let our deal go through. We saved the member's home." Many times credit unions try to be all things to all people and that way there is no niche, nothing remarkable that sets them apart from their competition, Partee says. "The more focused and pointed [message] a group stands for, the more value there is in belonging to it; the more far reaching, the more diluted the meaning the group has." In all this, take heart. Banks are trying to replicate what CUs do well. And on the other side of the matter when you try and replicate a service, "your heart, passion and commitment level is not great," he continues. This trend of banks marketing like credit unions can be far reaching and could diffuse the credit union mission if it is allowed to do so. Credit unions need to define themselves internally and externally, stay focused and be strategic as they enter into new markets and community charters. If their messages are clear, concise and attractive, they will be hard to dismiss. The job of credit union marketers and executives is to make the competition negligible. This can be accomplished by being attentive to the needs of existing members, meeting the needs of potential members, and making the value of credit union membership visible. Suzanne M. Boniface is a former credit union VP/marketing and the chief blogger at www.shoutcu.wordpress.com.
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