Now Everyone Can Bank Here!

That was the advertising rallying cry of many credit unions over the last several years. As field of memberships opened up to “lives works and worships in every county – or the entire state! “

 

At a time when the lines between banks and credit unions were blurred, we almost erased them completely by purposefully destroying a primary difference – you had to have a real common bond to join a financial cooperative. 

 

By simply publishing your field of membership definition and confusing it with a membership campaign assumes that everyone wants to join but really didn’t know they could. According to our numbers, the majority of people didn’t care enough to move their relationship. HR 1151 passed on August 7, 1998. By 2002 membership growth was the lowest it had ever been – and if you consider this was the time that many credit unions opened up to indirect opportunities – it was an epic fail.

 

But things are changing. I recently heard Chip Filson talk about the countercyclical potential that exists right now. The Dow is down, personal savings rate is up, bank lending is down – credit union membership is up. We are the flight to safety. We are known for being rather common in our practices – trustworthy might be a better word. I say we embrace that. 

 

I got a link to a great article from Callahan & Associates yesterday. Written by Elliott Kashner: 

 

Now is the time to reevaluate the efficiency of your growth strategy. Imagine you are bringing in new members at 4% of the current membership, but letting 2% slip out the back door. Would it cost your credit union more to increase new member acquisition to 5% or reduce member attrition to 1%? Further, how will a high member turn-over rate influence the effectiveness of your cross selling?

 

My hope is that this recession will kill membership drives that feel like bribes.  We need to stop cheapening the entry to our club with phrases like “It’s only $5.00 to join” or “If you open an account today we’ll give you a free iPod!” Instead, we need to nurture and cherish the members we have. We need to reward them for their loyalty at every opportunity. We need to listen to them – what drives their loyalty? Quite simply, we need our members to market for us again.