Don't believe the hype that smaller credit unions just can't compete.
"The biggest thing is all of us need to abandon that old way thinking," said Kelley Parks, who specializes in helping small credit unions with her firm gira{ph}. "If anything, the past few years taught us about too big to fail banks is that if you look around, there've been more than a few disruptive Davids beating out Goliaths across industries. In-n-Out Burgers has only seven menu items, and they own their markets. It's not about who has the biggest marketing budget wins. It's about delivering what your members want, and smaller niche organizations can have the advantage by being very nimble."
She added that about 70% of credit unions are under $25 million in assets and serve some defined niches such as teachers, firemen and others. And it could be argued that these smaller credit unions are closest to really knowing their members' needs and can react and respond quickly.
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"Go back to the consumer pain points and figure out how your credit union can help and build on that affinity," said Parks. "Make sure you focus on growth the right way for the right reasons beyond looking at what peers are doing and choosing me too direction. Small credit unions need to think like an entrepreneur to differentiate. At LL Bean, even if you light their clothes on fire, they'll return your money. That is a remarkable guarantee and can be a lesson for small credit unions. They can do something unique and remarkable and innovate instead of just being like another credit union to get ahead."
According to Parks, some small credit unions get mired in myth that they must have a traditional marketing approach, such as a newsletter or direct mailings to build awareness rather than determining the challenges facing their members and delivering unique solutions.
"If you can go out of your way to help ease your members' pain points, that specialization is what will help you stand out because those members will become evangelists and tell others and that is more effective than any campaign," said Parks. "Small credit unions have to give their members reasons to be evangelists. Asset size is talked about like a badge of honor, but the real success is not doing what everyone else is doing."
Parks pointed to Durham, N.C.-based Latino Community Credit Union as an example of a smaller credit union that has reached out and connected with members by creating helpful programs based on meeting previously unaddressed needs in the community. From creating a financial education program that adapts to suit members' changing needs to kicking off its microbusiness services with a movie premiere of Roberto's Dreams at a local theater, the credit union continues to expand and grow at a time when many financial institutions have had to close their doors.
Parks said it's important that small credit unions get the basics right first. That means listening to members, figuring out what it is they need, finding the consumer pain points of the niche you serve and providing interesting innovative solutions. She added that marketers should also pound the pavement and reach out to local businesses or other small credit unions to find where there are opportunities to collaborate. In addition, small credit unions should find ways to revamp their websites and walk through their branches with fresh, critical eyes to ensure their physical and virtual presence is in sync with their brand image and promise.
"Just because you are a small credit union there is no reason to have an ugly website, and a can of paint can do wonders to make sure everything about your image is consistent from Web to branch," said Parks. "Too often small credit unions perpetuate that preconceived Mom and Pop image that so many consumers have of credit unions. Really look at your website and walk through your lobby as if you are a new member, and you'll be astounded by what you neglect to see every day."
She also cautioned against jumping on the social media wave without having the basics in place because essentially it should be used as a tool to enhance an existing strategy by connecting with a unique group of consumers. In addition, while financial education can be a great business development tool, again she suggested that small credit unions be unique in their approach to it. So, for example, if a credit union wants to grow family membership, then instead of posting signs for a course at the branch, contact and present at the next local Moms group meeting.
"Maybe I'm overly optimistic, but I hope there will be more collaboration among small credit unions, that they'll be more innovation in thinking about how to make themselves stand out, that I'll see less ugly websites and branches and that there will be more succession programs in place to develop talent from within so that a small credit union doesn't disappear simply because a CEO is retiring," said Parks. "The very sad fact is that we lose a small credit union every dayy. I think Chris Bough, CEO of Wayne County Community FCU, said it best: Small credit unions need to be like a jet ski not the Titanic because a jet ski could go around the iceberg."
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