Credit unions hope the growing consumer anthem of “We’re not gonna take it,” over the latest debit card bank fees, has those consumers primed to make a switch.
Bank Transfer Day, the brainchild of a Los Angeles art dealer, has delivered what credit unions have long sought, said Brent Dixon, youth adviser for Filene Research Institute and Crash Network founder.
“Credit unions have forever been trying to come up with a national brand awareness campaign, but now you have Bank Transfer Day, which is fully from the people, not trade associations or even the credit union industry,” Dixon said. “It’s driven by real emotions, frustrations and needs. It’s a huge opportunity for credit unions, and I hope beyond the marketing, they really make it easy for consumers to act and move their money over.”
Credit unions across the country have certainly been making the most of the opportunity presented.
In Minnesota, Affinity Plus Federal Credit Union’s latest round of its edgy, irreverent “Ditch Your Bank” awareness campaign has expanded to include advertisements that question the new fees.
Launched on Oct. 7, the ads, which use humor to take a swipe at the “cloak and dagger bank fee structure,” also educate consumers on the credit union difference of transparency and helping members hold onto as much of their money as possible. The multimedia blitz includes digital billboards, radio spots and newspaper ads.
“Minnesotans shouldn’t feel like they’re held hostage by financial institutions that continue adding new fees, charges and rate increases,” said Kyle Markland, president/CEO of the St. Paul, Minn.-based $1.4 billion credit union. “The advertising response is our way of telling consumers that we sympathize with them, and that they have an alternative when it comes to where they do their banking.”
In addition to offering fee-free debit cards, Affinity Plus rewards members for using their debit cards through the credit union’s participation rewards program. Members earn points for each transaction, which can be cashed in for loan rate decreases, used to skip a loan payment, or turned into monetary donations to local charities.
“Our members work hard for their money, and it’s our responsibility to focus on doing what is right for them by helping them keep their money where it belongs, with them,” Markland said.
According to Sandra Olson, event coordinator/member adviser at Affinity Plus, members have been responding to the message, and the credit union has experienced an uptick in accounts across the board from loans to checking accounts.
“This has been an awesome opportunity to educate consumers about the difference between a credit union and a bank. So many still have no idea what a credit union is,” said Olson. “How could we not leverage what the banks have handed us, we owe it to the people of Minnesota.”
Equally proactive in its messaging, The Golden 1 Credit Union has taken advantage of the rising consumer discontent to reinforce its commitment to free checking and no debit card fees while positioning itself as the local, full-service convenient alternative to mega-banks.
Within a day of Bank of America’s announcement of the $5 monthly fee for debit cards, the Sacramento, Calif.-based credit union launched an awareness campaign on billboards, newspapers and radio advising consumers to “Stop paying for something that’s supposed to be free. Drop your Bank America.”
According to Scott Ingram, senior vice president of marketing at Golden 1, feedback from focus groups revealed that despite hating their bank, many consumers stay for convenience and because they don’t think they have another choice. In addition, the $7.7 billion credit union has been making the media rounds as local newspapers and television news stations continue to ask Golden 1 to weigh in on what consumers can do.
“We’re focusing on the value proposition that Golden 1 offers members and why we’re the better choice. The message in this campaign is not just the free checking or debit cards, but that we are in many ways more convenient than their bank options,” said Donna Bland, president/CEO of The Golden 1. “We’re trying to let consumers know that they deserve better from their bank.”
It’s a message that has resonated. In the first half of October, the number of new members who have joined online has more than doubled representing a 110% increase over its normal monthly average of new online members. In addition, there has been a 34% increase in free checking.
San Diego County Credit Union, which has been urging big bank customers to switch since January, has also drawn attention to its longstanding policy of offering free debit cards.
According to Teresa Halleck, president/CEO of the San Diego-based credit union, while “many big banks will continue to seek out new ways to increase current fees or invent new fees, leaving many customers feeling nickel-and-dimed,” SDCCU will continue to offer many free services and fees to a minimum “because our members are our owners, and we have their best interests at heart. We did a Beach Bankers protest during Labor Day weekend to tie into our TV commercials, which have for many months featured bankers celebrating their profits and high fees. So, our timing on these initiatives was ahead of the curve and proven to be very timely.”
She added that year to date, the 2011 new account openings have been up over 28% compared to 2010.
The over $5.2 billion credit union has also emphasized how easy the switch can be.
“Within the past few months, we launched the ability for a consumer to fully open their SDCCU accounts online, thus making it possible for any big bank customer to begin moving their accounts without delay,” said Halleck. “There is no need to take off work or stand in line to do business at SDCCU.”
A move that many industry experts agree may be the key to getting consumers from simply voicing their frustration to actually moving their money to a credit union.
It’s also something the $155 million Tobyhanna FCU in Scranton, Pa. has incorporated in its “Divorce Your Bank” campaign slated for November. With a focus on women, an easy switch toolkit aimed at making bill pay easy to do and easy to switch has been a key campaign element.
“One thing we are doing is telling our members ‘we’ll do all the work’ in helping convert to our bill-pay system,” explained Nina Waskevich, vice president of marketing/sales. “I think there is a misperception by the public that it is difficult to convert to a credit union.”
She said Tobyhanna's service reps have been trained in recent months to encourage members “to just bring their pile of bills in to the branch, and we’ll set up bill pay for them.”
A new booklet tied to the “Divorce Your Bank” theme will outline the steps to make the change and will be branded with a female imprimatur in marketing materials.
“We’re going to use the wording ‘perfect match’ and ‘breaking up is not hard to do,’” in the messaging, Waskevich said.
The Tobyhanna “Divorce Your Bank” promotion has already begun with teaser billboards launched during the week of International Credit Union Day, pointing out that the credit union doesn’t charge a $5 monthly fee for debit cards, like Bank of America.
Waskevich said the campaign also will use radio ads, Facebook and a special “Divorce Your Bank” website.
“Right away we picked up on the consumer’s attitude of being fed up with that ridiculous Bank of America fee,” said James Kanaley, president/CEO of the 21,000-member Tobyhanna FCU.
BofA’s move, said Kanaley, to recoup lost income from interchange “is just typical bank reaction of sticking it to consumers.” He noted that he was an executive at banks in Denver and Syracuse, N.Y., before coming to Scranton.
These fees “have become much more onerous” than Congress expected as it tried to protect consumers, Kanaley said.
In Houston, United Community Credit Union has extended its International Credit Union Day celebration to coincide with Bank Transfer Day on Nov. 5.
As part of its approach, the $79 million credit union has challenged its members to take a proactive financial role by pledging to save more, spend less and manage their credit. So far, some 500 members have signed the pledges, which have been posted at the credit union’s four branches.
In addition to the pledge, members are take an online money management course, which features topics ranging from setting financial goals and tracking their spending to building a household budget. Nearly 75 credit union members completed the course within the first week it was offered.
On Nov. 4 and 5, any new member joining UCCU will receive a welcome package complete with T-shirts commemorating their support of the credit union movement. In addition, one lucky UCCU member will also receive a $500 boost to their savings account. The member will be randomly selected from the list of people who complete the money management course.
“With all that is happening in the economy, consumers are eager to take a proactive approach to financial management,” said Shalonda Dawkins, vice president of marketing for United Community. “Our job as financial institutions is to provide them with the tools to make that happen.”
To further the buzz, many credit unions have turned to PTP New Media’s T-shirt company, CU*SWAG for help. At press time, over 2,000 “Join the CU Revolution” T-shirts were in production.
James Robert Lay, PTP New Media grower of relationships, has hopes that credit unions will harness consumers’ desire for change and keep the momentum going beyond just Nov. 5.