This article originally appeared in the September issue
of the Callahan Report.
Credit unions built themselves mainly around workplace sponsors. Their core
members were the persons who were employed by the sponsor and who deposited
their savings at their workplace credit unions.
The single-sponsor model has largely disappeared, giving way to conglomerations
of fields of membership, even “open” charters.
But that is not the only thing that has changed about the face of present-day
credit unions. Credit unions today are also witnessing a migration of core members
away from the workplace and into what might be called post-employment. These
are the pre- and present babyboomers who recently have, are now, or soon will
be ending their primary careers and taking up something new. Persons in their
fifties now opt for early retirement, move to the country and seize upon a new
career, from running a bed-and-breakfast to consulting to teaching to volunteer
I know of one credit union where only one-third of the members are working
in sponsor factories and offices; the remainder are scattered. The funny thing
is that this credit union has not responded to that reality; its service centers
and focus are still squarely aimed at the persons in the sponsor’s workplace.
This credit union and others should adjust their sites. Core members are becoming
what I might call the post-employed. But they have a huge need for financial
services, maybe more than at any other time of their lives – their peak
income years may be over, but their peak net worth period is definitely not.
Retaining and Engaging the Post-Employed
How do credit unions engage the post-employed? How do they add value to their
financial lives? How do they “follow the member” during this huge
There are a number of ways. I think one is shared branching. I know from experience
that many post-employed have moved from California to such neighboring states
as Oregon, Nevada and Arizona. But they can connect with their original credit
unions through shared branching. I stay connected with my credit union Patelco
through shared branches near my home in Nevada. Shared branches allow me and
people like me to stay loyal to their life-long credit unions.
Another way to “follow the member” in this instance is to offer
and improve products the post-employed can use. These include investment services,
IRAs, market-leading CDs and the like. Credit unions need to be sensitive to
the fact that members are likely to have several jobs over their working lives
and that they are going to require continuity for their retirement equity. Credit
unions can provide this. Credit unions should be offering especially helpful
wealth builders and IRA products like Roth IRAs.
They should also be working hard to remind their post-employed members that
the likes of Roth IRAs or education accounts can be established for their children
and grandchildren. Many a grandparent has visited grandchildren only to find
their rooms filled with toys and games and thus becoming bewildered about what
sort of birthday or holiday gift could possibly add to this cornucopia of entertainment.
The solution to their confusion is establishing Roth IRAs, college plans or
other accounts for these progeny. Such programs both help the post-employed
manage their money and build better lives for the offspring.
Circular Lifecycle Marketing
This last effort does double duty. It not only provides needed services to
the post-employed, but also if done right it attracts and retains the people
who represent the future of the credit union itself, that is, the younger members
and younger potential members. The older members introduce the younger ones
– the members of their own families – to the products, disciplines
and responsibilities of the credit union movement.
The post-employed, the persons who joined from a sponsor workplace and who
put away savings for years with the credit union, are the credit union’s
most loyal members. If the credit union can serve them well and if it can educate
them to opening savings plans for their children and grandchildren then the
credit union has instigated a whole new dimension to lifecycle marketing.
All credit unions are worried about attracting new and younger members. They
cogitate over lifecycle marketing, that is, attracting persons while young and
retaining them through all cycles of their lives, from first car loans to IRA
distributions. Here is a way to convert lifecycle marketing from a linear mindset
to – as it should be – a circular one. The older loyal members provide
the seeds to the younger generation, passing on – recycling if you will
– the credit union message to coming generations.
Such offerings as “family tree specials” can stimulate the post-employed
into establishing accounts for their younger family members. By introducing
credit union advantages to the younger set, the older members not only promote
financial stability for their kin but also a future for the credit union.
That’s really a win-win situation.