September is 30 things I would implement or consider implementing at my credit union if I was a credit union leader.
Thing 18: Lay claim to being first at something
The credit union industry is better known for its conversative nature than being a group of pioneering innovators. On one hand, this has allowed credit unions to remain safe and sound in times of trouble, but on the other hand, it has also created a group of undifferentiated vanilla organizations that tend to follow instead of leading.
At my fictitious credit union we would concentrate on being first at something. Something radical and new. Something that no other financial institution has done to date.
An example of this kind of outrageous behaviour is premiering today. St. Louis-based Vantage Credit Union has just become the first financial institution to offer banking through Twitter! Here's the introductory tweet for Vantage's new tweetMyMoney service.
What I love about this innovative first is that people will have two reactions. 1. "Wow, that's awesome!" or 2. "OMG, that's stupid!"*
Here is some info from the simple mobile-friendly landing page:
We're excited to introduce the first-of-its-kind banking service via Twitter, available exclusively to Vantage members! View balances, move money and much more using tweetMyMoney.
Choose to get balances on one or all your deposit accounts
Get your 'last 5s' on one or all deposit accounts: deposits, withdrawals, checks cleared, transactions
See what point-of-sale transactions are holding in your checking account and their dollar amounts
Avoid overdrafts by making transfers from one deposit account to another... on the fly!
Congratulations are in order to the Vantage Credit Union team. I suspect this service will not only be popular with tech-savvy members, it will also attract more new members than producing yet another me-too deposit campaign.
What could you credit union be the first to do? That's the question I would spend time thinking about!
September is 30 things I would implement or consider implementing at my credit union if I was a credit union leader.
Thing 13: Drop products and services that members don't want
Ever been to a restaurant with a seemingly unending menu? Pages and pages of choices with nothing that really stands out? It feels like the menu has never been edited. I much prefer a simple menu with a handful of awesome choices. I think financial institution clients do to. Think ING Direct.
I think credit union menus tend to grow and grow in an effort to keep up with banks and other competitors. If I were a credit union leader, I would review every product and service. If we had six different checking accounts, I would want to know why. I would edit and edit until we were left with only the essentials. This would require us to define our brand and figure out who our core members are and what they really want and need.
Vancity recently edited its services in two very big ways. The leadership team looked at the insurance division and realized that only a small percentage of its credit union members were buying insurance from Vancity. After careful consideration, Vancity sold its Insurance division to the Cooperators. Vancity also looked at its cross-Canada virtual offering, Citizen's Bank, and realized that the Canadian marketplace no longer had room for an entirely online bank and decided to go in a new direction.
Editing is not easy. Especially when your organization has been around for half a century or more. It's hard. It's painful. But ultimately, it's necessary and it's good.
Tim
P.S. I know, I know. There are a lot of Vancity examples in my 30 things blog series. Forgive me, Vancity just does a lot of things really well.
Unlike the closed Apple iPhone platform, Android is an open-source software stack for mobile devices that includes an operating system, middleware and key applications. The Android SDK provides the tools and APIs necessary to begin developing applications that run on Android-powered devices.
According to Wikipedia, Android was announced almost two years ago on November 5, 2007 with the founding of the Open Handset Alliance, a consortium of 48 hardware, software and telecom companies devoted to advancing open standards for mobile devices. Google released most of the Android code under the Apache License, a free-software and open source license.
Now that there are a number of handsets from various manufacturers in the marketplace, Android seems to be gaining momentum.
And, also unlike developing an iPhone app today, you can be one of the very first financial insitutions to lay claim to publishing an Android app. Here is an article on the Net Banker blog that compares banking Apps in the Google Android Market vs. Apple iPhone App Store. As you can see, only Bank of America and Alliant Credit Union are represented in the Google Android Market to date.
If you don't have internal developers, consider partnering with another credit union to co-develop an app or look for a small independent Android app developer in your area or even look overseas to get it done.
