Archive for the ‘prospective members’ tag
Have you seen the YouTube video from Summit Federal Credit Union titled Sh!t Banks Say?
My take: At a minimum, this video is ineffective from a marketing perspective. Potentially, however, it could be damaging to the credit union’s reputation.
Why is this video ineffective?
Because it won’t help it gain new members.
The video might be fine for getting existing members to feel better about the credit union. I don’t find the video funny in the least bit, but maybe some of the CU’s members do. Their opinion is more important than mine.
But for prospective members, this video does nothing.
First, how many existing bank customers are going to see this and become convinced that they should leave their bank? Answer: Few (and I’m being very generous).
Second, how does video help existing bank customers who have already decided to leave their bank decide that Summit is right for them? Answer: It doesn’t.
There’s nothing wrong with using YouTube and humor in your marketing efforts.
It’s a matter of opinion and strategy on whether or not you want to use humor as a marketing approach. I’ve met a number of people in the industry who don’t believe humor has its place in financial services advertising, but all they have is their subjective views to back up their position.
The use of video to demonstrate and show off a financial institution and its capabilities can be a powerful influence in the consumer’s decision making process. Unfortunately, Summit’s Sh!t Banks Say video doesn’t support a prospect’s decision process.
Summit does have another video on its YouTube channel, about telling kids about credit unions. This appears to be directed more towards existing members than to prospects, however. And when I checked, it only had 108 views, so it wouldn’t appear that many members or prospects were influenced by it.
The More Potentially Damaging Aspect
There is something else about the Sh!t Banks Says video that I believe could be damaging to the credit union’s repuation. Roughly 30 seconds of the 2 minute video is dedicated to a bashing of banks for their fees.
What’s that saying about people who live in glass houses?
A quick look at Summit FCU’s fee schedule reveals that the credit union charges:
- $10 per quarter for inactive accounts. So if you open an account and don’t do anything with it, the credit union will charge you $40 over the course of a year. For doing nothing.
- $5 for early account closure. Decide there’s a better place for your money within six months of opening an account at Summit? It’ll cost you $5.
- $20 per hour for statement copies for the previous quarter. I’m not sure who long it actually takes someone at Summit to do this, but the minimum charge is $5. And there’s also a $1 interim statement fee.
- $5 per month for account maintenance. This fee might not apply depending on the member’s benefit program level. But it’s still a fee.
- $5 for check copies. Online check copies are free, however.
- $5 for non-members to cash a check. If the non-member is older than 23, that is.
And the list goes on and on and on and…well, you get it.
The hypocrisy of Summit — and let’s face it, lots of other credit unions, as well — to bash banks for charging fees when its own fee schedule is no worse is a shame. Any prospective member who does her homework on the fee schedule should be outraged by the implied claims of the Sh!t Banks Say video.
Each year, Forrester Research surveys consumers and asks them to rate their banks and credit unions on customer advocacy — the extent to which the FI does what right for its customers and not just its own bottom line. Year after year, credit unions score higher than banks on this metric.
The hypocrisy of the Sh!t Banks Say video isn’t going to put much of a dent in those scores. Mostly because so few people will see it. But if credit unions, as a whole, continue to deploy this marketing technique, it might backfire and harm their collective reputation.
I’ve seen a number of blog posts recently about the credit union principles and the credit union “difference”. Josh Jones at CUNA, for example, expressed concern that:
“The credit union difference—our voluntary community involvement, commitment to financial education, service to the under-served, and so on—is becoming lost in the shuffle. The articles I’ve read tout credit unions’ better interest rates and lower fees. Yes, these are important selling points, but they’re not the only ones that motivate people to move their money or remain loyal. We can’t lose sight of our philosophical differences—either communicating them or operating by them—even though credit unions are enjoying large scale, positive exposure.”
Josh is correct that better rates and lower fees aren’t the only reasons why people move their money or stay loyal.
But it begs the question: To what extent do people move their move their money or become disloyal because they believe that their current provider doesn’t voluntarily get involved in the community, isn’t committed to financial education, doesn’t serve the under-served, and so on?
In other words, to what extent does the credit union “difference” really play a part in a consumer’s decision to select a financial services provider?
For a prospective CU member, I have my doubts that it has much impact.
Prospective members are prospective members, broadly speaking, because they: 1) Want to move their money from existing account(s)/provider(s) to a new one, or 2) Have identified the need for a new account/product.
Regarding reason #1, what motivates someone to switch? Lots of reasons. Towards the top of the list: 1) Camel’s back-breaking bad service; 2) Poor product performance; and 3) Personal reasons (e.g., relocation).
It’s perfectly reasonable to think that there are people out there who don’t receive bad service from their bank, are satisfied with the rates/fees on their bank’s products, aren’t moving or experiencing other personal life changes — and still decide “I don’t like the way my bank does business and treats other people, and therefore I will seek out another institution.”
I don’t have the numbers to prove this assertion, but I don’t think that accounts for a lot of people in the US. (And I base that assertion on past market research that I’ve done).
Regarding reason #2, for better or worse, Americans don’t go into relationships with financial providers with the a priori intention or belief that they will do all their financial business with one provider or that they will stay with that provider for the rest of their life.
So when prospective members identify the need for a new account or product, what goes into their decision? Lots of things. Towards the top of the list: 1) Fees and rates; 2) Referrals/references; 3) Service experience (e.g., direct experience in the sales process); 4) Service reputation (e.g., not directly experienced, but perceived based on advertising, word of mouth, third-party rankings, etc.); 5) Perceived fit (i.e., is this a firm I’m comfortable doing business with?).
The credit union “difference” clearly impacts and influences perceptions regarding the last point on this list. But, it’s just one point among a number. And we could argue all day about how important any one of those reasons — or other reasons — are in shaping a prospective member’s decision.
For existing members making a decision on a new account/product, the “difference” may play a stronger role because the member is more likely to have either experienced the “difference” or not.
But let me ask you credit union folks a question: Regarding the elements of the “difference” – voluntary community involvement, commitment to financial education, service to the under-served, and so on — have you ever surveyed your members and asked them 1) How important are EACH of these things to you in selecting and staying with a financial provider? and 2) How well do we deliver on EACH of the elements of the credit union “difference”?
I may be wrong, but I’m betting that few credit unions have done that. (No, instead many waste their time with that stupid Net Promoter Score stuff).
(Notes to CUES and CUNA: A national survey of CU members that asks the questions I described above would be a great study for one of the two of you to initiate. And I’d be more than willing to work with you on it. And to CUNA: If you do conduct the study, and select one of my competitors to help you with it, I’m going to come out to Madison and kick your Wimpy-Wisconsin asses).
So let’s return to the key question here: What extent does the credit union “difference” really play a part in a consumer’s decision to select a financial services provider?
My take: Not as much as many credit union folks think it does.
Which isn’t to say that there isn’t a lot of value to the “difference”. But this “difference” might be more valuable internally to a CU, than it is externally.
I’m reminded of something I think Jack Welch said. If I’m getting it right, he said the biggest value of GE’s advertising was improving the morale of employees.
The CU “difference” is similar in that regards. Even if it doesn’t influence prospective members to switch or choose, it gives CU employees something to believe in, something to strive for, and a purpose for what they’re doing.
And in no way do I mean to downplay that.
But as a marketing tool, I’m not convinced that the CU “difference” makes a difference.