The $70.5-million, 16,400-member Greenville Federal Credit Union changed what would have been a slow January into a "very good month" by running an ad comparing itself to banks.
"If banks had CD rates this high, they'd be credit unions," announced the headline in the newspaper ad promoting a special 14-month CD. Credit unions, noted the ad's text, can offer higher rates as "for-profit banks are in business to grow their money instead of yours."
The ad was so successful that the campaign in which projections called for attracting about $4 million in two months succeeded in doing that in just over two weeks, said Matt Tebbetts, VP-marketing.
"Our ad's headline certainly got the attention of our banker friends. That's OK with us, as long as potential members know and understand who we are," he said.
The ad offering a 14-month Share Term Certificate at a 3.55% annual rate ran during January in a special business section published Sundays in The Greenville News.
Greenville has a population of 390,000, and many people work in the textile and automotive industries.
The market has some 20 banks and more than 70 branches. There are also many check-cashing services, he said. As a result, Tebbetts said there is a need to have attention-grabbing advertising.
"Our headlines need to be more creative than the norm. Otherwise we wouldn't stand out. We are trying to make sure that we are noticed," Tebbetts said.
While some banks have reacted by improving rates, another sent Tebbetts a letter addressed to him along with the copy of another ad by the bank that was advertising a 13-month CD at a 4.05% annual interest. That was one month shorter and 10 basis points higher than Grenville FCU's advertised CD.
The memo from the "local" bank, that Tebbetts would not name, read, "I hope you enjoy this ad," he said.
Tebbetts said that one big difference was that the bank required a minimum $25,000 deposit compared with the CU's minimum $5,000 deposit.
An Effective Headline
"The headline, image, certainly was effective," Tebbetts said.
The ad, that showed two hands planting a seed, helped to turn January into "a very good month" in which 265 new members joined the organization, Tebbetts reported.
"Roughly 70% of the more than $4 million in new savings from the CD came from new members," Tebbetts said. More than 60 of the new members contributed to the new CD, he said. The rest was new money from old members, he added.
"That headline will be used on an ongoing campaign going into next year for most of our services," he said. It will come up in ads such as "if banks had free checking, they'd be credit unions," he added.
Tebbetts said he doesn't anticipate any legal problems as a result of using comparison ads.
"As long as we are honest in our services we shouldn't have a problem with making factual claims. We do state that our ads are based on average comparison with other financial institutions. We are certainly not making any effort to make false claims," he said.