September is 30 things I would implement or consider implementing at my credit union if I was a credit union leader.
Thing 2: develop an iPhone app
There is a lot of talk about mobile banking these days, but very little action by most credit unions on the subject.
With tens of millions of iPhones and iPod Touches in consumers' hands and a seamless way to download and install apps through the iTunes App Store, the iPhone platform represents a unique opportunity to create a mobile application that could actually get used by your members.
Before you say, "We can't do that!" The development platform and options range from the simple to the complex. It could be as simple as TDECU's CULoc8, branch and ATM finder or as complex as USAA's iPhone remote deposit capture application. If you don't have internal developers, consider partnering with a credit union that already has an iPhone app that they may be willing to license to your credit union or look for a small independent iPhone app developer. You could even consider looking overseas to India for an inexpensive way to get it done.
My point is, don't wait around for your core banking system provider to come up with a solution. Develop something useful now and then let every member know about it, teach them how to use it and also get the word out in your marketplace that you have an iPhone app.
If you have been reading our blog for any length of time, you will have certainly heard about Young & Free! It is an integrated marketing program that combines a microsite, social media and traditional marketing all centered around a Generation Y spokesperson search in conjunction with the launch of a youth-specific banking product.
Since launching the program last Fall with our founding partner, Alberta's Common Wealth Credit Union, it has exceeded all sales, marketing and PR goals in the ensuing eight months. There are now more than 1,900 Young & Free Checking Account holders in a credit union of just 52,000 members.
After months of planning including legal, trademark and licensing details, I am excited to announce that the Young & Free program is now available to credit unions throughout North America.
How will it work?
One credit union in each US state and Canadian province will follow in Common Wealth's foot steps. We will help these courageous organizations launch this exciting youth-centered program in their marketplace. And in states and provinces where no single credit union is able to take on the program, we will offer an exclusive license to a league or a small group of non-competing credit unions. Banks cannot participate.
Why go beyond Alberta?
It goes right to our purpose as a company. Simply put, it is our purpose to help credit unions deepen their relationships with members and persuade bank customers to become credit union members.
Credit unions desparately need to engage and attract young people. Young & Free is doing just that for Common Wealth Credit Union. We can imagine a day when the Young & Free program has helped credit unions add tens of thousands of members to the credit union movement.
But isn't there only one Larissa?
Larissa Walkiw is the 2008 Y&F Alberta Spokesperson and she is doing a phenominal job at creating content and connecting with young people in Northern Alberta.
Larissa is definitely one of kind. She is a wonderful multi-talented young woman. However, we believe that Generation Y is filled with extremely talented young people that are capable of excelling in their own way. Young & Free is a platform that gives young people the freedom and support to be the voice of their generation in their own region and in their own words and style.
Can you imagine the collective creative output and meaningful dialogue that all of these Young & Free Spokespeople will generate? It will be amazing!
Thanks for being a part of Young & Free from the get go
I want to personally thank everyone in the credit union blog-o-sphere. The encouragement and attention that has been given to Young & Free is overwhelming.
I must also thank Jeff Mulligan and the leadership team from Common Wealth Credit Union. Through their vision, courage and selflessness, we are able to roll out this exciting program beyond the Alberta borders. Now that's the cooperative spirit that I love credit unions for!
What are the steps to get involved?
I encourage you to explore these links to determine if this initiative is right for your credit union.
Much like William Azaroff, I have been looking longingly South of the border at all of the new peer-to-peer lending services that Canadians can't utilize. Well, I can now personally test the Canadian P2P waters with a new service that launched in Canada this week—IOU Central.
I immediately setup an account, linked it to my credit union account and I am in the lending business. The setup process was dead easy, while still offering a number of security layers including e-mail verification and bank account verification.
It felt a little odd to offer up my social security number and my bank account number to a brand new entity that I only learned about hours ago. This will be the hardest thing for most people to get over.
