This is my second CU Branding 101 post. If you didn't read the first, here's a link. Don't worry, this post will wait until you get back!
OK, so you get the gist. My fundamental belief is that credit unions need to be differentiated to succeed long term, yet almost all credit unions are not significantly differentiated. To illustrated my point, let me contrast the financial services industry with the television industry.
Fifty years ago, there were only three channels to choose from.
Occupying a unique position in consumers' minds was easy. As long as you filled the schedule with a variety of programs, you were guaranteed to have an audience and a full roster of advertisers.
Fast-forward to today and there are dozens of stations to choose from. By necessity, new stations are differentiated to attract an audience and advertisers. The difference between every station is obvious.
Most stations have a descriptive name and a defined niche they are seeking to connect with. Just think of The History Channel, Much Music, The Golf Channel, SportsNet, The Shopping Channel and Court TV to name a few.
To contrast, this is how the financial services industry looks from the consumers' point of view. There are dozens of brands that essentially look like the big banks that established the marketplace. Each going after the same target with essentially the same story and offering. The differences are so subtle and are not compelling.
If you don't believe me, ask your spouse, kids or neighbours to describe the difference between 10 financial institutions.
Think about how well positioned TV stations are in comparison. TV stations have the added bonus of being able to promote their offerings on other channels, in TV Guide and in the local daily newspaper. Also, let's not forget that consumers can access every choice from the couch!
Here's the irony. As competition has intensified, credit unions have moved away from the things that naturally made them different.
- Serving employee groups and small regions to now serving larger geographic regions and broader fields of membership.
- Using city or employer names to now using acronyms and generic aspirational names.
These shifts have been done to appeal to larger groups of people. However, as more credit unions compete against one another and more alternative players enter the scene, all institutions are looking and feeling the same.
To make matters worse, consumer can't easily sample financial products and services.
Owning a differentiated position has become crucial. Your position has to be so differentiated and compelling to even get noticed. And by the way, being community oriented, member owned and providing better service is not a differentiated position.
These principles may seem obvious, yet most credit union leaders are afraid to position their organizations for fear of limiting their credit union's potential.