You've probably heard about the University of Iowa Community CU's recent attempt to change its name to Optiva. That story has been covered in this publication and others, and debated endlessly in blogs. Members were asked to vote on the name change and it barely passed. Then some members who hated the new name and didn't want to change the old one circulated a petition, got enough signatures for a new vote, and defeated the name change.
Watching this drama unfold and reading some of the numerous and detailed blog entries confirms that many people do not understand marketing at all. And far fewer people understand the importance and nature of branding. Some interesting points have been raised by the people involved for and against the name change, by reporters covering the story and, especially, by people sharing their opinions on the Internet. I'd like to join in and share some of the most important lessons I've learned while helping credit unions rebrand or re-launch their brand across the country.
Do you have to change the name and/or logo to jump start a Branding effort?
No. Many credit unions have names and logos that still fit, but their employees, members and prospective members don't know what the credit union stands for. A re-branding can launch a brand positioning that explains why they should pay more attention to and use the CU as a primary financial resource. If people are thinking about your CU they're going to call when they buy a car and need a loan, they get a good tax refund and aren't sure how to invest the money, etc.
Is a name change necessary when a credit union charter changes and the name no longer describes the full pool of eligible members?
It's interesting that in blogs you find many people who answer this question, "no." In fact, it doesn't make sense to expand a charter but not change the credit union name to encompass the new service area or population. The name change can introduce the credit union to people newly eligible to join. There seems to be a trend of credit unions choosing new names that are made-up words that don't mean anything. Does that make sense?
If a credit union has a professional marketing staff that knows how to present this type of name and a budget big enough to create significant awareness of the name it can work. But many credit unions cannot afford ongoing print and broadcast advertising. They count on their name to help explain to the market who they are and who they serve.
How should you pick a name?
A name should be selected to help establish the CU's brand image. That means a name should be chosen carefully with collaboration between the management and marketing professionals with Naming the credit union shouldn't be a contest open to the community. The name shouldn't be selected at a board meeting. The name should be chosen with at least the same level of professionalism and analysis used to select a new branch location, hire a new CEO, or any other decision that will significantly affect the future of the credit union. Can you envision the selection of a new CEO put out for a membership-wide vote?
What is the biggest risk with a name change?
The biggest risk is that you'll alienate existing members who identified with the old name. If members were part of the original company or geographic area represented in the old name they can easily feel rejected when that name is changed. Communication is vital. Other risks are selecting a name that has trademark conflict issues, or of course changing to a name that does not connect with your core members and prospects.
How should a name change be approved?
The board should be accountable for approving a name change. Members should certainly be informed that a name change is being considered, but a name change should not be voted on by all members unless state law requires it. In the case of the University of Iowa Community Credit Union, a few disgruntled members managed to stop the name change on the eve of the new name introduction, after a very significant investment had been made in the new name. State law required UICCU bring the name change to its membership, but had the CU been allowed to have board and management handle the name change and merely kept the membership fully informed of the process, there very well might have been a more productive outcome.
Everyone involved in a name change needs to stay focused on the big picture. The name, logo and tag line must appeal to members and prospective members and help establish a positive brand image with them.
Paul Lucas is a marketing consulant specializing in CUs. For info: www.pauljlucas.com.
