https://www.luminusfinancial.com

What is most concerning about credit unions in Canada and the US is they function too much like banks and not enough like credit unions. – If you look at a variety of web sites e.g. Northern Credit Union in Sault Ste. Marie Ont. – they talk a good line about being local and providing friendly, personal service – but if you’re a little guy who needs a loan there are only traditional bank style options. – and not a credit union logo in sight.

It’s getting to the point with Canadian credit unions that their new slogan should be -

” All of the hassels of the big banks without the conveniences!”

Glad to see we are all connected in credit union land–if I ever move back to the States.

@Jason – thanks for saying we’re nice people! That was very “credit union – nice” of you!
Say – when I clicked on the link to your WSJ article I could see the comments, but the article tab took me to adverts only. Am I being punished because I’m a MAC user? Would love to read it.

As I mentioned in my blog post about credit union bank bashing (referenced earlier), trying to build one’s self up by attacking others rarely has positive net results and often builds a glass house around the attacker.

If the FDIC is on the verge of drying up and endangering consumer deposits, then I think point #3 would definitely be a good marketing angle for credit unions. Offering substantially greater security of the assets they hold for members would be a home run for credit unions. Fear has certainly earned its place in the marketing hall of fame as a motivator.

I do like where you started to go with point #5 in your comments. Fewer or lower punitive fees is a positive selling point that can differentiate one financial institution from another. For people prone to incur these types of fees, that type of benefit would appeal to them. (On a side note, I think Ally Bank has set the bar for banks with their $9.00 per day overdraft fee, regardless of how many overdrafts occur that day.)

I can get behind point #6 as well since “Move Your Money” is an emotional appeal that will attract consumers who vote their principles with their wallets. But even for consumers who do switch on the basis of an emotional appeal, the credit unions still must offer value to these consumers once they get them, or the relationship will be short lived. Even principled consumers still expect value.

@Brian: You make an extremely valid point about differentiation. I’ve worked with quite a few credit unions (and banks, too) who have managed to do this individually and have been quite successful. But I attribute their success to individual efforts within that organization rather than by binding themselves to an industry mantra.

I wholeheartedly agree with you that every financial institution should try to differentiate itself, if possible. Of course, it’s also ok though to just be one of those bank-like objects where people drop their money off — there’s a lot of room in the financial services market for those players, too.

@Everyone: Fantastic civil discussions occurring here. It’s true, people who work with credit unions are nice people.

But forget all that — it’s a DIFFERENCE — and differentiation is pure marketing plutonium.

There’s enormous pressure to let banks define what CUs can and can’t do — it’s soooooooooo much easier in every way, from marketing to software and compliance — and so many people advocate giving in to that pressure completely. “Let’s just do and look and feel exactly like a bank, except I guess we’ll try to do it a wee bit better or cheaper, grab what crumbs we can, and trust people to do the research and make the logical choice…”

Or look at it this way: credit unions aren’t for everyone, and maybe more CU marketers need to get comfortable with that fact. CUs are for people who care about the ethics and behavior of their financial institution, and are willing to . Lots of people don’t give a hoot and never will — they just start driving and dump off their money at the first bank-like object they pass. So why dumb things down?

I also note that most examples of a successful move away from the C and U words are already dominant in their markets. Unless you’re enough of a force to displace and become “the generic brand” in your market, imitating this move may not be a good idea. In other words, sure, I can see that there are certain specific situations where it might make sense. But it’s the difference between being a beloved specialty brand and one of the very few CUs with the clout to replace “Kleenex” in your market. And even in these cases, the move had better be subtle enough to avoid throwing out existing brand equity.

While many consumers don’t know what a credit union is, many of them do…. and they specifically seek out a credit union for lower rates on loans, less fees, etc. In fact, Suze Orman is a huge advocate of credit unions and touts “joining” one on her show regularly.

It would be interesting to know statistics on the percentage of people that don’t know what a credit union is vs. those that look for those two special words, “credit union”.

I am surprised at the lack of defense for the credit union moniker in a time when we are given one last chance to truly separate ourselves from the banking world. When we can play up the fact that if you see “credit union” in the name you can count on these things:

1. In 100 years of business we have NEVER used taxpayer money to bail us out.
2. Credit unions don’t fail – they take care of one another through merger.
3. Your money is insured up to $250,000 and our insurance fund, unlike FDIC, is still in good shape.
4. Credit union credit card programs don’t punish members. See Ondine Irving’s site and all the press she’s gotten on Suzie Orman, Oprah, CNBC, etc. She urges people to go to the category that is called “credit union”
5. The “Move Your Money” initiative, which again has gotten amazing press coverage, urges people to move to a local community bank or a credit union.

To be fair – not everyone cares about those difference – but most of the advice here feels like “it’s smarter to try and be all things to all people and be as generic as possible pushing me-too products so we don’t confuse the lowest common denominator.”

