MONTEREY, Calif. - There are three simple things that make any organization, including credit unions, stand out in their markets. Identifying those three things isn’t the challenge–not surprisingly, executing them is.
But all is not lost, according to Joe Sullivan, president of Chicago-based Market Insights, Inc., who told credit unions at the California league’s Big Valley meeting that with financial companies spending approximately $9 billion on advertising during 2007, they will need to execute if they indeed wish to stand out with budgets that pale in comparison.
“Every successful, high performing company does three things,” said Sullivan. “They know their market. They differentiate themselves from competitors, and they build a culture around leadership.”
Sullivan urged his audience to think of how they are different from competitors, and then threw in a challenging caveat, saying they could not cite friendly service or cooperative structure.
When Sullivan asked for a show of hands in his audience of how many are worried that as credit unions they will not be relevant to consumers five years from now, at least half the hands were raised. “You must avoid sheep-walking,” he cautioned. “That’s walking and talking the same things the same way everyone else does.”
The trap that high-performance companies avoid, he said, is not getting “stuck in the trap of doing something because that’s the way they’ve always done it and they don’t know why. Growth and relevance and high performance starts with you.”
Three Challenges, Responses
Sullivan cited three companies, including two credit unions that he said have faced challenges with strategic responses:
* Lower East Side People’s Credit Union in New York City. “They hired a graffiti artist to paint the entire outside of the credit union to look like graffiti,” said Sullivan. “They said, ‘Let’s get into the minds and hearts of what’s going on with our members. The idea is to take a negative and turn it into a positive and connect with members.”
* Commonwealth Credit Union, Alberta, Manitoba. Sullivan pointed to the credit union’s “Young & Free Alberta” that targets young consumers and which offers a social networking component. “They didn’t do focus groups, they started a blog, and held auditions for a spokesperson. They found a way to engage younger members.”
* ING. “Yes, they’re big and huge. They embrace the idea that people need to save money and so they spread the message that saving money is cool.”
(Note: information on both Lower East Side People’s and Commonwealth CU is available on the archives at cujournal.com.)
Here’s a look at each of the three criteria outlined by Sullivan:
#1: KNOW YOUR MARKET
One trap Sullivan urged credit unions to avoid is assuming that demographic information is all that is needed. “We cannot predict what people are going to do just because they belong to a demographic group,” he said. “We need to think instead about what are the mindsets we’re going to attract. How will you learn more about your market? The first question: who is it? Is there one dominant group within the FOM? What’s one segment we serve? Then think what is one of the prevailing mindsets within that segment. You may not know, because you’ve never asked. You need to know how your target thinks and feels and what’s on their minds.”
One idea Sullivan proposed was taking advantage of the tough current economic conditions to reassure every member. “What if you were to send each of your members a letter in everyday Joe language about what’s going on in the markets and asking them for feedback on what they would like to know more about?”
He added that by 2017 there will be more financial purchasing power in Gen Y than the Baby Boomers ever had. “They are going to be a purchasing powerhouse. But we have to be careful about assumptions and what we ‘know.’”
#2: DIFFERENTIATE YOURSELF
“People want to know what you have done for them lately; they can’t see the difference between you and the other guy,” Sullivan suggested. “Take something about your business that is important to your members and make an emotional connection and turn it into a ‘Wow.’ You don’t need to be better, you just need to be different. You have to stop talking about the philosophical differences between a credit union and a bank because it’s the wrong wall to lean your ladder against. You have to talk about how you’re going to make their lives better.
“Every business is commoditized over time,” he continued. “How are you different in the eyes of the member? In a world with very little customer loyalty and smarter consumers, before they make a connection you have to tell a story and connect with them.”
For an example of a credit union that has differentiated itself by knowing its market, Sullivan cited VanCity Credit Union in Vancouver, B.C. For instance, the credit union is intimately involved with an eco-sensitive, all-green development called Dockside Green, where it is doing more than just making real estate loans.
“They are a partner in this development,” he said. “They are a believer and a core value in environmental, sustained development. Do you think there are a group of people out there who believe in this way of thinking? Yes. What they’ve done is said we’ve got some values that are part of fostering our story. We are going to be a part of the solution. They have attracted a loyal following. Ironically enough, isn’t that how credit unions got started?
“These things have nothing to do with checking accounts or mortgages, they are making a connection with their members that will withstand all the ups and downs of an economy,” he continued.
Sullivan cited an “Idea Wall” on the credit union’s website at www.vancity.com that includes an online suggestion box. There, text states, “The ideas don’t have to be about the credit union; they can be about ideas in general. You can call us a financial institution. You can call us a credit union. You can call us a bank if you want to. But the truth is we’re just an idea. An idea about a better way to be a financial institution.”
#3: CULTURES OF LEADERSHIP
“There are certain things that will shut down a culture, and others break them wide open,” said Sullivan. “Until each person believes they are a leader, they will not do the right thing. They will not be interested in your sales culture. If you build people up, their own confidence level in themselves, you will be ahead.”
