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This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

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September 28, 2009


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Jeffry Pilcher | TheFinancialBrand.com

7/26/2012 04:07 PM

Credit unions tout "the credit union difference" -- not-for-profit, member-owned, better rates, better service, etc. -- for these reasons:

1. People don't have any idea what credit unions are. Research has proven over and over that the majority of consumers lack even the most basic knowledge of what credit unions are. Credit unions feel pressure to conduct basic education in their marketing materials because people know so little about the industry. People may see a credit union's logo and realize the organization is a credit union, but that's where the knowledge stops.

2. There are many ad agencies, design studios, and other marketing firms who have never worked with a credit union before. When they're hired, they fall in love with "the credit union difference" because it sounds so new and unique. They've never heard about the credit union story, so they build their credit union clients' brand identities around the basic building blocks of the credit union movement.

3. Credit unions have not become accustomed to competing with each other. A few decades ago, credit unions only had to concern themselves with how they differed from banks. Community charters have changed all that, and now credit unions must point out the differences between themselves and other credit unions.

The article points out three ways a credit union might find differentiators -- products, service, or organizational. These are all good suggestions and excellent starting points. But there is more to a brand than simply identifying points of differentiation. If you only look within to find the ways in which you are different from your competitors, you might wind up shouting about differences no one cares about. It's not just about being different. I's about being different in ways that mean something to the market segment you are specifically targeting. Otherwise, you might develop a brand platform built around differentiators that only appeal to people you don't want -- people outside your target audience.

The article's overall assertion, that "the credit union difference" does not create brand differentiation is absolutely correct. However, it's worth pointing out that an ad campaign or marketing platform is not the sole, single driver of an organization's brand. Just because an organization is out in the market with a certain message does not mean that's what the brand stands for.

A brand isn't what you (the marketer) says it is; it's what they (the consumers) believe it is. Those two things may or may not be the same. Brands aren't built by what you say (in marketing), they are ultimately built by what you do.

jp moore

7/26/2012 04:07 PM

Here's a little different take on the "credit union brand."

First, our research before rebranding indicated that our market population fell into one of three categories: (1) Already members of a credit union and "loved it," (2) not a member of a credit union but were familiar with the term and thought it required special qualifications to join, or (3) didn't know about credit unions and didn't care! That last category is important because it underscores research into how difficult it is to convert someone from one financial institution (bank) to another (credit union); more on that below.

Our experience in the last four years after our rebranding suggests the following:

a) Brian is correct that there is no "credit union brand." Other than the industry structural characteristics (cooperative financial institutions), there are enough differences across the credit union community that there is no shared, national credit union brand experience. Every credit union is more or less unique. (Think of how that would work for Taco Bell, or any other franchise.)

b) The marketing promises of the value of credit union membership are only realized when an individual becomes a member and participates in a credit union. We aren't the only business group that advertises low rates or great service (or "we value you"). In fact so many use the message that I believe it approaches being meaningless. We have chosen to emphasize how we can be partners with members to meet their financial goals; it seems to work. And our employees act that way.

c) Financial services may be less a "commodity" than a "utility." Yes, there is competition in the market place, but there is inertia in the consuming public. Once people establish their FI relationship, they expect service and access comparable to what they experience when they turn on a light or turn on the faucet. Electricity or water, or credit union services should be there when I need them. And changing from one FI to another almost depends on being forced out rather than choosing one over another because of greater convenience or the branding messages in the ads.

Branding, for us, has evolved as unique to our credit union and our markets and I expect it will stay that way.

Chuck Van Court

7/26/2012 04:07 PM

The inherent differences in the co-op banking model warrants branding at a National level though participation by many credit unions.

Credit union marketing campaigns should clearly focus on the unique differentiators of the credit union, but they should also inherently benefit from the brand value of the co-op model enjoyed by credit unions.

Unfortunately, too many "leaders" in the CU space see getting sufficient cooperation from credit unions to create common messaging as unattainable.

Sad, ironic and clearly in the best interest of banks.

Chuck Van Court

7/26/2012 04:07 PM

The commonality among all credit unions is their co-operative ownership structure, which inherently causes differences in how staff and boards are motivated and operate.

Clearly defining this fundamental difference with other non-coop FIs seems to lend itself well to national branding, especially with so much focus now on corporate greed.

Most consumers do not even understand this fundamental CU difference.

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