In this “International Year of Cooperatives,” credit unions around the world will recognize the contributions cooperatives make every day in the lives of members and their communities.
Visit usa2012.coop to learn more about this special celebration.
Cooperatives of all types are voluntary organizations based on the values of self-help, self-responsibility, democracy, equality, and equity. But not all members understand what makes cooperatives unique.
These three credit unions are educating and inspiring more consumers to choose credit unions and other types of cooperatives.
In the wake of Bank Transfer Day, Chris McDonald, president/CEO of $915 million asset Andrews Federal Credit Union, Clinton, Md., says, “This has been a golden opportunity for credit unions to shine. Media have been on our side.”
High-profile experts and leaders—such as Suze Orman and even President Obama—have urged people to join credit unions, he adds. “We’re seizing the moment and educating people about the credit union difference.”
When several large banks introduced debit card fees, Andrews Federal launched a media campaign called, “Your Money, Your Rules,” to inform members that the credit union doesn’t charge debit card fees. “We also reminded them, while we hold their funds, as members of a cooperative they’re the owners of their funds and they call the shots,” says McDonald.
The credit union also let members know it wouldn’t be adding debit card fees. “We received a huge response to this campaign,” he says. “And we intend to continue to track responses to these types of emails and other media channels into 2012.”
The credit union will track these metrics via direct mail postcards to existing and potential members, newly opened checking accounts, new memberships, and new deposit dollars.
Andrews Federal also plans to use personalized websites, geo-targeted Web banners, and more email, says McDonald. In first-quarter 2012, radio spots will drive business to the website. “This channel will be tracked via website traffic and length of time on site,” he explains.
The credit union will run the campaign throughout the year. “We’ll continually emphasize things that make credit unions different, like our personalized service, lower fees, and better rates,” says McDonald.
How do you measure what members understand? “I think members vote with their wallets,” he says. “We’ll know we’re successful by measuring our membership growth and the wallet share we hold with our members.”
While most members understand the difference between a credit union and other financial institutions, says McDonald, they don’t necessarily understand what the words “financial cooperative” mean. “I think credit unions would be best served by not getting wrapped up in the terminology. Instead, emphasize the difference with fewer fees, more competitive rates, and more personalized service.”
It’s imperative to weave the “credit union difference” into overall brand strategies, he adds. “Don’t stop educating consumers just because Bank Transfer Day has come and gone. There are consumers out there who need banking services, and who need to know how they’ll benefit from credit union services.”
A major differentiator
The credit union philosophy of people helping people is a “major differentiator,” says Robert G. Allen, president/CEO of $4 billion asset Teachers Federal Credit Union, Hauppauge, N.Y. “It has stood the test of time and is a reflection of the goals of credit unions worldwide.”
Another differentiator is the breadth and depth of educational training credit unions provide to members, elected representatives, managers, and employees, so they all can contribute effectively to the development of their cooperatives.
Every year is the Year of Cooperatives for Teachers Federal, says Allen. “We begin educating members at an early age about the importance of saving, the basics of banking, and the differences between not-for-profit cooperatives and other financial institutions.
“We do our part to offer financial education and products and services that help members manage money wisely,” he adds. “We’ve also become more involved in community activities, which help us spread the word about cooperatives.”
While not everyone understands the difference between a credit union and a bank, the number of people who do is growing. It’s encouraging, says Allen, when people realize “we can save them money and offer the same financial products and services as banks do.
“We’ve found that since we ultimately save money for our members,” he adds, “if they understand we exist only to serve them, our members absolutely care about the cooperative difference.”
Bank Transfer Day was a perfect time to emphasize credit unions’ uniqueness, he says. “When members understand this difference, they understand why we can be extremely competitive on all our rates, all the time.”
Credit unions need to continue the dialogue about their unique place in the financial services landscape, says John J. Greskiewicz, president/CEO of $61 million asset Fort Billings Federal Credit Union, Paulsboro, N.J. “We need to let consumers know why credit unions have better products, that we’re owned and controlled by members, and that our boards and committees aren’t paid but are made up of members who volunteer to help direct our organizations,” he says.
The Year of Cooperatives is a terrific story-telling opportunity, he adds. “Since most members couldn’t explain what a financial cooperative is, it’s up to credit unions to educate members and to continue to tell our story.”
Fort Billings Federal has found the best way to do this is to put the credit union philosophy into action through programs such as the U.S. Marine Corps Reserve Toys for Tots Program.
“Being active in our community is a great way to tell people who we are, what we stand for, and how we’re different,” Greskiewicz says.
Fort Billings Federal actively publicizes the fact that it’s not-for-profit. “We need to continually inform members and prospective members that whatever money we make benefits our members,” he says. “Not every member understands that our entire focus (and our reason for being) centers on our members.”
During the Year of Cooperatives, Fort Billings Federal primarily will use its newsletter and website to promote credit union values. “It’s critically important that we enlighten our members about what it means to be a financial cooperative, and why that structure benefits them and needs to be supported.
“We encourage members,” he adds, “to spread the word to friends, family members, co-workers, and others about the ‘world-class service’ and all the benefits they receive at the credit union.”
But credit unions need to do even more, he says. “When people receive something beneficial, they often think in terms of the ‘here and now’ but not how to preserve those benefits. It’s up to credit unions and the entire movement to occasionally remind members that credit unions are privileged to operate as financial cooperatives.
“That’s a privilege we must continue to protect and fight for.”