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Laws of Attraction

A major research initiative, spearheaded by the Canadian Credit Union Association, looked at ways to draw new members into the fold.

Ignorance is not bliss – not if you’re a credit union looking to attract new members and no one knows what a credit union is, let alone who you are.

How can credit unions replace the ignorance and enjoy a blissful existence with keen potential new members knocking on their doors, or clicking on their websites?

That, in a nutshell, was the question asked by the National Credit Union Awareness and Perceptions Study carried out by the Canadian Credit Union Association (CCUA) and its National Marketing Advisory Committee. “We have a mandate to nationally raise the awareness of credit unions and we honestly didn’t have enough information to do that properly,” says Suzanne Peters, assistant vice-president, Communications & Member Relations at CCUA. “There was a gap in our knowledge about the awareness of credit unions and the perception of credit unions in today’s landscape,” Peters says.

There were other problems. A lot of research that was available pertained to credit union members, not non-members, so it was of little help in deciding how to attract new members. Also, there was information on some regions but not others and little from a national perspective.

The focus of the awareness and perceptions study was on non-users of credit unions, aged 20-44, since they offered the highest long-term value if they could be attracted to join. The research was undertaken by Slice Strategy, a Toronto-based market research, insight and brand consultancy firm. The objective was to determine the best way to tell the credit union message nationally. In effect, what should we say to Canadians that will drive system growth?

The work took a year to complete and included extensive study of financial services and system-related reports, marketing and communications by Canada’s credit unions, system-wide stakeholder interviews, more than 40 hours of focus groups and a survey of over 2,200 Canadian credit union members and non-members.

Research unveiled at conference

The results were unveiled at CCUA’s annual conference in Halifax last May. In the following weeks, Peters attended meetings across the country to explain the research and help credit unions understand it. The PowerPoint deck that accompanied the three-hour webinar has 106 slides and lots of information to absorb.

The National Marketing Advisory Committee met in early September to discuss the research and how it can be used by credit unions to help them grow. Early on, when they looked at awareness, the researchers realised that a major problem was a significant lack of understanding of what credit unions are. They dubbed it the milk problem, “How do you sell milk if no one knows what milk is?”

What if you asked dairy farmers to describe milk and they each had their own definition? That was largely the state of the credit union marketplace.

Among non-members, researchers found that 39 percent didn’t know anything about credit unions. That was the national number; it was even higher in Ontario, home of the Big Five Banks, and Alberta where the competition is ATB Financial in addition to the banks.

It got worse. What if you asked dairy farmers to describe milk and they each had their own definition? That was largely the state of the credit union marketplace. When credit union staff and members were asked to describe their organizations, the answers went off in many directions. The report says the simple answer that works best is: credit unions are financial institutions, just like banks in most ways, and they are open to anyone.

The problem is not a new one for credit union staffers.

“I’ve been at Libro for 27 years and have continually worked to educate people about what credit unions do, trying to dispel the perceptions that we’re not open to everybody, or don’t have the same level of competence or expertise,” says Tania Goodine, executive vice-president, Brand at Libro Credit Union in London, Ont. (103,000 members, $3.4 billion assets). “While those messages are important and they remove the barriers for people to try credit unions, they in no way differentiate us — that’s the double-edged sword of the communication and marketing challenge,” says Goodine, who was a member of the National Marketing Advisory Committee. “When we focus only on our differences, people sometimes forget that we are a financial institution or a community organization.” Goodine says one of the key things she took from the report was the common strengths and problems that all credit unions share. While credit unions stress their local differences and community ties, the research states: “when we look through a lens like this one around what consumers want from their financial institutions, and perceptions of credit unions, there is remarkable commonality across the country. There is tremendous opportunity to pool our resources to tackle awareness and perception to really differentiate in a relevant way and to use our aggregate national strength to disprove some of those perceptions – there are lots of us when you talk about it as a national collective.”

Credit union the favoured name

One finding that may surprise observers who have seen some credit unions drop the words in recent decades is that both members and non-members prefer for their financial cooperatives to be called credit unions. And they also prefer to be called members, not owners or customers, which is another surprise.

