Having the wrong name can cause a credit union CEO all sorts of headaches.
Many credit unions have a rich history within their communities, having formed to serve employees of a certain company or another specific group. But over time, many have expanded their field of membership to include a broader base and yet, their name might not reflect that. Other institutions could have long names that are difficult to remember.
All of this can affect a credit union’s bottom line. Because of that, a number of institutions have set out to rebrand to better reflect those that it serves.
Still, the process of changing a name can be fraught with challenges, such as communicating the rebrand to members and remaining connected to the credit union's past.
A name change “can make or break a credit union’s future,” said Paul Lucas, president of Paul Lucas Marketing & Branding, which works with credit unions. “Today credit unions must compete in a wider marketplace with branches and with electronic services. A memorable, appealing brand identity is important to achieving growth.”
There can be a direct correlation between a successful brand and a credit union’s bottom line, experts said. Alyssa Nolte, chief marketing officer for Discida, a data science firm that performs brand health evaluations for credit unions, said that a rebrand can help an institution tap into new business segments.
Trailhead Federal Credit Union in Portland, Ore., learned this firsthand when it changed its name from Northwest Resource Federal Credit Union in June 2013. The $119 million-asset institution made the switch to better differentiate itself in a marketplace where many companies use the word Northwest or Northwestern in their names, said Kim Faucher, vice president of marketing.
“We needed a name that stood out from the pack, one that was memorable, easier to say and something that reflected upon the outdoors lifestyle of the area we are in,” she added.
Before the name change, loan volumes fell almost 4 percent, to just under $50 million, from mid-2011 to mid-213, when the rebranding took place. But from May 2013 to May 2014, membership grew by more than 10 percent, while loans increased by almost 14 percent.
Those improvements have continued. From May 2013 to February 2019, Trailhead saw membership surge by 63 percent and loan volume climb by 76 percent.
“I think if we had not changed our name, we might not be in business anymore, since we were shrinking prior to the change,” Faucher added.
A rebranding can be expensive given the laundry list of items, such as human resources, insurance, IT, legal, marketing and physical facilities, that need to be considered. There needs to be time for approval from the National Credit Union Administration and for lawyers to sign off on the new name. Costs can run from tens of thousands of dollars into the six figures, said Frank Allgood, relationships and results leader at Your Marketing Co.
Because of that, it’s important that the institution get it right. Mark Arnold, founder and CEO of On the Mark Strategies, a credit union and bank branding and marketing firm, recommended that credit unions seeking a name change hire a professional agency. Key players, including the board, C-suite and others, should also agree to the new name.
“This is not a project you can do yourself,” Arnold said. “You need outside help throughout the entire process. There are too many false paths you can take with a name change.”
Ensuring a new name doesn’t infringe upon an existing trademark is important. The internet has made passing trademark rules today tougher, Lucas said. Before the world was connected digitally, a credit union in one market could pick a name that was already being used by a different institution in another area, Lucas said. But now that can be confusing to consumers given the accessibility to information.
Because of that, double checking on whether a name is free before getting too far in the process is key.
“Some credit unions that ignored trademark considerations have had to start over with a new name – after new building signs and printed materials have been created,” Lucas said.
A credit union changing its name also runs the risk of potentially alienating current members who selected the institution for its heritage, experts said. Explaining the reasoning behind the change to current members and how the rebrand will help with growth is essential, Lucas said. Without that, an institution risks “a negative reaction that could result in lost members and lost business from current members,” Lucas added.
How this rationale is communicated is vital, sources said. Social media campaigns, town hall meetings and in branch events are just some of the options that should be used, Nolte said.
Selecting a new name that hints back to the credit union’s origins can also help the institution retain its identity. For instance,
Gwinnett Federal Credit Union changed its name to Peach State Federal Credit Union in January 2013. The previous year, the former Peach State Federal Credit Union had merged into Gwinnett.
Kristen A. Patton, senior vice president of marketing at Peach State in Lawrenceville, Ga., said that the Gwinnett name no longer accurately reflected its membership base and footprint. At that time, the credit union had more than 41,000 members in seven counties throughout the state with more than 60 percent of those members outside of Gwinnett County.
The new name of Peach State is a nod to its roots in Georgia, which is nicknamed the Peach State, and ties back into that previous merger. Patton estimated that the total costs associated with rebranding were around $200,000.
While Peach State did not track statistics related to the name change, Patton said management believes that it has “positively impacted” its growth and the credit union’s long-term strategic vision.
Since changing its name, the $500 million-asset credit union has further expanded throughout north Georgia and into southwestern South Carolina. It now has more than 60,000 members and 25 branches.
“We felt that a geographically based name, like Gwinnett Federal, limited successful growth,” Patton said. “The Peach State FCU name presented us with a better opportunity for future growth statewide. There are just a few distinctive ways to say ‘Georgia’ and there were already so many credit unions with ‘Georgia’ in their name.”
