TALLAHASSEE, Fla.-Credit unions' reluctance to embrace "sales" has also caused many consumers to remain unaware CUs are a better deal than banks.
Data from a survey conducted by CU 24 before and during CUNA's Government Affairs Conference earlier this year found 77% of credit union leaders cited consumer misunderstanding of credit union benefits over banks as the greatest challenge in attracting new members. Last year, that figure was 67%.
"I've been around credit unions for a long time and it [consumer misunderstanding of CUs] has always been a challenge," said Jim Gowan, EVP and chief operating officer. "As they expand their charters, they are discovering the importance of marketing and advertising. Unfortunately, in this economic environment, marketing budgets have been cut."
Growing awareness will grow marketshare, noted Gowan. "Another opportunity is credit card business. Many issuers are raising interest rates, even on 'A' and 'B' credit, so there is an opening for credit unions to get back into credit cards, even those who sold their portfolios a few years ago."
Gowan blamed a lack of a sales culture at many credit unions for this continuing issue, with many still uncomfortable with the word "sales."
"But I say if a credit union doesn't educate its members what is available, it is doing its members a disservice. If it does a good job of educating members, members will see the value."
Weak branding efforts and/or the name of a credit union sometimes can imply to a potential member they cannot join, Gowan said. While some CUs address that gap via their website, but they still have to drive the members to the site, he noted.
CU 24 is attempting to help its member credit unions combat this lethargy, Gowan said. Because many small and midsized credit unions do not have the ability to pay for professional advertising firms, CU 24 last year created a marketing exchange group. Marketing pieces are developed by an advertising firm, which CUs can private label.
"That is a big difference with us being a credit union-owned company," he said.
The marketing exchange also shares best practices in the industry. Gowan said participants try to understand what is working well at successful credit unions and reproduce the efforts for themselves.
The exchange is scheduled to meet every quarter. Once a year there will be a face-to-face conference, while the other three meetings will be webinars or teleconferences.
One of the better marketing ideas Gowan has seen so far: some CUs have engaged members as ambassadors to the credit union-offering rewards for referrals of friends and family as new members.
"They are getting a little more creative, but it will take some time to see results. Certainly word-of-mouth advertising is powerful when someone has a positive experience."
