For One Company, Trend Is Pens; For Another, It's MOEs

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Credit union marketers now have the ability to pinpoint to the individual member who is most likely to be looking for a car loan. Or who has a child about to enter college. Or why the fourth guy in line is 10 times more profitable than the sixth guy in line.

Yet for all those sophisticated tools available to marketers and credit unions, and none of that even touches upon e-mail marketing, digital in-branch screens, or Flash-enabled websites, often it still comes down to a trinket. A pen. A pin. A mousepad. Coffee mugs. Nothing fancy, just effective. Always have been. Likely always will be. A credit union can buy a barrage of cable TV advertising targeted right at the specific demographic being sought, and still members join because they heard about the credit union after seeing its name on a Frisbee.

Bruce Potter has been with Render Ad Service, Inc. for the past 15 years. You've likely seen him or the company at a trade show with all their wares on display: logo shirts and jackets, clocks, insulated glasses, "coolies," all customizable with the credit union's name. Sometimes referred to as premiums, these are the "stuff" credit unions commonly give away. "Pens are No. 1," said Potter. "Always have been. They usually have the credit union's name, logo and website address."

For the past two years Potter said the "hot" items have all been computer-related: imprinted mousepads or flash-memory disks that can be hung on a keychain. Over the past two years, too, he said, credit unions have shown increased interest in the types of things they can give away to prospective members who participate in SEG presentations at their place of work. "When people come to us, they usually say they're looking for something different. But it is trendy. Something becomes popular, goes away, and then comes back again. Cups, mugs, pens."

To find those different things, representatives of Render Ad Service each January travel to a trade show at which some 1,500 manufacturers show their latest trinket brainstorms. It's apparently the only trade show where you buy the giveaways and later give away what you bought.

Mark Weber's name usually appears in these pages due to his insights on branch design, retailing and branding. But Weber, president of Seattle-based Weber Marketing Group, has been spending just as much time recently consulting on another issue: mergers. For that reason, he, along with Glen Christensen and Paul Seibert, formed a company in November of 2004 exclusively to consult with CEOs and boards on mergers, both as mergees and merger-ers, so to speak.

"In all strategic plans the one item that always comes up is mergers," said Weber. "It doesn't matter what the asset size of the credit union is. And it doesn't always mean they want to merge another credit union in. The big trend is MOEs-mergers of equals. It's happened in the banking industry, and its definitely going to happen more within credit unions. They are being done because credit unions are resource-shy on people, marketing dollars and technology."

But in the case of the aforementioned banks, those MOEs achieve efficiencies by laying off Larry and Curly, and scores of others, too. Where do credit unions, which typically shy away from pink-slipping staff, achieve efficiencies? "It's a good question-where are the efficiencies of scale," responded Weber. "For credit unions, it comes in new markets and products and services that one of the credit unions may not offer. It is very expensive to bring in a new member-the cost of acquisition is astronomical. Most credit unions that are small have the members, but don't offer the products and the other things members want-more branches and ATMs."

Weber, who said his firm helps credit unions seeking to merge with other CUs seeking the same (sounds a little like an eCUHarmony), noted that if a merger is well-done it's a triple-win. "The members win first. The staff and management win, so you retain good people. And the community wins."

Weber said he knows what it's like to be on the employee side of a financial institution merger. "I went through a merger with a bank myself," he said. "We lost 95 employees; it was painful. Credit unions don't do that, they try to retain everyone. A lot of people we've talked to who have been through mergers say it's the best thing that ever happened. The other thing we're seeing is that more and more credit union managers are seeing greater opportunities for upward mobility after a merger."

But Weber, who said he hasn't been involved in any merger where things have gone bad, acknowledges that any merger brings with it as much baggage as an airport. "In an MOE you have to wrestle with two management teams," he pointed out. "There are two operations. You have to figure out who is going to take the lead. You have to ask, 'Are you efficient with this many employees?' We spend time with both management teams to understand all the communication needs. It's the unknown that causes culture shock."

Perhaps what everyone needs is just a good pen, mug or cup.

Frank J. Diekmann is editor of The Credit Union Journal.

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