Credit unions don't need all the new bells and whistles to thrive in today's marketplace, but they do need to take a new look at old business models.
We’ve already covered the bankruptcy of Blockbuster several times in Off the CUff (see the Business Breakdown from June 20, 2011, and Roll With The Changes). The departure of the international titan of video, DVD, and game rentals from the business space created an open niche for an innovative movie rental concept. To succeed, however, the next iteration of “Blockbuster” must adapt to today’s market and be prepared to adapt to tomorrow’s market as well. That model might already exist.
This summer, The New York Times wrote about the unusual yet successful repositioning of Vidiots, a Los Angeles video store that foresaw the demise of Blockbuster and crafted its own strategy to thrive in today’s video distribution market. The store offers “Film Studies” classes for customers who want to learn more about their favorite genres. And its lectures by independent filmmakers draw attention to the store and keep enterprising movie makers in the market. Vidiots is an active, physical space for movie lovers to gather and discuss everything from anime to Goddard. By rethinking the tired rent-and-leave business model, the video store has managed to attract a whole new market of movie lovers and has become a community hub for area cinephiles. This kind of engagement was lacking in Blockbuster’s model and online sources, such as Netflix, could never compete with Vidiots’ face-to-face experience
There are several best practices to take away from Vidiots. Differentiating your products from the competition’s products is just one step in competing in today’s environment. To win in the current marketplace, you must make it personal. Identify the needs in your area that the bank across the street cannot (or will not) fulfill. Think free checking, hands-on member service, and competitive rates. Then take that one step further and ingrain yourself in your community. Become the center for all things personal finance. Use that positioning to stay competitive and attract more business. Hosting events and offering much-needed products and services facilitates an open, inviting atmosphere for members and encourages them to engage not only with the cooperative but also with one other. And such a spirit of camaraderie could be the final push that makes your credit union a true community partner.