It kind of feels strange watching the WAMU commercials now.

Instead of bashing, which is often used to communicate value indirectly (by implying that you’re somehow the opposite of the company/characteristic being bashed) – I’d like to see more marketers take a stance, tell people what real value you bring to the table, and let consumers then make an educated choice.

But therein lays the problem: many marketers can’t tell you what unique value added or difference their institution brings to the table without bashing the competition.

Innovation can be good and bad. Historically good innovation in banking has tended to add consumer convenience while adding costs to the bank (i.e. Checking Accounts, ATMs, Internet, & Mobile Banking). While the pursuit of these convenience innovations is often guided by a desired change in consumer behavior (i.e. less branch visits), it usually just adds to costs. These costs (and the desire for short term profits) drive bad innovation. The result is often complex products & services that benefit the bank through reducing costs or increasing fees / interest income. The alternative to bad innovation is to add an upfront fee but this is perceived as differentiation in a bad way (i.e. monthly fees or teller charges).

Brand is a very effective way of creating a difference in consumer’s minds without the need to really offer products that are materially different. Your Washington Mutual commercial is classic – I personally miss their commercials – but WaMu also represents a classic bait and switch. They simply promised something they did not deliver. Brand also allows you to emphasize a different aspect of the business than your competition and this is where credit unions always seem to focus on service.

Changing the business model is the most radical and fundamental way to differentiate. Usually business model changes in an industry as mature as banking have limited success or are very risky unless there is a compelling reason for consumers to change their behavior. The Great Depression was the compelling reason for the emerging credit union movement to take hold in the US.

In a relative sense credit unions are still an emerging as a business model in the US. This makes us fundamentally different and should drive both branding as well as new product innovation. The problem is that we have aligned our business model with that of traditional banking.

To answer your questions, credit unions must accept that they are a fundamentally different business model and look for solutions that embrace those differences. It was through the entrepreneurial spirit of the founding credit union leadership that we got to where we are today. It will take a similar entrepreneurial spirit to reposition credit union brand in a way that is significant and meaningful in the minds of consumers.