The good news is that with the banks and the federal government getting sticky over the use of the words bank/banker/banking, credit unions can differentiate themselves simply by proudly calling themselves credit unions. “This is important in terms of something we can own — it is how we define our category,” Suzanne Peters says. “To the extent that we can come together under that umbrella and build around that there is an opportunity there that is unique to us. There is nothing negative to it.”

“We win the IPSOS Best Banking Awards every year and that’s because profit doesn’t come first at a credit union and when profit doesn’t come first you can’t be the cheapest provider.” – Tania Goodine

Goodine notes that Libro called itself Libro Financial Group for a few years before switching to Libro Credit Union, the brand it now uses. It calls its members owners and, she says, it will take a lot of discussion before any decision to switch to using members, although she supports the need for credit unions to use standard terms. “Standardization of terminology will make it easier for us to increase understanding in the marketplace so I completely agree with that,” Goodine says.

It’s interesting, but perhaps not comforting, that credit unions in the United States face similar challenges. This past June, Jim Nussle, president and CEO of the Wisconsin-based Credit Union National Association (CUNA), said that American credit unions have a perception problem and
face a particular issue with the use of the term members, since research shows it just confuses their potential customers. “We use it as a part of our value proposition and we throw it around as though it is completely understood,” Nussle told the Credit Union Times. “What we are discovering from the research is that particularly, the younger you get, the less you understand what it means what a member [is]. They actually see it as a barrier, not as a benefit.”

Digging into the data looking for useable nuggets, the Canadian researchers concluded that credit unions should focus on the fact that their pro ts go back to their customers in lower fees, better rates and pro t sharing and that unlike banks that are structured to make pro ts for their shareholders, credit unions are designed to bene t their members.

Evoking an emotional response

An important component of the research involved testing concepts about credit unions that moved beyond a description and tapped into emotions. They were trying to identify how to connect a brand to consumers in the most compelling way possible. A range of concepts was tested. The one that came out as a clear frontrunner was called “Principled.”

How does this translate for credit unions? The key insight with Principled is drawn from the Some Choices Matter campaign and video that was created by Central 1 Credit Union’s marketing department for British Columbia credit unions: “Canadian banks post billions upon billions of profits — feeding their pockets and excessive executive salaries. Is that a system you want to support?”

The research takes that insight and focuses more on what credit unions do for members, rather than what choosing a credit union says about them individually. It’s more about “me” rather than “we.”

Peters says that when the researchers talked to stakeholders, mostly credit union executives: “they could identify what makes credit unions different and what drives new business but couldn’t connect the dots between the two. What gets new members to our doors? That’s the big question that no one could confidently answer.”

The research answers that by showing what services and products consumers consider essential, identifying what is unique to credit unions and explaining how credit unions can link those to attract new members. “Many large credit unions have done similar research in their markets and this report validates what they have found,” says Peters. “It gives them what they need to say, ‘Yes, we are part of something nationally.’ On the flip side, smaller credit unions don’t have access to data like this, so this can help them. It gives them things they can act on with confidence knowing they are doing the right thing.”

Goodine notes there remains a challenge between people who won’t try a credit union unless it grabs them through a better fee, or some promotional opportunity, yet they stay because of superior service and better-trained staff who give advice that is in their best interests. “We win the Ipsos Best Banking Awards every year and that’s because profit doesn’t come first at a credit union and when profit doesn’t come first you can’t be the cheapest provider,” Goodine says.

What can credit unions do with the research information? A lot — with fairly little cost, Peters suggests. They can use the standard terminology and description in their communications, on their websites and social media and throughout their public relations.

But Goodine has a caution: “It will be important for credit unions to keep that big picture, the benefit of working together, in mind, because things can fall apart in the details and in the weeds and that would be a shame. To be blunt, there is benefit to working together to build awareness and perception of credit unions across Canada and if we’re not working together in other ways we won’t be able to deliver on that promise very well.” ◊