By Frank J. Diekmann
At great personal risk of being nominated for the Herb Wegner Award for the Individual Most Likely to Never Receive a Herb Wegner Award, let me ask this: In July, more than 500,000 Americans joined a credit union. At the same time, CUNA was announcing plans to spend as much as $100 million to make those same Americans aware of credit unions. So, please tell me what I’m missing?
This is like President Trump asking Sarah Sanders to spread the word at every press conference that he has a Twitter account.
As by now you’re certainly aware CUNA has been backing a national awareness initiative for the past few years, having conducted significant research and focus groups and more, with the result being its “Open Your Eyes” themed campaign. The objective is to address a finding in that research, that many people aren’t aware of a credit union, but they embrace the concept once the learn what the financial cooperatives are all about.
A Neon Disconnect
Here’s the thing: I like the Open Your Eyes theme and the creative. It’s concise, yet powerful. Fittingly, it grabs eyeballs. It translates well in the visual world of social media. And it couldn’t be better named as 2020 approaches.
But here’s the other thing: My eyes are also already open to the glowing neon disconnect here—for all the angst and teeth gnashing that “no one” knows what a credit union is, we’re on pace to have more than three-millionno one’s sign up for membership this year alone. Indeed, as CUToday.info just reported here http://www.cutoday.info/site/Fresh-Today/Membership-Grew-By-Half-Million-In-July-Strong-Forecast-For-Loans, through July credit unions had added a surging 3.2 million new members. That impressive 2.9 million who were added through July of last year? That’s so 2017.
According to CUNA Mutual’s Trends Report and CUNA data, total CU membership in the U.S. is now at 116.8 million people, more than a third of the population. That’s more than 20 times the five million who officially belong to the NRA, and nearly three times the 38 million carrying AARP cards, the two groups always put front and center in the display window at the You Can’t Beat Them Store.
Really the Problem?
I get that it’s frustrating to be enjoying a cold one at a party and then suddenly you meet some closed-eyed buzzkill who has no idea what a credit union is or what it is you do for a living, but is that reallythe problem? I don’t think so.
The real problem isn’t low awareness, it’s low marketshare resulting from low skills at member onboarding, cross sales, and marketing.
You’d never know from that sub-10% walletshare ratio that a third of the population belongs to a credit union (and yes, I get how the top1% who keep their wealth in investment banks and brokerages skew the number).
There are an awful lot of one-product members, especially from the indirect channel, who get counted in those glowing membership totals. And even though there are numerous innovative programs under way at CUs to turn the indirects into directs, including several discussed during the recent CUTomorrow Conference, everyone knows some of them are just never going to swipe right no matter how cute your profile pic.
Thanks for the Free Coffee
But many others will. They’re the ones who really need their eyes opened to what a credit union has to offer beyond just an auto loan or a share deposit, and not just for their benefit. “Member participation” is more than just an ideal from the Seven Cooperative Principles; it’s a critical metric in performance.
Remember that 80/20 rule? If it’s true—and it’s probably optimistic—than another way to look at July’s numbers would be to see 400,000 unprofitable, just-here-for-the-free coffee folks newly added to the membership rolls—in just one month. That may look good when lobbying in DC, but it doesn’t look so good when showing the 5300 to the examiner from DC.
We have all been mesmerized by someone selling the power of BHAGs—big, hairy audacious goals. BHAGs can get the team fired up, and if you hit the target you look like the hero who wasn’t afraid to lead! And who’s opposed to that?
But as you also likely know from experiences inside your own organizations, it can be damn near impossible to stop a BHAG once it’s rolling down the rails even when people are having doubts. So in this case, maybe that $100 million BHAG for the Open Your Eyes campaign doesn’t need to be stopped, but instead switched to another track.
Here’s the Real Question
Here’s the question for you, credit unions: Do you needto invest in that sleek Apple store of a new video studio, or would it be smarter to put some money down on a plain old hardware store? It’s not as sexy or cool or BHAGish to set aside the stylish videos and Instagram stories aimed at getting people to sign up in favor of giving your attention to the new member across the desk once they’re inside the credit union—or on the new e-sign up who’s across the virtual desk–but it would be a heck of a lot smarter.
And it would cost a heck of a lot less of the members’ money, too, to Open the Eyes of those shiny fresh members to all the other ways they could be saving money and benefitting from this concept called membership.
That money could go toward sales training and onboarding processes, especially for small CUs, instead of buys on media networks, website and social media channels.
Who Will Raise Their Hand?
Before this whole thing takes on even more of a life of its own, who in CUs will raise their hand and say ‘Hold on a minute here’? Who will say ‘What we really need is a PLAG–a Pragmatic, Lite, Astute Goal”?
Call it Open Your Eyes to Opening Their Wallets.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.infoor @FrankCUToday.