Community chartered credit unions now make up over 20% of all charters. Since year-end 2000, the potential membership base for credit unions over $50 million in assets has expanded by 150%. During the same period, these credit unions have only grown members by 13%. Credit unions have yet to realize the opportunity for potential members.
There are however, community credit unions finding success with member growth. Neighborhood Credit Union in Dallas, TX ($226 million in assets) is one example. The credit union, formerly Dallas Postal Credit Union, expanded to a community charter in 2000 and changed its name in 2001.
The credit union’s goal is to become part of the community, not just a financial institution with products and services. Neighborhood is reaching out through branch expansion, active participation in community events, and direct marketing.
I recently had the opportunity to speak with Mark Arnold, senior vice president at Neighborhood. Below he shares his insights and advice about Neighborhood’s experience since expanding its charter.
Mass media doesn’t look like it is a focus in your marketing strategy. Is that true? If so, why isn’t it a focus?
We have done some on a limited basis. We run newspaper ads in smaller publications on a frequent basis (about a 26 week run for the year). We have done some radio (six week weather/traffic buy on about 20 stations). It is not a major focus due to costs/expense. We feel we get more bang for our buck with community events, incentives and our own customized events. While we would like to do more media, it is somewhat cost prohibitive.
What challenges have you faced?
Controlling costs; obviously giving those types of incentives is expensive.(Neighborhood employed a member referral program and offers new member incentives.) In the best of worlds we would recruit new members without the incentives. However, many people won’t act without the offer. Also, competing in several different markets in the Dallas/Fort Worth metroplex has spread our marketing initiatives thin at times.
You changed your name in 2001 from Dallas Postal Credit Union to Neighborhood Credit Union. How have you developed your brand?
Developing the brand is a long-term process. First we focused on the name change. Then we leveraged that name to help with member growth (the name communicates membership eligibility). Now we are focusing on what the name means. We are using the slogan “building relationships in your neighborhood” because we want Neighborhood Credit Union to be about the members having a relationship with the credit union and not about a financial institution with just products and services.
It's been five years since your community charter - what have you learned? What advice do you have for credit unions that have recently expanded or are looking into it?
Do your research. Make sure the communities you are trying to reach match your field of membership (blue collar or white collar, technology or factory, etc.).
Find your niche. Do not try to be all things to all people. Find the best market or niche you can serve and then do it at an excellent level.
Use the following formula: brand + frequency + testimonials + offer = growth (you have to have a strong brand + use media/direct mail on a continual basis + have others tell your story + have great offers/incentives and then that will lead to growth). If you miss one of those factors in your equation, then you will risk not having the growth.
More information about community credit unions successfully gaining members and establishing a presence in the community is available in the webinar recording YOU CAN JOIN! Fostering Member Growth with a Community Charter, sponsored by the Callahan Center for Credit Union Leadership.