Pay it Forward and Backward Now!

In The Financial Brand's article Credit Unions, Here’s That Awareness Campaign Everyone’s Been Waiting For, editor Jeffry Pilcher is advocating a national pay-it-forward campaign.

What if one day, every credit union in the world sent out representatives to perform hundreds of thousands of good deeds, nice gestures and other random acts of kindness?

Jeffry is suggesting that International Credit Union Day in October 2012 would be an ideal day to make it happen. I really like this idea and think that credit unions could really make this happen.

But what if you took it up to a whole other level and made it happen now? I mean right now!

Last week during our Marketer Meet-up, we split the attendees into three teams and tasked them with coming up with a compelling member drive campaign concept. One idea that struck me as exceptional was the notion of offering a rebate for an overdraft fee from a competing financial institution! Bring in a statement that shows the fee, move your primary checking account, sign up for at least three services including direct deposit of your paycheck and the credit union will credit your account up to a maximum of $25.

Credit unions are notoriously afraid to ask for the business, but this approach would make the conversation so much easier and natural. Credit unions would essentially be saying, "Hey, your bank won't give you a break, but we will. In fact, we'll pay you back for that thing they did to you that has brought you to this boiling point."

Photo by Ninja Cherepashka

Now imagine combining this rebate concept with the pay-it-forward concept and organizing a street team to decend on the Wall Street protesters right now. Print a wallet-sized promo and insert a $10 bill to pay forward and a voucher explaing the overdraft fee rebate. CUNA or the Credit Union Association of New York could rally all area credit unions and make this happen right now.

It would receive positive national media attention and shine a light onto the differences between banks and credit unions.

Credit unions are exactly what millions of disenfranchised, educated young adults are looking for, they just don't know credit unions exist. 

What do you think?

Tim

Scary big idea 2: Take a chance on a game changer

In October, I started a blog category called scary big ideas and proposed the concept of affinity positioning for credit unions. It was well received and sparked great dialogue within the comments. It also inspired a lead article in the December 3rd issue of The CEO Report.

Reporter Aaron Steinberg interviewed me and did a great job expanding on the concepts that I proposed in my blog post. Aaron examined the regulatory issues surrounding the concept and looked at various examples of actual credit unions marketing themselves based on affinity. You'll need a subscription to read it.

I was amazed at how throwing an idea out there took on a life of its own. That has lead me to another scary big idea that I have been thinking a lot about lately:

Why not take a large percentage of your annual marketing budget and invest it in a radical, game-changing initiative that no other competing financial institution is doing?

Challenging the status quo

If you have been reading this blog for any length of time, you will know that I believe credit unions are severely undifferentiated. The general public (and a number of your staff) have a limited understanding of what makes a credit union different from a bank and they have no understanding of what makes your credit union different from the credit union down the street.

To perpetuate this sea of sameness, financial institutions promote the same products, the same services and the same competitive rates during the same times of the year.

The typical credit union marketing plan looks like this: retirement promotion in Q1, lending promotion in Q2, quiet in the summer and finish up with a deposit promotion in Q4. Throw in some direct mail here and there and the plan is good to go. Oh, don't forget to give away a few iPods while you're at it.

Best practices leads to mediocrity

I also believe that there is a best-practices mentality that has infected the credit union world. Unless a concept is proven with white papers and formal case studies in multiple trade publications or spoken about over and over again on the conference circuit, very few credit union leaders are willing to be the first to try anything untested.

So what's the next game changer?

With every financial institution looking and behaving almost identically, it doesn't take much to change the game. The first step is to really understand your marketplace. Study what your competitors are doing and look for unmet opportunities. Here are some categories to consider:

1. Social media. Definitely a hot topic. Everywhere you turn it's Facebook this, MySpace that, blogging, social networks, Twitter, user-generated content and on and on. The thing is, there is still plenty of time to get involved. By and large, credit unions have been very timid and slow in putting their social media strategy together. You can still enter the social web now and be seen as a pioneer in your marketplace. Think beyond just online conversation. How can your credit union create a unique product or service that can be marketed through the social web or how can your credit union impact societal change through the social web?
2. Alternative lending. Look at the headlines that the six US credit unions that have partnered with Zopa are garnering. This new peer-to-peer media darling is just one example of a new lending concept that has caught the public's interest. What else is out there that you can attach your credit union to?
3. Mobile banking. Most credit unions are watching this trend pass by. Hiding behind studies that tell you that no one is interested in mobile banking is one way to go, but why not get out ahead of the curve and have your banking system ready for the mobile explosion?
4. Generational marketing. "How do we attract Generation Y?" is the question of the day. One way not to attract them is to ignore them and keep going with your status quo promotions. Change the game in your marketplace by doing something unique. How are you investing in your credit union's future members?
5. Online personal financial management services (PFM). Another hot topic. Is your credit union's banking system leveragingWesabe and Mint and the other emerging PFMs? I keep waiting for a credit union to stand up and promote these services. I think there is a great opportunity for a member acquisition campaign around this concept. 
6. Your brand. When was the last time you updated your brand strategy? What's that? You don't have one? This may be the year to steal from your promotional budget and consider investing in your brand. You could actually take the time to understand your marketplace and position your credit union as an attractive alternative.

