In a recent session at Southwest CUNA Management School on “Advanced Branding for Credit Unions,” we had a passionate discussion about whether small credit unions can compete against larger ones. The answer: niche marketing. Size doesn’t matter—niches do.
Successful credit unions (no matter the size) target niche groups. Your credit union cannot be all things to all people. It might be families, single moms, seniors, Hispanics or one of a dozen other demographic profiles.
The key is to pick three or four groups and become a financial service provider leader for them. Your credit union is better off being the number one choice of a small subgroup than the fifth or sixth choice of a larger group. The smaller, niche group tends to be more loyal to you.
For example, I conducted a long-range planning session followed by a brand plan for Heart of Louisiana Federal Credit Union. During that process we determined the credit union was challenged by trying to serve too wide of an audience. We chose to focus on blue collar workers, professionals and residents near one of their branches.
“Focus is critical to our brand and credit union’s success,” said Cindy Beauregard, CEO of Heart of Louisiana FCU. “We were able to identify specific niches we were good at serving. Instead of focusing in every direction we now target similar subgroups, which leads to better results.”
So what are a few emerging niche groups your credit union might want to consider targeting? Here are a few to consider:
(1) Minorities/new immigrants
(2) Low wealth/underserved
(3) Small businesses
(4) Young adults
(6) Prime Time Women
Astute marketers will notice that these unique groups might require unique lending situations. These target groups are getting loans somewhere: the question is, are they getting them from your credit union?
It’s also important not to put all your eggs in one basket. Multiple targets could shield you from possible economic downturn in one particular industry.
Big or small, all credit unions can compete—just find your niche.
I was listening to the radio a few weeks ago and heard that the game show Jeopardy was introducing a new category called Alex Meets Auto Tunes. Auto Tunes is a voice enhancement technique used primarily by rap artists to add digital sound effects to their songs. In this Jeopardy category, host Alex Trebek performs the verse of a song with technological help. The contestants have to answer with the correct name of the song. The category debuted with nursery rhymes and folk songs like The Farmer in the Dell, Oh Susana and Danny Boy.
The radio station and a few random blogs “presume” this new segment is the show’s attempt to engage a younger audience. I have found nothing to confirm this however, and from a marketing perspective, I find it hard to believe that such a long running show would jeopardize (no pun intended) its brand to engage young people with irrelevant content.
Think about it. Jeopardy has a very consistent brand and a very consistent audience. Changing one category that doesn’t even appear on every show is the equivalent of a credit union claiming it engages youth because it publishes a youth newsletter a few times a year. Unfortunately, a youth newsletter, on its own, doesn’t engage kids anymore than a folk song does.
The real way Jeopardy engages a younger crowd is by inviting them on the show. There are several college weeks in each season when all the contestants are college students. Last week, Jeopardy hosted kids week. All 15 contestants were school age kids, and all categories were kid friendly. During college week and kid week, Jeopardy doesn’t change its format or its brand. It simply offers questions that are more age appropriate for youth with above average intelligence.
That’s the way credit unions should engage their youth members—with age appropriate products and services. Taking the fee off your regular checking account and calling it a youth account is not engaging your young members. Offering them accounts with age appropriate features and benefits is.
Some credit unions host summer money camps. Kids learn key money skills like writing a check, using credit and making a budget in a fun environment. Some credit unions have partnerships with area school. They offer age-appropriate financial education in the classrooms. Some even make their own curriculum. Some credit unions use age appropriate blogs to start conversations with and among their youth members about financial topics important to those youth. Others also have youth advisory boards.
Engage your youth members by inviting them in and interacting with them on their level. That’s not only how you get their attention, it’s how you keep it for years to come.