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One of the most difficult concepts for credit unions to grasp today is that of target audience. And yet every single credit union alive today owes their very existence TO a target audience. Firefighters, teachers, postal workers, churches, big employers like Boeing, IBM, GM, and the like. The common bond is what launched our industry and carved a niche in a very crowded marketplace.

But fast forward today and through mega-mergers, charter changes, two recessions and some bad management most credit unions have adopted a community or multiple SEG charter. Their territory – anyone who lives, works or worships in a multiple county area – is confused with target audience.

One of the arguments I hear against declaring a target is the misconception that you will exclude a group of people. After all, everyone needs financial services so why would I turn anyone away?

In my opinion there are two reasons why it is absolutely necessary to take the time today to figure out who your target audience really is:

1. Targeting an audience focuses your very limited resources.

2. Targeting an audience allows you to innovate and make the competition irrelevant – again.

There is one shining example of how a company innovated through targeting and as a result dominates their marketplace. Here’s the story of the iPod.

Steve Jobs readily admits that he came to the MP3 player game late. His passion was video. But when he realized there was evolution of portability and durability happening at a record pace (get it?) he used the power of psychographic targeting to disrupt the music industry.

Most people think of target audience around demographics. Females age 25-35, for example. To really innovate, that’s too broad. A psychographic approach to that same group might be “single moms with toddlers.” Psychographics identifies a problem that exists and aims to solve it. Every time I look to solve a problem I begin my thought process with “How might we……” In the case of the single moms “How might we make the errand of banking joyful for single moms with toddlers?” By asking that question and narrowing the audience I’ll bet you can immediately think of changes you would make to your lobby, service delivery, speed, etc.

Okay – so back to Steve.

Consider the evolution of music. Let’s go way back to the 1970s….

The vinyl record album. 
Problem? Durability and portability (you couldn’t play it in a car)
Solution? The 8-track tape and player

The 8-track tape player
Problem? Took us away from the familiar Side A and Side B – music was hard to find on demand. Not as durable as we hoped.
Solution? The cassette tape.

The cassette tape.
Problem? Still had some durability issues but gave us the ability to record our music – the mix tape was born.
Solution? The compact disc (CD)

The CD
Problem? The initial roll-out did not allow for recording but the quality was so great, music junkies replaced their vinyl and tape libraries with CDs.
Solution? The audio file format and the MP3 player

Here’s where it gets interesting. As you can see from the evolution of music above, the focus was always on durability, portability and not until the CD format, quality of sound. By now people demanded all of those features. And the person that was most interested was this target audience:

Raise your hand it you were the type of person that would call a radio station, request a song, and then stand by your tape recorder and wait for it to be played so you could record it?

In every audience that I ask this question there are always a small group that fit this profile. The audience always laughs, the “guilty” however are proud of it and when they see who else did it they form a bond – a common bond.

That was the target audience that allowed Apple to truly innovate. It wasn’t the iPod that was revolutionary. Is was iTunes. He knew that there were people so passionate about controlling their music listening experience that they would spend hours making the perfect mix tape. How easy is it to make a mix tape with iTunes? It’s insane.

And so consider this, and this happened two weeks ago. I asked a group of 75 credit union employees to raise their hand if they were the target for iTunes (the song requesting, mix tape making crazy). Only 4 people raised their hands. Then I asked, how many of you have iTunes today?

Every hand went up.

I rest my case.

Now go target an audience before your competition forces you to merge because you are still trying to be all things to all people.

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May 2023