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Marketing a merger

How should marketing communications be framed when a smaller credit union merges with a larger one?

Mergers can be a delicate dance. They allow credit unions to build economies of scale, with the larger partner gaining access to new markets and the smaller credit union now able to offer members a vastly expanded range of financial services.

Alterna Savings and Credit Union (166,000 members, $8 billion in assets) has successfully wooed a number of smaller partners, thus expanding its footprint across Ontario. The most recent merger was with Toronto-based City Savings Credit Union, marking Alterna’s fourth amalgamation in the past three years. City Savings and Toronto Municipal Employees’ Credit Union provides a Toronto presence, while a merger with Nexus Community Credit Union opened markets in northwestern and southwestern Ontario. Alterna’s reach also extended east into Peterborough, Ont. after teaming with Peterborough Community Credit Union.

The CEOs of Alterna and City Savings discussed how they framed their merger messaging.

City Savings’s Raymond Wood had long planned to negotiate a merger to ensure his credit union would be sustainable in the long term. There was no rush, however, so he took his time, kept an open mind and spoke with several potential partners. “We’ve had a number of credit unions contact us over the past seven or eight years but it never progressed until we met with Alterna,” Wood says.

Alterna came to the table with a 110-year legacy and a strong track record of successful mergers. “Potential partners can look to each and every one of our previous mergers and see how we’ve maintained the staff, we’ve maintained the locations, we’ve listened to our partner’s needs and invested in areas they had wanted to prioritize but didn’t have the funds to do so,” says Alterna CEO Rob Paterson.

Indeed, the City Savings board was so impressed with Alterna’s brand and reach that they adopted the Alterna name as part of the merger, allowing two-branch City Savings to capitalize on a known and respected brand. “By taking on the Alterna name, we felt we would have more potential to grow,” says Wood. “We wanted people passing by to realize that our branches now have all the advantages that Alterna has to offer.”

Though City Savings members were open to a merger, Wood and his staff still made it a priority to accentuate the opportunities, speaking to members personally when they visited branch offices and promoting the merger through their website, on Twitter and Facebook, as well as the credit union’s paper and electronic statements. He recognized that the 1,500 members might need reassurance that their personal connections with his smaller organization would remain. Wood found that members were most concerned that the current branch locations would remain open; they wished to maintain the convenience of their over-the-counter business transactions.

City Savings staff allayed these worries while pointing out that the merger with Alterna would allow their favourite branch to offer better competitive rates and more comprehensive financial planning services. They’d also enjoy call centre support and access to branches across Ontario. Finally, Alterna’s larger purse meant there would be more financial and marketing support for community projects that staff had been eyeing for years. Both credit unions “took care to emphasize that City Savings will still be doing what they’ve always done but with a big support engine behind them,” says Paterson.

The larger lesson in this merger turned out to be that members and staff at both credit unions were fully supportive] because the two organizations are likeminded in their philosophy and style. “At the end of the day, we’re partnering with community-focused credit unions to make us all stronger,” says Paterson. “We want to get the good in banking into as many Ontario communities as possible.”

And that’s a goal that’s easy to market. ◊