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CO-OP Financial Services Blog: Insight Vault

Archive for February, 2010

Feb 22

National Brand Should Be a Natural For Credit Unions

General / by Samantha Paxson Vice President, Marketing

I have believed for a long time that credit unions should first lift the value of the credit union space and then communicate and differentiate their individual brands. To win members from banks, we need to tell the larger credit union story. Though attempts have been made, we’ve never quite gotten it right because we’ve never found a way execute well on a national scale.

The reason this is so critical is many, many consumers truly don’t understand what credit unions are all about. More specifically, they are not quite sure why credit unions might, indeed, be a more attractive option than a bank. It seems that we market in a competitive fight to gain the same piece of credit union consumer market share, rather than coming together to go after the population that banks with a bank. Although our industry is feeling the heavy burden of the economic downturn, negative growth, consolidation, regulation and legislative issues, there is a hot opportunity to cooperate as a movement and take advantage of the distrust and distaste of banks.

The credit union brand in its most organic, natural state is trustworthy, selfless, sincere, honorable, democratic, honest, hardworking and downright American. It is in the fabric of our character to share, work together and deliver what’s good for our members, not our shareholders. These values are what the financial consumer is hungry for right now. Wouldn’t it be the ultimate coup d’état if we could cooperate on a national scale and actually get it done? Come to think of it, that’s what credit unions are all about – cooperation! A nationwide, grassroots, “of the people, by the people, for the people” awareness campaign coupled with a more traditional media effort, would make a big difference – if it’s done well.

We would need to be careful to simplify our message around the value of credit unions overall, differentiating credit unions from banks and helping consumers emotionally connect with the reasons why they should pick the good guys. Because that’s who we are. The Milk Advisory Board has disciplined itself to stick with one campaign and a single message and stay with it. We would need to have the will-power as a movement to do the same.

Though the time to strike is now, questions remain. How do we get the message right, get the funding together and mobilize quickly without bogging ourselves down in bureaucracy, individual agendas and marketing by committee? How do we elevate our collective marketing effort without it being slick and bank-like, but instead communicate our value in a fresh, authentic and enthusiastic way? It may be “Pollyanna” of me, but if we could come together nationally, find a way to make it work and deliver the very compelling facts about credit unions, we could make a big impact on our industry and gain the membership numbers we’ve never believed were attainable.

I would like nothing more than to see credit unions and all those prospective credit union members out there searching for an alternative to their crummy banks, actually come out ahead in this recession. With the right strategy, sometimes the good guys actually do finish first.

Readers of Insight Vault, what do you think?

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Feb 15

Be a Winner – Visit Booth 309 at CUNA GAC

General / by Eric Porter Executive Vice President, Business Development and Marketing

CO-OP’s motto is “Of you. For you,” which speaks to our singular purpose to help you help your credit union members. At CUNA’s Government Affairs Conference, taking place Feb. 21-25, 2010, in Washington, D.C., the “For you” portion of our motto could also mean great prizes when you visit us at Booth 309.

At five separate stations in our booth we will be featuring displays on:

  • Network Services – CO-OP Network is the premier CO-OP solution for member access, convenience and member connection to their credit unions.
  • Payment Processing – CO-OP Debit is designed to meet every debit program need; CO-OP ATM allows you to comprehensively manage an ATM portfolio.
  • E-Commerce Solutions – Advanced technology at your disposal, including CO-OP Check Imaging products and CO-OP Mobile.
  • CO-OP Shared Branching – The convenience of full-service branches, virtually anywhere.
  • Call Center Services – Discover 24/7 member support with the new CO-OP Member Center, offering LoanLink and Member Services.

All five displays feature fun games for you to play and an opportunity to win a prize. When you visit booth 309, pick up a play pass and have the CO-OP staff member at each display station mark the appropriate box. Visit all five stations and you will win a gift and be entered to win an Amazon Kindle e-book reader.

If you are staying through Wednesday night, Feb. 24, join us for the Gala Reception and Dance, sponsored by CO-OP Financial Services.

Another outstanding opportunity to gather together early in 2010 is THINK ’10 Conference in Scottdale, Ariz., April 18-21, which we also sponsor. This conference has always been about bringing you top-flight speakers who can bring actionable tips from the experience of their own industries, and make them easily applicable to the credit union movement.  Please go immediately to www.co-opthink.org to register – it’s free to credit unions!

I hope to see you at both conferences!

