Is ‘Common Bond’ Part of Your Brand?

Credit unions, as not-for-profit organizations, are required to limit their membership in order to qualify for their untaxed status. Historically, this helped create a “common bond” between credit unions and their members. But is this why people join a credit union — for the sense of belonging and togetherness?

The credit union industry doesn’t reference “affinity” as a central component, nor are “common bonds” cited as a core philosophy of the movement. Not at the National Association of Credit Unions , nor the Credit Union National Administration, nor America’s Credit Union Museum, nor the California Credit Union League. Not even in Canada are themes of “affinity” or “common bonds” mentioned.

Some see the “common bond” requirement as a core tenet of the credit union movement, while others see it as a legal technicality preventing millions of Americans from enjoying what credit unions have to offer. If it weren’t for legal restrictions, would pretty much all credit unions would extend their services to everyone regardless of where they live, work or worship?

Key Takeaway: The original purpose of requiring credit unions to have a “common bond” was part of their legal foundation as not-for-profits. But the “common bond” gave credit unions tremendous brand clarity. When you target a specific audience segment, you can serve their needs with a razor-sharp focus. It’s this focus that helps create a relevant, differentiated brand.

Key Question: If you’re a bank, how does the “common bond” question apply to you?

As credit union charters have expanded and more credit unions merge, their focus on a common bond (also known as a “target audience” in marketing) has all but vanished. The more you grow and expand, the harder you have to work to stay focused. Just because your credit union is open to all people who live, work or worship in your state doesn’t mean you shouldn’t be looking for common threads you can identify in your members’ lifestyles. The more insights you gain about your target audience, the strong your brand will be.

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