Weber notes that even though some 20% of credit unions now have a community charter, the vast majority are not growing.

"There are two big surprises when a credit union gains a community charter," Weber says. "First, absolutely nobody is beating a path to your door. No. 2, you have to completely transform your business, operational, and sales models."

If good service were the secret, credit unions would be thriving in membership growth today, he continues. "Unfortunately, good service is not the bar by which people switch financial institutions. We've had seven years of the worst growth in history in credit union membership. You absolutely have to be working much, much harder than simply saying 'We have great member service' when everyone else is saying it."

Consumers' choices aren't limited to banks and credit unions, Weber states.

"ING swept $80 billion of savings out of the financial industry. Not a bank, not a credit union. Proliferation of competition and the ability to buy products on-line has become staggering," he says.

"Ten years ago the credit union industry owned the auto lending business. Today it's an unbelievably difficult business. Consumers have opted to have a lot of eggs in a lot of baskets. It's not that they're diversifying their funds, it's that they're being marketed to and attracted to whoever makes banking the easiest, most convenient and simplest, and offers the greatest value proposition."

"Do you have a unique and compelling value proposition? ING and USAA do. They also have tremendous visibility in media and market awareness."

So that's the challenge: how to retain current members, attract new ones and enter new markets in an era marked by such stiff competition. What's a credit union to do?

Weber cites some steps that are at the top of the to-do list:

-Offer convenience through a robust and growing branch network.

-Focus on a niche or niches, not just SEGs or communities. That niche may be people who highly prize personal service delivered through a convenient branch network. Another niche may be people who couldn't care less about branches and want to do all their business on-line.

-Have employees who are very savvy at building a brand and leveraging it both externally and internally. Internally every employee must work together to build the same brand promise.

-Thoroughly research the geo-demographic characteristics of the markets you're entering. Understand their lifestyles. Then assess who you're good at serving. Is it a value-oriented membership in the middle-market segment? If you've targeted military bases and Department of Defense installations, the demographics will look very different in high-income Virginia than in rural Mississippi.

Weber also suggests credit unions identify consumer shifts. One such trend, offering what he considers a market rip for credit unions, is women who are single heads of families. They're looking for information and education, they're time-starved, and they need services that benefit their children in learning financial skills.

"One of the fastest-growing categories of small businesses is businesses owned by women," Weber notes. "Banks are not beating a path to their doors. Credit unions considering offering small business services will find a tremendous niche."

Still another niche is Generation Y, roughly those born from 1977 to 2002. Weber describes them as Web-savvy, sophisticated, intelligent, and very socially conscious. He believes they're tremendously brand-loyal, more than many older generations. If you can get the first debit or credit cards in the hands of 14- or 16-year-olds, "that's huge."

Miriam De Dios is emerging markets director at Coopera Consulting, a subsidiary of the Iowa Credit Union League. She points to the Hispanic market as another niche credit unions can pursue.

"More and more we're seeing credit unions waking up to the need to reach new markets," she says. "Credit unions are facing flat growth, aging memberships, increased regulatory pressures, more competition — a lot of factors."

"Sixty percent of Hispanics are unbanked. Close to a third of the U.S. population is considered underserved. There's definitely a lot of opportunity out there."

She sees minorities and immigrants, especially Hispanics, as critical for future credit union growth. Their population is growing, they're a relatively young market, they're entrepreneurial and opening up new businesses, and they're growing in purchasing power.

Just as Weber emphasizes understanding demographic segments, De Dios states it's important to grasp these opportunities and develop a consensus from the top down that the credit union needs those new markets.

"You need to look at these markets in a new way, through a different set of eyeglasses you haven't put on before. You have to adapt to these markets, instead of waiting for them to adapt to you," she says.

De Dios cites a four-piece strategy:

-Hire and retain personnel with bilingual skills and bi-cultural insight.

-Review your product mix to make certain you have the appropriate products and services.

-Track your market. What is your member identification policy? Is it flexible enough, yet compliant, to serve these new markets?

-Budget for marketing and promotion. Once the infrastructure is in place, it's time to spread the word. Make certain translations are not only literally correct but culturally on target.

"Word-of-mouth is important in the Hispanic and immigrant population. How do you spread word-of-mouth? You go where the community is. Develop partnerships in that community," she says.

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