Can Banks Learn from Credit Unions? Yes They Can.

Credit union grassroots marketing is turning bankers green with envy.

 
 

Credit unions received quite the compliment from American Banker last week: A front-page headline and a story that spanned one-and-a-half pages on the buzz credit unions are creating through their Gen Y online marketing campaigns (“Lessons for Banks from CU Campaign”). The article focuses on the Canadian-launched Young & Free initiative, which identifies young credit union “spokesters” through a social media contest reminiscent of reality television competitions such as “American Idol.”

Credit unions across the United States that are participating in Young & Free are reporting notable successes. Tennessee-based ORNL Federal Credit Union ($1.3B) reports a 50% increase in Gen Y members since it launched the program in 2010 (the credit union now has approximately 3,000 Gen Y members), and South Carolina Federal Credit Union ($1.3B, North Charleston, SC) sets aside 10% of its marketing budget for Young & Free, which has helped the credit union grow its 18-to-25-year-old membership from 4% in 2008 to 9% now. (The article cites a Javelin study that found only 11% of Gen Yers count a credit union as their PFI).

Although only one credit union per state is allowed to participate in the Young & Free-branded campaign, the initiative certainly offers best practices for any credit union. This is where the real power of being a local institution lies.

Best Practice No. 1: Don’t strive to be something you’re not.
The success of Young & Free is largely tied to its sincere messaging and identification of a spokesperson that resonates with young members. Messaging and spokespeople shouldn’t have to rely on a gimmicky façade to promote an institution’s benefits; they should just tell it like it is. (For some non-Young & Free inspiration on how to find a spokesperson in your community, check out Show Some [Bubba] Luv).

Best Practice No. 2: Be proud of your roots.
As locally owned cooperatives, the goals of credit unions typically align with the goals of the community in which they operate. Likewise, for a social media campaign to resonate, it should align with the institution’s goals. Drawing a direct link between what a social media campaign is saying and what potential members are seeing in the community isn’t terribly difficult for credit unions, and that community dedication is appealing for the socially conscious Gen Y demographic.

Best Practice No. 3: Walk the Talk.
Marketing will entice members through the door, but it is superior products and services that will keep them at the credit union. Along with its Young & Free participation, Michigan First Credit Union ($567.4M, Lathrup Village, MI) offers a special checking/savings combo solely for its 18-to-25-year-olds. The fee-free product offers two overdraft waivers per year and a 1% discount on an auto loan.

 
 

March 31, 2011


Comments

 
 
 
  • Bravo on a timely and informative topic. Beyond marketing campaigns, it is important that credit unions and banks stay the course to keep their members/customers first and to communicate to them often through traditional, grass roots and social media mediums.

    To your point--"Marketing will entice members through the door, but it is superior products and services that will keep them at the credit union"--LT Public Relations advocates developing a closer "relationship" with the valuable members/customers they serve. An ongoing communications (not necessarily marketing)effort is critical. Taking a page from Zappos playbook, "Customers first…and the business will naturally be successful."
    Casey Boggs