Why Credit Unions?

Why Credit Unions?

Credit unions are different from other financial institutions through their ownership structure if nothing else.  One-member-one-vote will never be adopted by an investor-owned financial institution, they exist for a difference purpose, maximize shareholder value.  Their purpose is not better or worse than the purpose of a credit union, it is simply different.

And yet most consumers and many credit union members can not tell the difference between a credit union and an investor-owned financial institution.

I believe if credit unions promoted their WHY rather than their WHAT to consumers, the difference will be obvious and sustainable.

Does your WHY sound like this?

“We believe people will make better financial decisions when they have easy access to information they need and want.  Everything we do is borne from the passion to help our members and their communities make smarter decisions and live better lives.”

“We do this by providing easy to understand, valuable information in ways that  engages people to take action.”

Don’t you think this “WHY” is a better way to differentiate a credit union than the old, worn-out mantra of ‘better rates, lower fees, better service’?

Credit union marketers challenged by a credit union leader.

Jim Blaine, CEO of the $30 billion asset, State Employees’ Credit Union wrote an article in 2015 that really hit me Credit Union Marketing…SOS regarding the ineffectiveness of credit union marketers.  In part he said, “We’re losing the ‘war’…we really are…all of us.  So many members are still ‘going astray’ much to their financial detriment.  I’m tired of losing, aren’t you?  If credit union marketing is so wonderful then why are payday lenders growing faster in your market than your credit union?  Why is the credit union marketing message being ignored…or worse not believed?”

I believe he makes a great point.  The problem is, credit unions rely on the same story as other financial institutions.  Credit unions promote the same three things: 1) We have great rates, 2) We have amazing service, 3) We have great products.  The value proposition boils down to; “You will save money on the products you use and we’ll treat you better.”

The value proposition touches the head, not the heart.  Loyalty lives in the heart.

In order to have a more successful future, many credit unions need to change the narrative, they should include their members in the stories they tell and how the credit union played the role of a knowledgable advisor. The new value proposition needs to be more like; “We will help you make better decisions about financial services so you can live a better life.”

This role fits perfectly with the cooperative principles that make credit unions unique in the financial services market.  I believe there is a shortage of credit union leaders who trust these principles are a competitive advantage.

What do you think?

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