Credit unions and community banks are closing on an almost daily basis. Through a merger, acquisition or sale we lose approximately one non-mega financial institution per day. Whether for economic, competitive, regulation or some other factor the numbers are lowering.
When conducting strategic planning sessions for our clients one of the pre-session questions we typically ask participants is “The financial industry is consolidating. What are you going to do to ensure you are one of the survivors?”
But let’s be clear: survival is not a strategy.
The best way to survive is to grow organically. While you can certainly succeed through acquiring other financial institutions, that type of acquisition strategy takes strong partnerships. The cliché is true: it takes two to tango. I asked multiple girls to my senior homecoming dance and it wasn’t until the third try that I actually got a yes. You can want to merge all you want, but actually doing so is somewhat out of your hands.
So when developing a successful strategy for the next three to five (or even 10) years look for strategic initiatives that move your credit union or bank forward with solid actions. In other words, be proactive and not reactive.
Examples of strategic initiatives that emphasize organic growth include:
- Build a lasting brand
- Increase product penetration with existing members/customers
- Develop better technology platforms
- Transform from traditional “brick” branching to the online platforms
- Penetrate a particular geographic community
- Create products and services to reach the younger generations
As a credit union or community bank, you don’t just want to survive. You want to thrive.
Most credit unions and banks have a business development department. A person or group of people responsible for going out into the community, working with businesses, serving on various committees or a doing a myriad of other “external” contacts.
While it helps to have dedicated individuals responsible for these key duties, thinking that only having a few people doing business development will work is a false assumption. Why?
Because everyone is in business development.
Successful business development starts with a mindset: the attitude that no matter what position you hold in the financial institution part of your job is business development. Whether a teller, loan officer, accountant or any other title you can do some type of business development activity.
While everyone is in business development, there are three particular positions that absolutely should perform those duties as part of their weekly tasks:
- CEO—Long gone are the days where chief executive officers sit behind a desk, crunch numbers all day or hold boring meetings. The CEO sets the tone for the entire credit union or bank. There is also one major plus CEO involvement brings to the organization: there are certain conversations they can have with fellow CEOs that a business development officer simply can’t have. Your CEO can open doors and relate to key decision makers inside the companies are you are trying to reach. Your CEO is (or should be) a major asset in business development.
- Executives—Just like the CEO, every “chief” should work some aspect of business development. Even the chief financial officer and chief information officer. They too can build key relationships inside the community. One CEO told me that after he saw the positive effects of serving on a chamber of commerce board he then required all his executives not to attend chamber or civic functions, but to serve on boards and committees. “Serving inside an organization is where you really raise your own company’s profile,” he noted.
- Branch Managers—The branch managers provide a local touch that only they can offer. They put the personal touch in your business development activities. Many times they actually become the “face” of your financial institution. One of the biggest challenges facing branch managers is that too often their job requires them to be “in” more than “out.” Help those branch managers by giving them time to perform those all important business development activities.
Business development is a team sport. Make sure you are involving all your key players in it.
The terms brand and branding are tossed around quite a bit these days at banks and credit unions. And while many people use them interchangeably, there is actually a stark difference in definition between the two words.
A brand is what consumers actually think about you. It doesn’t matter what you think you are — all that matters is what the members or customers say. You can think all day long that you are “friendly and fast” but if your consumers don’t feel that way, then your brand is actually “unfriendly and slow.”
Branding is that which you wish consumers believed about your bank or credit union. For example, your branding efforts may include a push towards deeper consumer engagement, more in-depth community involvement or financial education. Branding is the action verb that your bank or credit union employees to drive its identity.
Obviously, there can exist quite a gap between your brand and your branding.
The question becomes, then — how can your bank or credit union align its brand with its branding?
Quite simply, you must have a brand strategy. And your brand strategy does not merely involve a few people around the marketing table trying to come up with catchy slogans and logos. Rather, a true universal brand strategy for your bank or credit union involves every single person in every single department, front office, back office and frontline.
A great place to start in this reconciliation between your brand and your branding is the marketing audit. A marketing audit dives deeply into the functions of your bank or credit union, from its marketing collateral to its organizational structure, a deep-dive look at area demographics and thought-provoking mystery shops in both your branches and your key competitors.
Aligning your brand with your branding is like mile one of a cross-country trip. You need to know where you’re going before you start. That requires a map (or more likely today, a GPS). The marketing audit can serve as a powerful guide in directing your bank or credit union towards its ultimate brand and branding goals.
There are thousands of ways to define branding. One formal definition says branding is “the process of determining your competitive advantages, building an institutional culture, a brand strategy and a business strategy to those advantages, and then communicating that brand effectively and consistently.” In other words, branding is a strategic process and not a one-time project.
My favorite definition of branding is branding is “who you are.” It is the sum of everything you say and do.
However, branding is more than just a definition.
In reality branding is:
- How your employees answer the phone
- How you greet consumers
- How your branches look from the outside
- How your branches look on the inside
- The promises you make (and keep)
- The service you provide
- The way you treat your fellow employees
- Your on-hold message
- How your employees dress
- The way your bathrooms smell
- The attitude you bring to work
- The way you run meetings
- The speed with which you respond to a request
- How well your website is organized
- How easy your mobile app is to use
- The big things
- The little things
- Your strategy
- Your tactics
- Your culture
In sum, branding is everything.
A recent article in AdWeek magazine highlighted the importance of connecting brands with influential millennial consumers. By influential, the article means those that are more likely to express and share praises and criticisms of brands online with their peers. Think individuals that do a lot of Facebook posting, Twitter tweets, Instagram pictures, YouTube videos and online reviews. They are the creators of online brand recognition and their actions must be both respected and monitored by banks and credit unions.
While the article mentions six ways to connect with these influencers, we will briefly touch upon three.
- Quality over quantity. Millennial influencers tend to be more critical of brands that blast them with too much information. Rather, they look for quality content over a barrage of sales pitches. Seek to interact with these millennial influencers through messages that create positive experiences, such as education, that influencers in turn share with their online and off-line peer groups.
Application point: reach out to Millennial consumers with pieces that focus on education rather than an overt sales pitch.
- Social responsibility. Millennials are all about organizations (including your bank or credit union) that are into social activism. Brands that take part in their communities and work for the betterment of the people that live there are more likely to connect with millennial influencers who are then more likely to talk them up in a positive way to their friends and family.
Application point: make sure that your bank or credit union participates in events that are important to the community and that you proudly communicate that involvement to your consumers.
- Make it authentic. The old adage goes something like “people hate to be sold on something — but they love to buy.” If your bank or credit union can craft an authentic brand message that both informs and complements these influencers’ lifestyles, interests and financial habits, it is more likely to gain a bigger share of their trust and their wallet. Millennials are savvy and will see through a pushy sales pitch quickly. Make your brand message authentic and helpful instead.
Application point: don’t try to push your products or services on Millennials — rather, seek to influence their wallet share by providing education and authentic personality in your marketing.
Millennials are a demanding generation when it comes to offering financial products and services. However, they can afford to be demanding in a hyper- competitive environment in which banks, credit unions and non-traditional financial services providers are in abundance. Your bank or credit union is wise to focus on millennial influencers and hone its brand in such a way that leverages their insight and influence amongst other people of their generation.