Enterprise Magazine

July 7, 2014

Re-jigging credit union marketing

The annual MACU conference is an ideal venue for credit union professionals to trade best practice ideas regarding product and service pricing, promotion and distribution

In the old days philosophers used to climb mountains to engage in deep thought as to how the world should be run. Credit union marketing professionals, whose mandate is smaller, tend to prefer conference rooms and hotel bars. However as both groups have learned, a step back from the daily grind can provide a whole new perspective on how to do things.

That’s what makes events like the Marketing Association of Credit Unions’ annual get-together, which took place this May in Montreal, so special. “MACU is the only marketing conference that targets credit unions directly,” says Shawna Miller, vice-president (governance and strategy) at Affinity Credit Union (130,000 members, $4.7 billion in assets) and the organization’s chairperson. “It provides a unique opportunity to interact and exchange ideas and best practices, but also to rethink the way we do things back home.”

As usual, this year’s event showcased the Achievement in Marketing Excellence Awards (AIME) finalists and winners, a trade show area where suppliers plugged their wares and a range of presenters including technical experts, out-of-the-box thinkers and motivational speakers.

For example Joelle Adler, CEO of Diesel discussed her evolution from being a results-oriented fashion executive, to one who now more broadly incorporates charitable initiatives into her life. Credit union marketers (who also balance bottom line demands with significant corporate social responsibility elements), were particularly touched by Adler’s story about how her partner Lou Adler’s death motivated her to found the ONEXONE children’s charity.

Internet guru Mitch Joel, president of Twist Image, for his part provided an overview of the digital noise that credit union marketers need to break through to grab and maintain member mindshare. “Physical locations are becoming a thing of the past,” said Joel. “The new real estate out there is the screen, whether it be a desktop, laptop, mobile or other device.”

A solid base on which to build

As in any war, credit unions’ fight to deliver better services, more efficiently and effectively to more members, begins with a review of the competitive landscape. On that front marketing pros have much to be cheery about. Credit unions emerged from the recent financial crisis intact, with their reputations enhanced. Furthermore recent trends, ranging from new legislation which facilitates doing business in other provinces to shifting economic patterns, all signal a brighter future.

There are clear opportunities on the horizon, both in the consumer and small business markets. Credit unions’ main competitors, the Big Six Canadian banks who form a de facto oligopoly are showing continuing signs of losing touch with their customers. Pressured by restless shareholders, who demand double-digit returns, during a time when the economy is growing in the single digits, the banks have been relentlessly raising fees, closing branches and cutting services.

A major opportunity serving small businesses?

According to Doug Bruce, vice-president (research) at the Canadian Federation of Independent Business, the results show up in the group’s member satisfaction surveys related to banking services . “Credit unions consistently score at the top in all key survey areas, including financing, fees, willingness to lend and account manager quality,” says Bruce. “In fact there is a huge gap between the lowest rated credit union, which far outperforms the best performing Canadian banks.”

A major selling point that credit unions can build on is their account manager base. Because they are more deeply sourced in local communities these tend to know and understand the business and consumer clients they deal with better. Banks on the other hand have pushed down the account manager position to a more junior, “cookie cutter,” role, which can be likened somewhat to keypunch operators, who enter customer loan request data into computers, which then often make the decisions for them. “CFIB members continue to tell us that if they can avoid going to their bank they will,” says Bruce. “There is a good opportunity for credit unions to come in and fill that void.”

Listening to customers

On the other hand says Miller many credit unions face similar marketing challenges as the banks. That particularly true when it comes to leveraging technology related areas, such as automation, mobile platforms and social media. Like banks, credit unions are also seeing less member traffic at the branch level, but increased on-line traffic.

This has forced credit unions to improve the ways they keep in touch with customer needs. For example according to Miller, Affinity is no longer satisfied with conducting annual customer satisfaction surveys as in decades past. In recent years the credit union has taken to asking selected customers for feedback within 24 hours of them performing a transaction in the branch. “Our brand resides in the thoughts of our members,” says Miller. “Because everyone is now connected through social media platforms such as Facebook and Twitter, that image can change on a dime which means we have to be flexible.”

Affinity has been getting particularly good results stemming from its participation in a Remote Deposit Capture (RDC) pilot project, which stemmed in part from a demand identified among members. Its Deposit Anywhere service, introduced last year, enables customers to make deposits to their accounts merely by taking a picture of their checks with their mobile devices and uploading them to the credit union's site. Today the Deposit Anywhere service, which has also been implemented in several credit unions, generates an average of nearly 2,500 user deposits at Affinity each month.

Affinity is not alone in getting closer to its members, says one industry professional. “Most major credit unions are clients of ours,” says Michael Rodenburgh, executive vice-president at Ipsos Western Canada, which provides advertising, branding and customer satisfaction advice and testing services. “By listening better, they identify opportunities earlier and mitigate the risk in launching or promoting a new service or idea.”

