CUNA's Member & Nonmember Survey Results

Help Nonmembers Overcome Barriers

Five things CUs can do differently to convince nonmembers to join.

August 12, 2013

Credit unions generally have lower rates on loans, higher rates on savings, and friendlier fees than banks, not to mention superior service. Year after year, customer satisfaction surveys support these claims.

But banks still command the lion’s share of consumer finances. Credit unions hold only 9% of consumer savings and 10% of installment credit outstanding.

If credit unions are a better deal, why are so many people—about 66% adults in the U.S.—not credit union members?

CUNA’s survey of nonmembers reveals credit unions would have to do five things differently to get nonmembers to join credit unions.

Respondents say credit unions would have to:

  • 1. Provide more information about the advantages of credit union products and services (17% of nonmembers offered this as a prerequisite for joining a credit union);
  • 2. Provide more convenient branch locations (17%);
  • 3. Offer higher interest rates on savings (17%);
  • 4. Offer lower rates on loans (15%); and
  • 5. Have lower service charges or fees than other financial institutions (13%).

The fact that no one single issue dominates the survey responses might be frustrating for credit unions trying to focus their energies and efforts.

The most difficult nonmembers to attract will be the 23% of respondents who say there’s nothing credit unions could do to persuade them to join.

Gen Y wants convenience

“A lack of convenient credit union locations has led the list of objections for many years,” says Jon Haller, CUNA’s director of corporate and market research.

But, he adds, “It’s starting to fade as the main objection as more credit unions offer and promote their online and mobile banking services.”

Convenience is also an important issue for Generation Y.

“Younger nonmembers want convenience, and for them that really means mobile banking,” Haller says. “While many credit unions offer mobile banking, the perception is that they don’t, or they don’t offer an experience comparable to that of banks.

“Young nonmembers’ perception of credit unions—if they have one—does not represent reality,” Haller continues. “They’re oft en quite surprised to discover that many credit unions are just as technologically advanced as most banks. Credit unions have some work to do to let young nonmembers know about their mobile offerings.”

Haller acknowledges it can be a delicate balancing act to attract younger members without alienating older members. You’ll want to tailor your marketing messages for different audiences through social media and more traditional marketing channels.


“Perhaps young adults don’t expect high levels of technology because credit unions are smaller, less conspicuous financial institutions relative to the regional and national banks,” Haller says.

“But online banking, mobile banking, apps—they’re all present in credit unions. What’s not there in some cases is an aggressive marketing plan to let nonmembers know what they’re missing.”

NEXT: Just like REI

Just like REI

Another tricky concept to communicate is credit unions’ not-for-profit cooperative business model.

This is largely—but not completely— unfamiliar to young adults, because cooperatives aren’t common business models in their world.

But younger nonmembers typically embrace the concept once they understand how cooperatives work and how they differ from banks’ for profit model.

When explaining how credit unions operate, one of the best analogies is REI—the outdoor outfitter that also happens to be a cooperative, says Haller.

REI pays dividends to its members each year. Most young nonmembers are familiar with REI and the dividend announcement that comes in the mail every winter.

Credit unions, like REI, are cooperatives and pay dividends. Some credit unions mail out dividend checks, some deposit the dividends directly to members’ accounts, and some invest those dividends back into their operations to provide better service to their members.

“Once you explain that credit unions are like REI, young nonmembers instantly get it,” Haller says. “Otherwise, it’s a pretty complex concept to explain. But it’s well worth the time and effort.”

Need to know

Another challenge credit unions face is that young nonmembers tend to be inexperienced consumers of financial products and services.

They might not spend a lot of time evaluating the differences between auto loans, checking accounts, or financial institutions until they absolutely must.

“They have to go through a life threshold first,” Haller says. “Then they might realize that credit unions have better rates or fees, and they might start asking why. But by then, most of them have already established relationships—checking accounts or credit cards—with other financial institutions. Once that happens, switching to a credit union becomes much more challenging.”