Are Credit Unions Getting Money's Worth?

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Not since the 1970s, when Chad Everett, star of the then hit series "Medical Center," was spokesperson for credit unions in a national campaign backed by CUNA, have credit unions taken to the airwaves as they will in 2005.

The Credit Union Association of Oregon is backing a campaign that includes TV and radio spots featuring "Bob." In Michigan, the league's Cooperative Advertising Forum has finalized its 2005 creative campaign and adopted guiding principles for its $1-million pool of matching placement funds. And in the granddaddy of them all, California and Nevada's credit unions have approved an unprecedented expenditure of $6 million on a primarily radio campaign to launch in mid-January (see related story, page 2).

It all begs the question: is it worth it? That simple question has a complex answer, because it depends on how "worth" is measured. The Oregon and California campaigns, along with a separate radio and TV campaign that has been running in Reno, Nev., are all about raising "awareness" of credit unions. Indeed, in the California effort isn't even called an advertising campaign, it's being called a "public advocacy campaign," and is not aimed at selling credit union products, services or even membership, but at raising awareness of what credit unions are and how they work.

The California/Nevada advocacy effort will be running at least two years and will be carefully tracked. But data based on consumer polling in the Reno/Washoe County, Nev., market has uncovered findings that seem to reveal a troubling paradox: consumers are indeed more aware of what a credit union is, but at the same time have during the campaign's run become less likely to say they would consider joining one. Officials with the California/Nevada Credit Union League, along with representatives of San Diego-based Strata Research, which conducted the research, say the data is not as troubling as it would seem. Strata Research will also be tracking the California/Nevada public advocacy campaign.

The California/Nevada league recently trumpeted the good news coming out of the Reno radio ads, that one out of every two residents in Northern Nevada recalled the ad campaign, and that consumers recalled two primary messages: almost everyone is eligible to join a credit union, and credit unions are member-owned.

Moreover, consideration of a credit union for non-credit union members increased each of the past three years, from 25% in 2000 to 39% in 2003.

Question Raises Questions

But another question appears to provide a response that offers credit unions less to cheer about. When asked, "If you knew you were eligible to join a credit union, how likely would you be to start using a credit union in the next 12 months?" In 2003, 31% said they were likely to do so, down from 41% in 2002 and 45% in 2000. The number who said they are unlikely to use a credit union shows similar results, with 63% providing that answer in 2003, up from 46% in 2002 and 35% in 2000.

Mark Lowe, a spokesperson for the California/Nevada league, said there are reasons for those findings.

"First, it may just be a statistical anomaly," said Lowe. "The (consumer) sample in 2000 was just 51 people, so the margin of error was 20 percentage points in either direction. In 2002 there were 100 people (in the sample), which has a margin of error of 9.8%. And in 2004 there were 200, which has a margin of error of 4.9%."

Lowe explained that the way a question is asked also has a great bearing on the findings. He noted that when consumers were asked, "Have you ever considered becoming a member of a credit union,?" 39% said "yes" in 2003, up from 31% in 2002 and 25% in 2000.

"The (12 months) question asks about a timetable," noted Lowe, "while the other question is more abstract and is an easier question to ask. It's similar to asking, 'Would you consider taking a trip to Europe?' and 'Would you consider taking a trip to Europe in the next 12 months?' The number is always going to go down when you ask for concrete plans."

Lowe added that what motivates a consumer to change financial institutions often has to do with major purchases, such as financing a car or home.

Happy With The Results

"We're not at all concerned. We are very happy with the (Reno) numbers," said Lowe. "The point was to get people to consider a credit union in general, and those numbers are going up, and those are the people who are (now) bank customers. We wanted to get people who are not aware of credit unions to be aware of credit unions, and it did do that. Now the individual credit unions don't have to market that."

With the public advocacy campaign set to launch in California and Nevada, Lowe reiterated the goal is not to build membership in the states and will not be measured by how many people join CUs. Rather, it seeks to raise awareness of what credit unions are and the benefits they provide.

In seeking funding for the advocacy campaign, the league noted that by a two-to-one margin, consumers who are non-members favor revoking the tax exemption of credit unions. The California league said it is anticipating a strong banker attack in the state capital in 2005 and it is seeking to build grassroots support.

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