Expanding FOM Doesn't Mean It's Easy Pickings

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CHARLESTON, W.Va.-Expanding a credit union's charter makes it easier to sign up those who walk into the credit union, but it does not simplify marketing and it may not improve business results.

That's the view of Dan McGowan, SVP and CFO at the $132-million Pioneer West Virginia FCU. "I can't really say that going to a larger field of membership at my current credit union, or at my previous one, has made a big difference," McGowan said. "I think there is plenty of room to continue to target market the groups we originally served. Moving to a community charter makes things easy from qualification standpoint, because now virtually anyone who lives in the geographical area can join."

About five years ago PWVFCU converted to a five-county community charter after having served local schoolteachers. The CU's philosophy is that a blanket approach to marketing is needed to build the brand, but the real work moving product is accomplished through catering to the unique aspects of each membership segment. "For example, we do some vey specific things for schoolteachers, such as a $1,000 signature low- or no-interest loans each fall to help the teachers get back into their classrooms," said McGowan. "Just goodwill loans."

The SVP/CFO said Pioneer West also expects to do targeted marketing to the healthcare community after acquiring a CU that served local hospitals. "Once you go community, you need that broad-brush marketing approach to get the credit union's name out, but you cannot stray too far from your core membership. You need to make people see you as being their credit union, and give them a sense of ownership and affiliation that strengthens the relationship."

Community involvement efforts, too, should be tailored. "You need to be visible where those employer and occupational groups are," said McGowan. "For example, at my previous credit union, which was also a teachers CU, we gave out awards to the students for being the best and brightest and to the teachers for educational excellence."

Expanding FOM has been good to reach more members, acknowledged McGowan, but it may also detract from consumers' ability to see the CU difference. "The reason credit unions exist is to protect the membership from predatory-type institutions that seek to do nothing more than nickel and dime them to death. We exist for the benefit of the member, but as an industry we don't do a very good job of communicating that idea to the public. The sad thing is most consumers view banks and credit unions as interchangeable."

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