These are just a few idea starters. Check out the Filene Institute or simply follow the Net Banker blog and you will see what game changers are on the horizon. Your game changer just needs to be more original and interesting than another 4.0% 18-month cashable term deposit promotion!

It doesn't take much to change the game. All it takes is actually doing something different and interesting.

Tim

Scary big idea 1: Affinity positioning for credit unions.

This is a new category: scary big ideas. I was going to call it "wild ideas that credit unions will never go for, but should, because these ideas, if executed with courage and commitment, would really fly" but it was too long and wouldn't fit in the category menu.

Think of this new category as a fringe third-year course taught by an eccentric that doesn't have very many students.

Some background on this scary big idea

There is a general consensus that credit unions need to be bigger and need to have an unlimited field of membership to compete. So the once tightly defined fields of membership have given way to the new looser, we-are-open-to-everyone fields of membership.

For many credit unions that have made this jump, there is a sense of surprise and wonder that this new openness has not yielded hoards of new members flocking in to open new accounts and move their mortgages.

So, the next conclusion drawn is to offer better rates, free chequing accounts and free George Foreman grills to compete in these highly competitive multi-credit union markets.

What if there was another answer?

What if the decision to become more open was flawed? What if when an original field of membership is deemed to be irrelevant and unsustainable, we redefined an equally tight, but more relevant field of membership?

What if we defined our fields of membership by affinity?

Here are some dictionary definitions for affinity:

1. A close connection marked by community of interests or similarity in nature or character.
2. A natural attraction or feeling of kinship.
3. A natural liking for or attraction to a person, thing or idea.
4. A person, thing or idea for which such a natural liking or attraction is felt.

When I think of large groups of employees or even neighbours, there is very little shared affinity. The relationships we have with our coworkers and neighbours are not based on shared passion, they are based on mere acquaintance: "Hey Bob, how was your weekend?" "Fine, Dave, how was your weekend?" "Fine."

Huh? What the heck am I talking about?

Put all of the "it will never happen" thoughts that are racing through you mind aside and think like the CEO of a start-up for a second. If you opened a new credit union today with no members, how would you go about building your business from nothing? This new credit union would have be highly differentiated with a story so compelling that a select group of very passionate early adopters would promote it for you. Your new credit union would need to build around shared affinity.

Here are some ideas for narrow affinity based fields of membership

1. Ladies-Only Credit Union. Tony Mannor had a discussion going on his CU Hype blog about a credit union based entirely on pink targeting women. This is the type of idea that I am talking about here. However, Tony also suggested "to co-brand a secondary colour like chocolate brown or black to appeal to men." This is exactly what I am not talking about here. You have to deliberately limit your field of membership to appeal to an affinity group. To make our Ladies-Only Credit Union really fly, we could donate 20% of operating profits to fight breast cancer. Wouldn't you take a possible target of 50% of the population?
2. Golfers' Credit Union. Imagine a credit union only open to golfers? Golf vacation loans. A roaming PGA golf pro on staff available for free lessons. Branches with a club-fitting corner. A rewards program based entirely on golf including vacations, clubs, attire and green fees. ATMs located at golf and country clubs. Member tournaments. The ideas are endless. Golfers are affluent and the word of mouth promotion would be incredible.
3. Bloggers' Credit Union. Members would have to a have an active blog or podcast. With Technorati ranking more than 10 million active blogs, there are more than enough bloggers to float a credit union. Get a few on side and let the viral nature of the social web take care of new member acquisition. Add in members of MySpace, Facebook or YouTube if just bloggers is too limiting for you.
4. Emo Credit Union. OK, maybe this is a little narrow (or weird), but music fans have undeniable shared affinity. Rewards could include music memorabilia, concert tickets and back-stage passes. (I stole the emo idea from Brent Dixon and Charlie Trotter).
5. Vegetarians' Credit Union. Motorcyclists' Credit Union. Adventurists' Credit Union. Naturalists' Credit Union. Parents' Credit Union. Little Peoples' Credit Union. Dog Owners' Credit Union. Save the Earth Credit Union. Nudists' Credit Union.

I could go on and on. My point is that affinity has incredible power, more so than shared geography, shared demographics or a shared employer and affinity has nothing to do with the highest or lowest rates. You products and services would simply have to be competitive, not earth shattering.

Before you cast this crazy idea aside, consider the affinity and passion that Harley Davidson owners share. Or the affinity and passion that Apple computer owners share. Affinity could be the next killer app for credit unions.

Or, you can tell the eccentric teacher to put a sock in it! What do you think?

Tim