Richard Seres, vice-president (marketing) at Vancity (501,000 members and clients, $17.5 billion in assets), a long-time Ispos client agrees. “We always make sure that what we are doing or saying comes from the perspective of a clearly identified member need,” says Serres. “Without this starting point, using research to evaluate an idea is nothing more than a “disaster check.””

For example Vancity recently used a "moment to moment" tool to see where people were engaged (or not) with a planned television ad. “When you only have the budget for one 30-second spot, you need to make sure it is working as hard for you as possible to get your message across and get noticed,” says Seres. “We learned a lot from the exercise and it helped shape the messages and visuals we chose to feature. For example, we saw that people reacted really well to iconic local imagery so we ensured that this showed through in the creative.”

Promotion: Canada’s most successful marketing program?

That said because, consumers tend to look askance at self-serving marketing claims, credit unions need to be smarter in their approaches says a top industry professional. “Members say to us all the time: “Don’t tell us that you are a credit union…show us,”” says Jean-Pierre Sablé, executive vice-president (marketing, strategy and innovation) at Desjardins (6 million members and customers, $212 billion in assets). “So we make special efforts to demonstrate the tangible value they get by dealing with us.” Desjardins’ promotional efforts include supplying members and clients with a variety of goodies including renewal discounts, free Canadian Automobile Association memberships, access to their credit files and so on.

In fact Desjardins, which is Canada’s largest credit union and one of the world’s most influential financial services cooperatives, is also the best positioned to grow in the current competitive environment. Desjardins, which last year was ranked as North America’s fourth safest financial institutions, has both the scale and the know-how to further build its footprint outside of its Quebec base. However the credit union is pursuing that growth cautiously through a series of acquisitions, targeted to acquire the right customer bases and employee skill sets in select markets such as insurance and wealth management.

Desjardins strategists believe that the marketing campaigns that work best are those that reflect the cooperative’s real values. One long-time example is its little-known School Caisse program, which seeks to teach children savings habits and other financial concepts. More than 100,000 students in 1,100 elementary schools across Quebec and Ontario participate in the School Caisse program, which enables them to open up a bank account in their classroom. (To give an idea of the 100+ year old program’s massive scale, Quebec’s birthrate, where the initiative is mostly centered was 88,500 in 2011).

Because the program has been around for so long, Desjardins officials are unable to estimate how many Quebecers have participated in the School Caisse initiative over the years. However given the fact that many Quebec adults still maintain the accounts that they opened up as children decades ago, the School Caisse program is clearly a major element in Desjardins’ dominant market position in the province.

However more importantly, the program’s success, which dates back to the time of Alphonse Desjardins, the credit union’s founder, is rooted in its societal mission. “Although young people deposit their savings in schools, the program does not cover its costs,” says Sablé. “However being a cooperative with a special mission, Desjardins maintains its involvement as part of its social responsibility philosophy.”

Anti-spam becoming a key watchword

That said, while effectively leveraging technology has become a crucial competitive edge in the financial field, the country’s anti-spam law, which came into force on July 1 of this, year, will add new constraints to the way credit unions do business.

As Catherine Bate, a partner with Miller Thompson LLP notes, the primary obligation imposed by the Canada Anti-Spam Legislation (CASL) is that senders of "commercial electronic messages" or "CEMs", must have the express consent of the recipient, unless a statutory implied consent (or exemption) applies. Credit unions have always been quite good at making sure they don’t harass Internet users, however according to Bate, the legislation, “will have an immediate and lasting impact.”

That’s because where express consent is required, recipients must provide positive opt-in consent. Pre-checked opt-in boxes, or consent tied to the receipt of a service or entry into a promotion will not be sufficient. In addition, certain contact information and other disclosures will now also be required when obtaining express consent. In addition, CASL also requires that certain information be included in most messages themselves, including contact information and an unsubscribe mechanism.

Doing more with less

The bottom line says Jeff Elgie, founder of DIG, a consultancy that helps clients optimize digital assets, is that the most successful credit unions are those that are innovative and can adapt to the changing times. That is particularly important during a time in which credit unions must stretch limited resources to break through blanket big bank advertising, which is financed by seemingly endless budgets.

“The ideas that impressed me most were the “shoestring” budget submissions, in which credit unions did more with less,” says Elgie, who was one of the judges in the AIME competition, an event that he has been involved with for close to a decade. “I thought that Vancity did a fantastic job with their out-of-home campaign where they sorted over 60,000 pennies and turned them into a billboard. They also generated a tremendous amount of earned media because of their efforts, which made the campaign doubly effective.”

Highlight these quotes in separate text boxes:

“CFIB members tell us that if they can avoid going to their bank they will. There is a good opportunity for credit unions to fill that void.”

Doug Bruce, vice-president (research, Canadian Federation of Independent Business

“We always ensure that what we do (stems) from a clearly identified member need. Without this, using research to evaluate an idea is nothing more than a “disaster check.””

Richard Seres, vice-president (marketing) at Vancity.

peter@peterdiekmeyer.com

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