“Successful brands are built by people. By visionary leaders. By creative employees. By loyal customers.” —William Aruda, author, Urban Voice: It Takes a Village to Build a Brand
Branding. Thinking of the word often conjures images of dollar signs. Huge Chick-Fil-A billboard campaigns. Endless McDonald’s jingles. Innumerable Coca-Cola TV commercials. Of course, the financial services world is hyper-competitive and full of large brands as well. Large credit unions have marketing staff, budgets and agencies to help them compete in the branding world.
But what is a small credit union to do? Here four steps (or branding 101) smaller credit unions can take when it comes to branding.
(1) Find your niche
As Seth Godin, marketing guru and author of The Purple Cow says, “The most successful companies today are the ones that are finding a niche and serving it.” That certainly applies to credit unions. When it comes to branding, size doesn’t matter: niches do.
As a small credit union, you cannot be all things to all people. Ultimately, you must answer the question, “who is your credit union serving?”
Consider Communicating Arts Credit Union in Michigan. They are a $32 million dollar asset credit union in Detroit. Their niche is serving the underserved. When it came time to open a second branch they didn’t’ hesitate to open in Detroit’s Highland Park area (one of the toughest parts of the city—so tough even the check cashers had left!). Why did they do that: because they know their niche and are serving it. The credit union prices accordingly, but they are clear about their target audience. They are one of the most successful credit unions in Michigan’s Save to Win program.
(2) Implement Cheers marketing
The classic 1980s sitcom Cheers offers insights into how small credit unions can compete with their brand. In the show, when Norm walked into the bar, they called him by his name, sat him in his seat and served him his beer.
Cheers marketing means knowing your members better than anyone else. Knowing your members by sight when they walk in the door is a form of branding. Greeting them like no one else does (even better than their dog) sends a strong brand message: that they matter to you.
A major branding technique you can use is to turn your members into a referral engine. As a credit union, one of the best things you can do is ask your members for referrals. In his book The Referral Engine, John Jantsch says, “Highly referred businesses are good enough to make people want to talk about them, but they amplify this natural desire by making word of mouth an essential element of the culture.”
(3) Leverage your size
There are things you can do larger financial institutions can’t—especially with branding. Smaller credit unions are more nimble and have much less layers. For example, it’s harder for an ocean liner to change directions than a Seedo.
With your brand, answer this key question: what can you do better than larger financial institutions? That leads to a core principle with branding: differentiation. The more unique you are, the less competition you will have.
Mt. Lehman Credit Union (approximately $40 million in assets) in Canada serves as an excellent example. Their tagline is “size is relative.” Rather than seeing their size as a negative they use it to their advantage. Their website even proclaims, “We measure our success in terms of personal relationships, not market share, asset size or annual earnings. Our commitment is to our members, and we believe that it is in your best interest for us to keep things small.”
(4) Develop a plan
Every credit union—no matter its size—must have a brand plan. A brand plan defines your targets and focuses your vision and mission.
“Focus is critical to our brand and credit union’s success,” said Cindy Beauregard, CEO of Heart of Louisiana FCU. “Our brand plan identified specific groups we were good at serving. Instead of focusing in every direction we now target similar subgroups, which leads to better results.”
Branding is more than awareness—much more. By taking the above branding 101 steps, small credit unions can also build successful brands.
In his book 60 Trends in 60 Minutes, author Sam Hill says, “With a continual influx of immigrants and less stigma attached to not speaking English, Spanish will likely continue to grow, and there’s a reasonable chance that the United States may become a bilingual nation in a few generations.” That is a staggering quote—and one with lots of marketing implications for credit unions.
Consider these statistics regarding the Hispanic population:
50 million people of Hispanic descent live in the U.S. (16.3% of population).
Hispanics are the fastest growing population segment in U.S.
U.S. Hispanic consumer spending power tops $863 billion.
38% of U.S. Hispanics have no financial institution relationship.
88% of Hispanics wish banks and credit unions would offer services with them in mind.
In some markets, it may not be a Spanish strategy, but rather another ethnic group. For example, it could be Asian, Indian, etc. But no matter where your credit union is located, odds are there are ethnic pockets somewhere in the population your credit union can reach.
If you are considering targeting Hispanics or another ethnic group, here are questions you must ask:
(1) Do we want to market to the Hispanic community?—That may sound like a basic question but it is absolutely fundamental. There are philosophical issues the board and senior management team must address (for example, will there be a “backlash” by “catering” to one ethnic group?). Your credit union may decide the Hispanic (or other ethnic group) does not fit your overall strategic plan.
(2) Are we willing to make a long term investment?—A long term approach and strategy is needed when conducting ethnic marketing. While multi-lingual marketing will continue to grow, it is not something you simply accomplish in one year. There are operational, marketing and staffing issues you must address. If you choose to go this route, your credit union must devote resources (time, money, staff, etc.) to the initiative for several years to come.
(3) Which segment will we target?—The Hispanic (or any other ethnicity) is not just one large homogenous group. There are multiple subgroups: recent immigrants, long term immigrants, those with Hispanic heritage, and even place of origin (Mexico, Central America, Cuba, etc.). The better you define your target, the more effective tactics you will have.
(4) Will we modify our loan policies?—It’s not that Hispanics have bad credit (it’s that in all likelihood they have no credit). Lending to Hispanics may require you to loosen tighter loan policies. Are you willing to take more risk? With greater risk could come greater reward: Hispanics will be fiercely loyal to those that give them credit.
(5) How will we deal with staffing issues?—Perhaps the greatest challenge credit unions face in reaching Hispanics is staffing. You will need bilingual employees in all areas (branches, call centers, loan department, etc.). You may even have to pay a premium for Spanish speaking employees.