I have only looked at the lending side of things so far. There are about a dozen people looking for loans—everything from debt consolidation to new appliances to funding a short film. The interface is clean and simple and you can easily finance a portion of someone's loan. I am looking forward to experimenting.
It's too bad that this didn't launch with a credit union affiliation like ZOPA did in the US. If it did have a credit union affiliation, I would feel more like I just setup "Tim's Credit Union" rather than the "Bank of Tim."
I was amazed at how fast I was able to setup my account and the fact that I did not need to leave my chair to do so. Credit union leaders need to take note and take action while the bankers stick to denial.
My credit union and banking RSS feeds are full of peer-to-peer lending articles. It is early days and everyone is sussing out where P2P lending fits into the financial services landscape. If this topic is new to you, here's a Wikipedia definition:
Person-to-person lending or peer-to-peer lending is lending done between individuals circumventing the bank's traditional role in this process.
Community lending had the advantage that people's interpersonal relationships fostered increased fiscal responsibility. The risk was that without the benefit of diversification, when something went awry the entire community could suffer.
Lending through banks has benefited from scale and diversity. By pooling the available money supply and lending it out again, the impact of any one default would be trivial in light of the timely payment of the vast majority of the notes. The downside to this model is that it has introduced greater transaction overhead and removed community loyalty from the equation.
New ventures are seeking to blend traditional practices with new scale economies via online marketplaces. The marketplace serves many functions. Most notably it facilitates bringing borrowers and lenders together. Furthermore, it simplifies what might otherwise be a cumbersome process to properly document and service the resulting loans.
It is hoped not only that these new markets will be more efficient by removing the bank as middleman, but that factors leading to default can be mitigated by reintroducing a social component to the mix.
How does P2P lending affect your credit union? I believe it will have a huge impact in the not-too-distant future. You need to understand it and develop strategies to embrace it. It should not be ignored.
This feels like déjà vu. The emergence of P2P lending is eerily reminiscent of the early peer-to-peer music sharing days. Out of nowhere, a very young Shawn Fanning introduced Napster and the recording industry was changed forever.
Replace the young Shawn Fanning with the older, wiser and richer, Richard Branson, replace music with money and replace illegal with above board and you get the picture of the potential impact that P2P lending will have in the financial services world.
The music industry's answer was to use the law to take down Napster, use digital rights management to throttle the inevitable tidal wave of file sharing and litigate against the common man in hopes of striking fear into the general public.
This took the music industry's eye off the ball as legitimate players like Apple's iTunes, Rhapsody, eMusic and Amazon swept in to fill the void. The ultimate victor in this bloodbath is the consumer with ease of use and instantly available legitimate access to music. Mega record stores are soon to be a thing of the past.
What can we learn from this parallel musical universe? Where will your credit union be after the P2P lending music gets cranked up to 10?
Shifting gears from the January Blogging and Social Media Lovefest™ that our CU Brand Blog turned into, I am back to talking about branding and marketing. That should make more than a few people happy.
In two short years, Coast Capital has grown by 44,500 members (this is not a typo). With a spot-on, locally relevant brand position, a game-changing product and an ad agency who pushes them to the edge, Coast Capital has all of its competitors shaking in their boots.
Coast Capital has a simple recipe for success. The smart marketing folks discovered what was missing from the marketplace, filled the hole with a highly relevant and attractive solution and, finally, promoted the solution consistently over time with tremendous creativity and attitude. People love or hate Coast Capital's advertising—which is preciously the point.
Pretty darn impressive to watch from the sidelines. Kudos to all involved.
In our CU Branding 101 series, I have expressed my opinion that credit unions are undifferentiated. To add to the confusion, there are actually three levels of undifferentiated consumer-facing credit union brands you as a credit union marketer have to deal with!
The category: The credit union movement brand
The organization: Your credit union brand
The offer: Your product and service brands
Let's look at the impact that each level has on your credit union.
The credit union movement brand
After more than a century there is still a lot of misunderstanding about what a credit union is, what makes a credit union different and why that difference matters.
