Credit Unions Go Green To Grow Market Share

It’s not news that the auto retailing industry is going green: more than eight hundred dealerships nationwide have joined the Environmental Protection Agency’s Energy Star Small Business Network.


It’s not news that the auto retailing industry is going green: more than eight hundred dealerships nationwide have joined the Environmental Protection Agency’s Energy Star Small Business Network to date, and this past summer AutoExec Magazine published its second annual “Green” issue, identifying the current trend toward “fuel-sipping” vehicles and noting that “with climate change and soaring gas prices, more and more consumers and businesses are joining the green movement.”

Now, savvy credit unions are acting to increase their market share by offering special programs for buyers looking to join this surging trend toward more fuel-efficient vehicles. While individual programs may differ on the specifics, the overall message to consumers is consistent: “We’ll reward you when you Go Green.” And though it may be too early to forecast exactly how much of a market share increase credit unions can expect, all agree that the shift in the mindset of buyers is here to stay.

According to a recent Kelly Blue Book Marketing Research study conducted through the company’s web site, nearly 90 percent of car buyers say they are concerned about the future of the environment. Combined with the surging price of fuel, that adds up to a major change in car-buying patterns. Notes Rick Wainschel, senior vice president of marketing and analytics for Kelley Blue Book’s, “Gas prices have created a permanent shift in the minds of American consumers and, more importantly, car shoppers.”

The Wall Street Journal notes that the trend toward smaller, more fuel-efficient cars has even hit European premium brands like BMW. Sales of the company’s smallest models, the compact 1 series, doubled in May, then rose 53% in June and 40% in July when measured against the previous year. Sales of the automaker’s larger 3, 5 and 7 series, meanwhile, have fallen steadily for those same three months.

The increased focus on fuel economy in the minds of consumers presents an opportunity for credit unions to grow their market share by tailoring loan products that take advantage of this sea change in consumers’ attitudes. In the process, forward-looking credit unions are demonstrating once again that agility is a formidable weapon in the battle for market share.

Jane Gettens, senior vice president of operations at Holy Rosary Credit Union (HRCU) in Rochester, New Hampshire, says, “One of the biggest reasons credit unions are well positioned to take advantage of consumers’ growing emphasis on fuel efficiency is that we’re not a huge machine that moves slowly. We can develop new ideas like our current Go Green program pretty quickly, then adjust them in a short timeframe according to our members’ feedback.”

A good example of that adaptability came about after the credit union’s initial offer of a 1% APR rate reduction on the purchase of a hybrid vehicle. As the ballooning demand for hybrid vehicles resulted in a three-month-long waiting list, HRCU acted quickly to expand the program to the purchase of any vehicle that got 30 miles or more to the gallon.

“Our Go Green program is quite successful, and our employees love it because it represents a win-win situation, both for our members and for the environment,” adds Gettens. “It just shows that credit unions can do something good for members and the environment at the same time. Area dealers joined in, too, and several parked examples of their fuel-efficient models in our parking lot.”

Today HRCU’s Go Green program encompasses more than just auto sales, and even offers the premium of a free tree when a member signs up for paperless e-statements.

John Sahagian, vice president of collections for Baxter Credit Union (BCU) of Vernon Hills, Illinois, says that taking a stand on the environment is not only the responsible thing to do, but also makes good business sense.

“I think it’s important for us as Americans to reduce our dependency on foreign oil and to encourage the development of alternative sources of energy,” says Sahagian. “Currently, we offer a short-term program of discounts on loans to purchase hybrid or alternative fuel cars, but we’re also developing a long-term program that will last beyond the current surge in fuel prices.

“Acting responsibly also lets our members know that we’re doing what’s right,” adds Sahagian. “That said, we have since found that other green firms want to do business with like-minded companies. One of the additional benefits to building our new offices to be LEED-certified (Leadership in Energy and Environmental Design) by the non-profit U.S. Green Building Council was to draw us closer to Baxter Health Care, one of our major sponsors.”

With over $1.2 billion in assets, and serving more than 126,000 members in the U.S. and Puerto Rico, Baxter Credit Union is finding that responsible action does indeed pay off. This year for the fourth time, BCU earned a spot on the annual Honor Roll of the Chicago-based Center for Companies Who Care.
Unlike larger financial institutions, credit unions can also take into account regional differences to more closely tailor attractive loan offerings for their membership.

Andrea Holloway, marketing manager of Wheatland Federal Credit Union (WFCU) in rural Lancaster, Pennsylvania, explains how WFCU addresses its members’ concerns.

“The price of gasoline seems to be everyone’s main topic of conversation these days,” says Holloway. “A month’s worth of gas for many people is almost the same as another car payment. We want to help our members save anywhere we can, so we offered a Go Green program that offers a ½% discount on loans for hybrids of other vehicles that get 32 mpg or more.

“We used to charge extra for motorcycle loans, but because we’re in such a rural area where motorcycles and scooters are very popular, we’ve included them, as well.”

Myra Fick, director of marketing at TriCounty Area Federal Credit Union based in Pottstown, Pennsylvania, agrees that the ability to tailor loans to membership needs provides a definite advantage.

“In our area a lot of members have longer commutes to work, and we wanted to encourage hybrid technology, as well as save our members some money," notes Fick.
"We’ve had a 1% discount on any auto loans for hybrid vehicles for about a year now, and it’s proven to be very popular.” 

While larger financial institutions continue to struggle in the current economy, credit unions are finding ways to tap into consumers’ growing focus on fuel economy in order to grow market share.

As the National Automobile Dealers Association (NADA) said recently, “Being green is no longer about being environmentally friendly, it’s now become a necessity.”

“This article originally appeared in the fall of 2008 issue of CUDL’s Merge Magazine”.


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Nov. 10, 2008



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