The Hispanic (and other ethnic pockets) represent a huge potential target market for credit unions. However, reaching those groups is much easier said than done. You must first start by answering those key questions.
In honor of International Credit Union Day, the folks at Young and Free created three unique videos that illustrate the credit union difference. Highly creative and entertaining, these clips are a great way for credit unions to connect with youth audiences. And the best part: Young and Free is encouraging you to use them in your marketing efforts.
Click on the videos below and see a Lady Gaga tribute, an original rap and a Journey classic all set with updated credit union lyrics. The videos will leave you (and your members) smiling!
Here are practical ways you can use the clips:
Post to your credit union’s Facebook and Twitter accounts.
Embed them on your website.
Write a post on your credit union’s blog.
Send your members an e-mail blast with the links (note: this is a great way to send your members fun information instead of a sales pitch via e-mail).
Draft a press release and send to your local media contacts (note: the media is all over consumers switching from banks because of high fees; these videos put a clever spin that could capture their attention).
The three videos are:
Don’t Stop Learning
The Way 2 B
These are not just videos for International Credit Union Day. You can actually use them for months to come. The Young and Free spokespeople are extremely clever. Now your credit union can tap into and use their creative genius.
Many credit unions claim they are in a sales and service culture (or service and sales culture depending on who you ask). As part of that culture, credit unions invest a great deal of resources (time, budget, etc.) into training their front line staff on basic service and selling skills. Things like using the members’ name, making eye contact, discovering their needs, and offering a particular product.
But let’s be honest: those are just the basics when it comes to selling. The best sales professionals go way beyond the basic credit union sales skills. Way beyond. It’s time for credit unions to develop an elite sales force. The reality is much of the “sales” training in credit unions is really just glorified service training.
Truly successful organizations identify elite salespeople and give them specialized training. In other words, make them elite. This type of training is not for everyone. Don’t include all your staff in the training—only bring in your top performers. Employees who don’t qualify should then be motivated to want that specialized training (and if they aren’t motivated that shows you they won’t ever be an elite salesperson).
“Credit unions should have separate levels of training for those top sales people,” says Jeff Rendel, president of Rising Above Enterprises. “Don’t be afraid to train them in an entirely different fashion.”
The reality is 80% of your staff HATES sales training. So forget them and focus on the 20% that love it. Those are probably the ones who are bringing you the sales. “Don’t be afraid to train them in an entirely different fashion,” Rendel adds. “They will get more out of the session.”
Elite sales training focuses on follow-up, emotional connection, generational markers, differentiation, overcoming objections and other deeper sales skills.
River City Credit Union (San Antonio) recently conducted advanced sales training for their branch managers. This was training just for the managers. Those are the ones at River City Credit Union who are tasked with business development and reaching the community. So they needed a higher level of training.
“The advanced sales training ignited a passion with our branch managers,” says Eve Hernandez, vice president of marketing for River City Credit Union. “Now they are developing the skills to truly build connections with our members, our potential businesses and our community. By going beyond the basics we have a more effective sales team in place.”
Basic sales and service training is just that—basic. If you want to increase your credit union sales, then it’s time to develop an elite sales force.
McKinsey and Company, a global management consulting firm, recently published a report that offers a great deal of research information. In case you missed it, “The State of Global Banking—In Search of a Sustainable Model,” offers some keen insights. The report is part of their yearly review on the banking industry and explores the state of banking, banking’s future terrain and shaping a sustainable model. While its focus is on larger banks, there are many applicable points for credit unions.
The report soberly noted, “A number of forward-looking indicators highlight limited confidence in the long-term health of the industry. If banks in developed regions are to secure a sustainable future, they will need to transform their business models in ways more radical than many have contemplated to date.”
Here are some of the report’s highlights (followed by some application points credit unions should consider). Remember, this is what McKinsey says is important:
Increased regulatory requirements will require shrinking balance sheets, cutting costs and increasing revenues.
Consumer behavior is changing, including a shift from borrowing to saving and an inexorable migration to online channels.
Financial institution growth will come from capturing business from the competition and from deepening relationships with existing customers (or members in credit unions’ case).
Financial institutions will have to enact smarter pricing strategies.
So what does all this data mean for credit unions? Here are some things we should consider:
(1) Your 2012 strategic plan should balance cost cutting with new revenue streams
What specific products will you offer in 2012 that will generate additional income to your credit union? Is it member investment services, credit cards, or a new product from the Filene Research Institute? Your cost cutting initiatives must be careful not to cut the areas (marketing, H.R.) that are bringing your credit union additional income.
(2) Loans will not just walk in the door—you must fight for the business
As the McKinsey Report noted, consumers are not borrowing at the levels they once were. While that might be good for their personal balance sheets, it puts a great strain on credit union loan income. The vast majority of your credit union’s promotions next year should concentrate on lending.
(3) Go mobile in 2012 or go home
Next year (2012) is the likely tipping point for mobile banking (if it hasn’t already tipped). McKinsey noted that financial institutions “will have to monitor innovations closely, particularly in the mobile arena, to avoid being leapfrogged by other industries.” In other words, technology is going to change the payment systems industry just like technology changed the music industry.
(4) Leverage your existing membership base
As Constance Anderson once said, “Your members are cheating with Charles Schwab, they are riding the wagon with Wells Fargo and they are cavorting with Citibank.” You need to capture what is in your own backyard first. Now is an ideal time to leverage the great services your credit union is providing.
(5) Review the pricing on all your products
Maybe now we know why Bank of America started charging $5 for using their debit card—they had to change the pricing model. While credit unions should never implement those types of fees, we must review our overall pricing strategy. Is there room to pick up additional income? Credit unions can’t win by competing on price but they must look for ways in increase revenues.
Those are just a few brief highlights. The 52 page report offers much to think about for credit unions.