MUSKEGEON, Mich.-Muskegon Co-op FCU has not needed to expand its charter since 1949 because the sponsor it serves has a wide reach.
The CU primarily serves members of Muskegon Co-operative Services, which provides food and merchandise-much like a Sam's Club-to residents in four counties. As long as residents join the co-operative they can join the credit union. The arrangement has allowed MCFCU to prosper in recent years, increasing assets from $20 million in 2003 to $44 million today, explained CEO John Rupert, who has run the credit union for the last eight years.
Serving a single sponsor with a wide reach is a marketing advantage, said Rupert about the 8,500-member CU's growth. "It makes it easier to do geographical advertising. We can do a radio ad in our areas and know that the majority of people hearing it are eligible to be members of the credit union."
Rupert believes that serving a large field of membership, as opposed to being focused on niche groups, has made for much more effective use of the credit union's advertising dollars. "All of your marketing dollars are reaching the ears and eyes of people who can join the credit union or have joined. Whereas a single sponsor or multi-SEG credit union puts an advertisement out and possibly only 20% of the people who see the ad can take advantage of it."
If MCFCU were SEG based, Rupert said it would have to back off mass media advertising in favor of targeted marketing, which Rupert said is more expensive. But the CEO acknowledged there are benefits to marketing to only SEGs. "One SEG-based credit union CEO said targeted marketing to a specific audience gives his credit union exclusivity. There are benefits to both approaches and sometimes it just comes down to salesmanship, the product offering, and service."
Rupert is another who sees that serving a wide variety of members spreads the credit union's risk. "Our risk is essentially distributed across a large number of employers, instead of one or a select number."
Once a credit union begins to grow in complexity-more products and services-an expanded charter is needed to spread the risk and increase the opportunities, said Rupert, who believes the rapid growth in community-chartered CUs in the last ten years, has been good for the industry. "The only concern is that at some point, and I cannot tell you when that happens, the growth can hurt the credit union if it disconnects with its membership. The risk with expanding is losing the connection with members."
