Conventional wisdom has it that credit unions must set themselves apart in the financial marketplace. They often seek to differentiate from the big banks – to play up their distinctiveness in the face of their just-out-for-profit counterparts. Certainly, that’s the approach of American CU marketing guru Mark Arnold.
“If you are copying your competition, or trying to promote your offering as one that’s better than your competition, all you’re really doing is reminding people who your competition is,” he recently wrote. “Plus, when you offer the same thing everyone else is offering, price becomes less important and you become a commodity.”
Brian Torsney, president of Play Advertising, based in Burlington, Ontario, agrees – but up to a point. Torsney, whose agency services FirstOntario Credit Union ($1.9 billion in assets, 88,000 members) believes differentiation is important enough. However, he says credit unions need to gain potential members’ confidence to get them through the front door in the first place.
Show your strength
“I’ve worked on campaigns for financial services institutions for more than 20 years,” he says, “and what I’ve found in research and in focus groups I’m working on for FirstOntario is a paradox that appears all the time. Canadians like their institutions really big and strong, even though they also like to complain about them. So the first criterion is: you better appear professional, big and strong. You’ve got to convince people that you’ve got all the great service, security and safety of a big bank. Then you can start to talk about some of the tangible benefits that distinguish you.”
To make the point, he describes his experience with a client in a different realm.
“We recently marketed a series of restaurants,” he explains. “They came to us and said ‘We’re part of the local food movement and we think that’s really good for the local economy, for the local farmers and it’s better for the environment.’ We said – yeah, but you’re forgetting about the most important thing: Your customers want a good dining experience and the food has to taste good. So let’s start there.”
Once it has conveyed that it is a solid player in the financial field, Torsney believes a credit union’s best bet is to beat the banks at their own game in crucial areas such as GIC returns, car loans and mortgage rates.
“That’s where the benefit of credit unions comes in to play,” he points out. “They can be way more competitive than a bank because the model works better. You’re not working for shareholders on Wall Street or Bay Street. You’re working for your owners – the members. So we try to emphasize that because members are owners, credit unions are working only for them and not for shareholders who are trying to make as much money as they can.”
Boast about the bonuses
Torsney adds that after credit unions exceed expectations with lower loan rates and higher rates for savings, other benefits of belonging to a financial services institution begin to hit home. “Credit unions need to show people how to better survive and even thrive with their products,” he says. “We’re hard-pressed to think of anything beyond that until we have the luxury to do so. It’s great to be able to say: ‘Oh! I just found out my credit union invests in small business and in my local economy rather than sending the money off to some investment in Argentina. I’m really glad that they do that.’ But at the front end, that information is not a must-have.”
Create your value proposition
Differentiation is important, both Arnold and Torsney say – even if they approach the notion from different angles. “Figure out what makes your credit union uniquely you,” Arnold writes, “and create a value proposition that means something to your members. You’ll be glad you did, and so will they.” ◊