I heard a great story last week. It was 1934, in Tacoma, Washington. The story begins in a stairwell at City Hall and involves a cigar box.
If you were to start a story with those details and be speaking to someone outside the credit union movement they would probably imagine all kinds of scenarios. But if you’re a credit union junkie, like me, you know where this story is going. It’s the formation of a credit union.
In 1934, my parents had not been born yet. There was no television, internet, microwave ovens, copy machines, email, cell phones, frozen pizza, iPads, bottled water, or air conditioning. There were plenty of banks however. And yet people felt compelled to take their paychecks out of a bank and put it into a cigar box in someone’s desk drawer. Why was that?
Common bond. They knew each other, they trusted each other. It was a simpler time. Money went in the cigar box, and if someone needed to borrow money from the box, a group of their peers (credit committee) would decide if the purpose was provident and for productive purposes. A note was signed and the loan was made. The depositors received a reward (dividend) for trusting the system and have the satisfaction that they helped a co-worker. For decades these common bond credit unions had ZERO competition. We created credit union competitors when we adopted the community charter.
There would be no marketing department in the cigar box credit union for decades. The members were the marketers. The HR department was the ongoing new member drive. The decisions of the credit committee determined the success of the loan promotion. When it was time to formalize out of the cigar box the 1st branch was really the “break room.” Member/owners/co-workers would run the banking errand on their break at their credit union. Positive word-of-mouth was essential for survival.
Fast forward to today – common bond is all but a thing of the past. We have computers that make all the decisions for loan approval in a nano-second. We periodically have “Membership Bribes” to attract new people. We prefer members use the ATM, or online banking rather than come into a branch. There is no common bond. And don’t tell me that “lives, works, worships, in a 12 county area is a common bond.” Oh, and if you have your territory description on your website, please take it down. It’s embarrassing.
Unless your founding story has been tarnished beyond belief (Enron’s Credit Union comes to mind) I think it is our duty to tell it. To preserve it. It’s what makes us unique. It helps to remind us that we are merely the custodians of this history at this point in time.
And here’s your challenge – finding that common bond again. You need to target an audience in that vast territory that you have claimed. Otherwise you will become just another “me too” financial institution marketing with shiny happy people shlepping your 25 bp car loan advantage to people who could care less.
What is your story today? What is your vision for the future? Who will you serve? How will you make the competition irrelevant?