When we ask the general public to describe what a credit union is, we get responses that range from a shrug to credit unions are like banks, only smaller. A small percentage of folks will indicate one or two of the following: cooperative, member owned, involved in the community, great service, local decision making, friendly people, not-for-profit, too small, employer sponsored, exclusive and less sophisticated than banks.
To those that do understand what a credit union is, the credit union movement brand does have an impact on your credit union brand. The credit union movement brand creates a pre-disposition to be open to or closed to what your credit union has to offer. That is it. Nothing more, nothing less.
Your credit union brand
If most people don't understand what makes a credit union different from a bank, even less people understand what makes your credit union different from another credit union down the street.
In a competitive environment, your credit union not only needs to be perceived as different than the banks, it also has to be different from other credit unions in your marketplace. The little known category differentiators go out the window when folks are asked to identify what the difference is between competing credit unions.
Your product and service brands
And finally, if people don't understand what makes a credit union different from a bank and what makes your credit union different from the credit union down the street, then they really don't understand what makes your credit union's products and services different from everyone else's.
That's because credit union product and services aren't significantly different. This is why the financial services industry has been reduced to a commodity where most decisions are based solely on price.
With so little understanding, at what level should credit unions invest in brand building and marketing?
The category. Should we promote the credit union movement brand? No. Let's skip category differentiation. The credit union difference just isn't different enough to throw millions of dollars at. After 100 years, either people get the difference or they don't.
In the US, there is a heated debate going on about whether to mount a national credit union brand awareness campaign. Here is a link to a CUNA Marketing and Business Development white paper on the subject and a great post and comment string on Open Source CU to give you more background.
Judging by provincial and state credit union promotions, credit unions can't decide on one compelling difference to promote consistently. There is no 'Got Milk' campaign waiting to be discovered. And to be frank, promoting nationwide ATM access doesn't exactly excite the masses.
Again, remember that the only thing that branding and marketing at the category level is capable of is create a pre-disposition for against considering a credit union. Almost no sales or membership growth will come out of marketing and branding activity at the category level.
The organization. Should you promote your credit union brand? Yes, you should discover and articulate your credit union brand internally and live and breathe your brand externally. Every employee and member needs to know what makes your credit union special.
No, you should not mount a brand awareness campaign to promote your difference. Brand-only advertising for a credit union is a waste of money. Again, almost no sales or membership growth will come out of marketing and branding activity at the organization level.
The offer. Should you promote your products and services? Yes, but only after you have defined a unique brand strategy and everyone in your organization understands what makes your credit union different from every other competing bank and credit union in your marketplace.
This is the time to create unique and desirable products and services that support your brand and that fill a hole in your marketplace. Only through a complete market analysis and brand strategy process can real product innovation emerge.
The offer is where the rubber meets the road. In our experience, the greatest benefits come from promoting a highly differentiated product or service. In doing so, you are promoting the offer and your organization—the two brand levels which matter most to your credit union. Sales and membership growth happen when you invest in marketing and branding activity at the offer level.
A real world example to prove my point
When we ask credit union marketers to list brands that matter, Apple is always included in the list. Think about this. Apple does not promote the category or the organization, Apple promotes its offers: the Mac, iPod, iPhone, Apple TV, iTunes, iLife, Mac OSX and Final Cut Pro to name a few. Through product innovation and consumers' experience with Apple's products (the offer), the Apple brand is built and propelled forward. The offer is where the money is made and the brand is built.
Back to the title of the post: Could your credit union cause a freakout?
Below is a video that is part of a new Burger King promotion, "The Whopper Freakout."
The category: Fast food
The organization: Burger King
The offer: The Whopper
Watch this video and then ask yourself, does your credit union have an offer on its menu that members are so passionate about that, if removed, would cause a massive freakout? Does your credit union have the equivalent of a Burger King Whopper?
Boy, that was a long post to prove a simple point. Offer great products and services and the rest will take care of itself.
Tim McAlpine
