Why "Credit Union" is Not a Brand

Does your credit union spend its precious marketing budget trying to differentiate itself from banks? Ironically, credit unions across the country often define themselves by what they are not. What consumers need to hear is what makes your credit union unique.




Too many credit unions are content to simply be a credit union. Of course they are credit unions, but I'm referring to the marketing position of their brands. The advertising messages inform consumers that they are credit unions, something the consumer already knows, but neglect to say much more. From the consumer's point of view, your credit union status is not a brand. It is an industry category.

Many of the credit unions we speak with struggle to see themselves as more than a credit union, yet consumers crave differentiation. The fact that you are a credit union merely establishes that your organization is part of the credit union industry, in the same way McDonalds is part of the fast food industry. What consumers want to know most of all is what kind of credit union you are.

By now, consumers have a general understanding of the differences between a bank and a credit union. Of course there are many who don't understand, and there will always be a need to inform consumers about these distinctions. My primary concern is for the credit unions I see embracing their industry category as though it were their own brand. As a result, these credit unions' own uniqueness is lost and they become a commodity.

Imagine if this approach were used in other industries. What if Taco Bell marketed itself merely as a fast food restaurant selling the convenience of its drive-thru and the affordability of its menu? Consumers would have no information to discern the difference between Taco Bell and other fast food restaurants. The real uniqueness of Taco Bell's brand would be lost. However, by positioning itself as the alternative to burgers ("Think outside the bun"), it gives consumers a reason to choose Taco Bell over every other fast food restaurant. The same scenario is true for other industries. Old Navy must distinguish itself from other retailers. Motel 6 must carve out a unique position among hotels. And your credit union must build a brand that differentiates it within the credit union industry.

Many credit unions find this strategy difficult in a cooperative model. They feel conflicted, as though they are not supporting the team. Yes, in some ways credit unions should work together. Pooling resources and collaborating helps everyone. But when it comes to marketing, too much collaboration can lead to commoditization. Consumers have dozens of banks and credit unions to choose from, all within a few miles of their home. If your credit union doesn't speak up and communicate its competitive advantage, consumers will gravitate to another credit union that does.

We are in a cooperative industry that must survive in a competitive marketplace. You are not throwing your credit union colleagues under the bus by building your own credit union brand; you are simply giving consumers a clear picture of what makes your credit union unique from others. By building your brand, consumers will have an easier time choosing the credit union that can best meet their personal needs.

To build a distinct brand for your credit union, you must identify a point of differentiation. Here are a few possible areas for you to consider:

1. Product differentiators

When searching for areas of uniqueness within your credit union, it is important to separate products into two groups: custom and commodity. The fact that you offer a checking account is not unique. However, if you offer a high-yield checking account, that is more unique. If you dig a little deeper, you might find that your high-yield checking offers a feature or two that no one else in your market offers. Now you have something to work with. Many credit unions are experiencing success by developing new and unique variations of standard products that give them a competitive advantage in attracting new members. Technological advancements are also creating opportunities for delivering traditional products in new ways.

2. Service differentiators

Credit unions often talk about how friendly they are, promising better service than banks. While I believe this to be true, it isn't a differentiator for your credit union if all credit unions do it. Besides, consumers want you to be more specific. Identify services that you provide that are unique or that you deliver in a unique way. If all credit unions walk new members through the process of joining, maybe your credit union offers the added convenience of going to the new member's home or place of work. Whatever unique services you offer, provide a compelling reason for someone to join your credit union.

3. Organizational differentiators

If the products and services you offer are similar to other credit unions in your market, you may find differentiators by looking at organizational attributes such as history, SEG groups, location, or others. If you are the only credit union to serve school employees, than build your brand there. If you are the oldest credit union in town, build a brand of experience. Whatever the uniqueness, there is opportunity to highlight your credit union's strengths and giving prospective members a clear reason to join.

4. Integrating the message

Identifying the point of differentiation is the first step toward building a brand. Next you must launch the brand. For the message to be most effective, it must be consistent externally (advertising) as well as internally (customer service and sales). When preparing your marketing message, take care not to fall into the trap of selling the credit union industry over your own unique brand. Here's your chance to become a leader in the credit union industry as opposed to blending in.

Gazillion & One is the brand consultant to credit unions. We help cooperatives compete in today's financial services industry through brand differentiation. To learn more about our diagnostic approach to marketing and advertising, or to receive a free subscription to our monthly paper FOCUS, visit www.gazillion1.com. For more information, contact Brian McCormick at (888) 301- 2823, ext. 107 or bmccormick@gazillion1.com.




Sept. 28, 2009


  • 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.
    Jeffry Pilcher | TheFinancialBrand.com
  • 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.
    jp moore
  • 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
  • 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.
    Chuck Van Court