There Are Some 'Secrets' That Are Well Worth Telling

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Perhaps you shouldn't read this. And if you do, don't tell anyone.

Since its inception, The Credit Union Journal has always striven to ensure marketing and advertising by credit unions receives adequate coverage. In addition to regular coverage of campaigns for various products and services, approximately every other month The Journal also features at least a full-page of creative efforts ranging from direct mail to newspaper, radio and TV ads.

Last month, for the first time, we were told by a credit union it didn't want to talk about a recent campaign; in fact, it didn't even want The Journal to publish or reproduce the marketing pieces, copies of which we had obtained. The reason: it didn't want other credit unions to know what it was doing and how it had fared.

Setting aside the absurdity of that position for a moment-the marketing campaign had already been distributed via the highly classified and top-secret United States Postal Service-the credit union's position is another bulb in a flickering sign of bad news for the credit union "community."

Cooperation got credit unions off the ground, through one century and into another. It's not obsolete-it's a very contemporary advantage other "industries" would kill to have. What's happening right now is that some credit unions have started paying so much attention to what's going on inside their own little reef that they've forgotten they're inside a much larger ocean. They read about the field of membership expansions and overlaps and community charters in the pages of this newspaper, and forget they've long been overlapped by dozens of commercial banks, insurance companies, thrifts and brokerage houses that have quite a firm foothold in their "fields."

Was the credit union in this case struggling to operate in highly competitive California or the D.C. market? Hardly, it's based in the good old Midwest.

The largest credit union in the land, Navy Federal, has about $18 billion in assets. To the "average" credit union of less than $50 million, that seems staggering. Yet during a conference hosted by the Bank Administration Institute last year, two speakers noted separately that they were at a competitive disadvantage due to their limited assets. How small were their operations? About $40 billion each.

The marketing campaign cited above isn't alone. Credit Union Journal reporters have heard "no comments" and "we'd prefer not to participate in such a story" from other credit unions over the past few years, and not because they were concerned about local bank competition. After all, most savvy banks have their branch managers sign up for accounts at local credit unions so they can get the newsletter and the promotional deals, and generally keep tabs on the "minor" competition (see page 3 for one view on just how banks see credit unions as competitors). Instead, these comments stem from fears other credit unions will "steal" their members. Credit unions and their trade groups often admonish banks that if they're effectively serving their customers, they won't leave. Some among the credit union choir need to re-read their own song sheet.

I often wonder what role some of these compensation surveys play in this emerging "co-opetition," the politically correct reference to what is really "competition." Credit union CEOs and senior managers more often than not now have compensation plans that pay a bonus for growth in both members and assets (many of you can thank the stock market for that 2002 bonus). How many credit union CEOs and, in this case, marketing directors, are actually more concerned not with what the loss of a member means to their credit union, but what the loss of that member means to them?

The first role of free market economics is that individuals will act in their own best interests. But that's colliding in this case with the first rule of human nature, which is to take the short-term view and see just what's immediately in front of you. It's time for some of the prominent voices in credit unions to loudly point out that there is no time to argue over the reef when there are a lot of other fish in the sea. (Please note I'm sparing you other painful pun references to loan sharks, sea change, whales of opportunity, bigger ships, sand dollars, etc.)

Letting other credit unions know your marketing campaign was a success is worthy of sharing. It's called cooperation, and it's what makes you different. And being different is why people join.

Note to readers: Beginning next week, The Journal will be soliciting participants in its annual Day in the Life of Credit Unions project. The project, in which credit unions from around the world all shoot photos of events at their operations on the same day in August, is popular, and usually fills up fast. The photos are featured in the issue published during International Credit Union Week. If you're interested in signing up, please contact Judy Hartnett at 888-832-2929, or jhartnett cujournal.com.

Frank J. Diekmann is editor of The Credit Union Journal. He can be reached at P.O. Box 4387, W. Palm Beach, FL 33402, or at fdiekmann cujournal.com.

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