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May 17, 2004
Excellent and timely. Great 'food for thought'!
Chip is right on target. My credit union has benefited from our participation in The CO-OP ATM network. My members have access to over 18,000 ATMs without surcharge throughout North America. SAFE alone could not afford a network to compete with Bank of America. Yet we have one with CO-OP. In the Sacramento area there are 117 credit union branches. Collectively credit unions in our area have more branches than any bank. We are building new branches--often across the street from another credit union. We all fret over the cost of these branches yet very few credit unions belong to the shared branch network. We could benefit so much in terms of convenience and lower cost from sharing these branches. There are nearly two million people who live in the Sacramento region. Credit Unions enjoy a healty market share of about 26% of the area's deposit base. But there are still large numbers of people who don't know the benefits of a credit union or that they can join a local credit union. Collectively the local credit unions spend $10.5 million in promotions expense in 2003. If some of that money went into a cooperative advertising campaign to educate non-members about credit unions it would probably generate an increase in new members for all of us. It makes no sense for us all to beam the same message individually to the same audience. It is ironic that our fear of other credit unions stand in the way of shared branching, cooperative advertising and a shared brand identity for credit unions. Our fear is that we will lose market share to other credit unions. It is more likely that our failure to share branches, cooperatively advertise and collectively build a brand identity will cause us to fail to gain market share from the banks. I think the future belongs to those who dare to be different. Credit Unions need to distinguish ourselves from the banks. What better way to distinguish ourselves than by practicing cooperation in everything we do? The benefit is lower member cost and greater member access and convenience. Henry Wirz
Could create a unique opportunity to provide service without major investments assuming widespread participation. Ron M.
It was billed as a look at the future but instead delivered a warmed-over case for community FOMs and shared branching.
I agree that credit unions are the best kept secret. I don't agree that it is a "network" of credit unions that will finally get the chain reaction going. I believe it is a matter of marketing and education. Credit unions individually and collectively simply don't allocate enough time and money towards educating consumers. They have to understand that "banks" really don't care about them! All they care about are the numbers. Sure, they will treat you great and call you when your CD is going to mature. But believe me, it's not because the representative or bank manager really wanted to take the time to say "hello!" It's because they don't want you to take your money out of their bank branch. Banks do what's right for them not for the consumer. People need to know the priceless value of a credit union membership. Shared branching won't work in my opinion because the larger credit unions that already have convenient locations to serve their member base won't participate and if they do their better interest rates will most certainly "steal" members. Try losing that $500,000 HELOC or CD to your friendly $1 billion+ credit union multiplied by 25% of your membership, ouch!! I think you would eventually be looking at a lot of consolidation(mergers, acquisitions) in the industry if that route is taken. You also have a problem with providing the excellent member service to somebody that doesn't even have an account with your credit union. Sounds easy to fix, but try telling that to a teller whos transaction volume(FTE) skyrockets when implementing a shared branch. If Credit Unions want recognition, its going to be through education, not convenient locations. We are entering into a new generation of delivery system savvy consumers. They want high tech sophisticated products and services and they want them yesterday. That is the convenience they want, not to "walk" over to their neighborhood WAMU to make a grandfathered passbook savings deposit. Who has time for a trip to the bank anymore? Credit Unions also need to invest more in their employees because they are the credit union image. Bank reps are educated in everything from business loans to investments to encoding a simple PIN on a debit card. I think credit union reps need to be brought up to speed regardless whether your credit union offers a particular service or not. Credit Union Branch Managers must get involved in their communities and educate, educate, educate. Internet education won't help. How many times do people google a search for "credit unions" And if they do they will find the info absolutely BORING! Nationwide collective advertising. From a collaborative effort to indivual. Bombard consumers with this wonderful principle of people helping people. Branch numbers should be posted,not stating how many of each products cross sold, but how many consumers we educated. There is a difference! People have to get out of the traditional thinking that CU's are unsophisticated ma and pa establishments that only serve the underserved. That they can insure the same amount of your money that the banks can. Credit Union's serve "people" and it doesn't matter how much money you have because they treat "everybody" with the dignity and respect they deserve. I hope that one day people will look at banks for what they are "for the numbers, not the members!"
Once again, Chip has pointed out the necessity of "thinking outside the box" or "Why Not". GREAT, THOUGHT PROVOKING ARTICLE.
We have tried to get support for a national marketing campaigns through CUNA who says it can't be done. How can we do it? How can we force/encourage all CUs to participate? You are right. It would be good for all, but all CU won't buy in. What is the answer to public awareness?
Align With Members, Not Markets
Industry Performance By The Numbers (3Q ...
Top 100 Credit Union Performance at Marc...
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