I thought marketing was about differentiation. Not seeking to be the same.

I said it on Twitter and I’ll say it again – If you don’t want to be a credit union, convert. Go be a bank. Then there’s no confusion whatsoever.

Removing the focus from the institution type allows marketers to shift emphasis onto the relevant details – the products. For example, consider these two statements:

“Because we’re a member owned financial institution, membership at ABC Credit Union means lower interest rates on car loans.”

versus

“ABC Credit Union’s car loan rates are one percent lower than our competitors.”

Which of the factors in the first statement calls an average consumer to action? I’ll argue that it’s the product discount alone, with little regard for the membership or ownership attachment. Excluding the membership mention in the sentence does not make the offer any less compelling, nor does including it make it more compelling.

But what if the interest rate isn’t actually lower than competitors’ rates? Or what if the products themselves aren’t any different? Then what is an institution to focus on in its marketing? It seems that institution type then becomes the default message.

(Another option is to denigrate other types of financial institutions, as discussed at http://www.inetsolution.com/turnleft/post/Bashing-Banks-Is-this-A-Smart-Strategy-for-Credit-Unions.aspx)

Credit unions should focus on making their products & services the center of their marketing and self-improvement efforts. If you have the best products at the lowest cost, it doesn’t really matter what words are in your name because low cost and high convenience are two words that financial consumers understand clearly.

Credit unions do provide valuable products and services that consumers need. If I understand Sarah Cooke correctly, her core message is this: talk to consumers in their native language. You’re wasting energy speaking Mandarin to an Italian.

I don’t like the trend of using “financial” or “savings” to replace credit union. “Financial” to me refers to a Finance Company and I would never go to one for a loan. And, “Savings” refers to Savings Bank or Thrift. Now, that may be something unique to Illinois where I live. I’m not sure if in other places it would be interpreted that way or not.

It is a delicate balance to downplay or eliminate the “credit union” while retaining the uniqueness of a credit union. The question becomes not whether credit unions are doing it or not, but which credit unions are able to make the name adjustments while retaining the credit union difference in their organization.

As pointed out above, some banks have dropped the word “banks” from their marketing names. Does that make them not banks?

For those in favor of dropping the prominent “credit union” moniker, the point is to move the discussion with consumers beyond, “What kind of financial animal are you exactly?” Because that’s a distinction that many banks and credit unions like to make, but there is no meaningful distinction for the vast majority of consumers.

The argument is that having “credit union” in the name, calling attention to the fact that you are some very specific kind of financial institution, alienates that large group of people who don’t know what a credit union really is. It creates a barrier to attracting more customers. That makes it about more than semantics. That makes it about real business impact.

Some banks use “financial” in their names too. MB Financial is an example. No bank, just financial. Some banks make this switch to “financial” because they think the word “bank” is limiting. They believe that consumers think of savings and checking accounts when they hear “bank,” and they want to convey the idea they are more than that, they have insurance too, and maybe investment products. Some credit unions might feel the same way, that the broader term “financial” does a better job of conveying the full breadth of the products they offer. I think there is some validity in that point of view.

That’s true – the financial clearly says I’m not a credit union. Cuz that would be confusing. So what is a financial? A bank? A finance company? A new category? Is it insured?

And what if, when someone did ask the question “What’s Bethpage Financial?” the answer was, it’s a place to do your banking?

So you drop the word credit union from your name. And then people say “What’s Bethpage?” A golf course? Nope, we’re a credit union. Oh, what’s that?

And we’re back……..

Many credit unions have to add “cu” or “fcu” to their URLs because when they change names, they pick something so commonly used that all the desirable web address are already taken.

For example, it’s far more common for me to hear someone refer to “Fifth Third” in conversation than “Fifth Third Bank.” The same is true of “National City” and “Wells Fargo.”

Consider also the URLs of http://www.53.com, http://www.nationalcity.com, http://www.wellsfargo.com and http://www.pnc.com. None of them use the word bank in their URLs.

But an overwhelming majority of credit unions that I’ve worked with or even know of use “cu” or “fcu” in their URLs.

Sarah Cooke made a good point in an article not too long ago where she said no one says, “I’ve got some credit unioning to do” (or something to that effect). It seems like a lot of energy and money is wasted trying to change a social norm for now apparent reason.

Trying to establish a credit union specific vernacular for what most Americans know as “banking” feels a lot like trying to convert people to call store brand Kleenex “facial tissue.” I’d be willing to bet that most people know it as Kleenex and know what you’re asking for when you request a Kleenex. Unless there is a significant difference between facial tissue and a Kleenex, then I think I’d encounter less frustration just asking for a Kleenex when I need one than to take a chance on getting a puzzled look when I ask for a facial tissue.