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Feb 8

‘Discovery Marketing’ Through Charitable Partnering

General / by Bill Prichard Manager, Public Relations and Corporate Communications

According to former smart USA president and future  THINK ’10 conference speaker Dave Schembri, one of the best ways for credit unions to connect with their communities, build member loyalty and attract new members is to engage in charitable activity.

“One of the most effective ways of marketing is ‘discovery marketing,’ when consumers learn about you in a natural way, not through conventional advertising,” says Dave. “One of the best ways that potential members can discover your credit union is through charitable partnerships. Consumers today are looking for products and services providers that show civic mindedness. When they see that a company is not only putting its own money into a charity, but its employees are also putting their own time and money into it, they know that civic mindedness is genuine.”

Dave, who will be speaking on “Street Smart” at THINK ’10 this April, knows this well as a 30 year veteran of the car industry, and a member of the Board of Directors of the Boomer Esiason Foundation, which raises research funds to find a cure for cystic fibrosis.

In 1996, the credit union industry established the Credit Unions for Kids initiative to partner with the Children’s Miracle Network and raise funds for children’s hospitals throughout the country.

There are few better ways for you to uplift your communities than by holding a Credit Unions for Kids fundraiser. The dollars your credit union raises can be designated for a hospital directly in your area. What’s even better, there is a way to add on to what you raise.

CO-OP Financial Services, on behalf of its member credit unions, offers the CO-OP Miracle Match program. In 2009, the CO-OP Miracle Match program provided $1 million in matching funds to fundraisers supporting Children’s Miracle Network.

If your credit union is considering a Credit Unions for Kids event in 2010, we encourage you to go to our CO-OP Miracle Match Web page immediately and complete an application.

From the perspective of CO-OP Financial Services, we are incredibly impressed with the generosity of the credit union movement. There can be no doubting the sincerely of the civic mindedness of credit unions and their employees. We’ve also been impressed with their creativity.

One activity from 2009 was the “Shirt Off Our Backs Jersey Auction with the River City Rascals” conducted in August by 1st Financial FCU of St. Charles, Mo. 1st Financial FCU is a sponsor of the River City Rascals, a minor league baseball team in the St. Louis metropolitan area. Following the Rascals’ last game of the season, they auctioned off the players’ jerseys. The auction raised $4,000 and CO-OP Miracle Match produced $4,000 more for a grand total of $8,000 for the Children’s Miracle Network.

According to 1st Financial’s Michelle Rosner, “It was a natural fit for our two organizations to come together for this great cause. The River City Rascals are an economical alternative to high-cost sports in the area, and we are an economical alternative to high-cost banking!”

What have you got planned for 2010?  Please let us all know by leaving a comment – we hope your great idea will lead to the discovery of many others!

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Feb 1

Prepaid Cards – To Be or Not to Be, or Simply Teach Old Dogs New Tricks?

Card Services / by Kathy Herziger-Snider Vice President, Product Development

Sometimes the best new technology we have is teaching old dogs new tricks. Take, for example, prepaid cards.

Recent economic pressures are placing consumers in positions where they need to control their spending, reduce debt or find new ways to pay for merchandise. The government is also involved and new laws aimed at protecting consumers for fees are forcing many financial institutions to rethink their payment disclosure notices and redesign their fee structures. Limits on overdraft fees and full disclosure of fees in all situations has the mail flooded with rate increases and creative new fees, which in the long run may not offer the consumer the protection the legislation intended.

Credit unions – established to serve their membership and communities – are in a perfect position to address the issue at hand, serve individuals and perhaps even grow a little bit as other financial institutions are seeing consumers searching high and low for a financial partner they can trust with their money.

Prepaid cards are great. In fact, I have a couple floating around my wallet.  However, I wonder who keeps the funds that I don’t spend, when do the fees kick in for that card hiding in the bottom of my wallet and what happens if I lose the card? I even purchased a couple as gifts for that certain person who has everything. Still, there is another alternative that would allow credit unions to meet consumer demand for low-cost, safe and effective electronic payments.

As I step into this risky position …

I suggest to the credit union industry that you already have the tools and technology you need to offer another viable option to prepaid cards. Why not simply set up a new account type within your existing chart of accounts and keep the rules simple and clear for its purpose. Here are a couple of ideas:

  1. Issue no checks – no cost, no risk.
  2. Back the account with a personal financial management service like Jwaala.
  3. Establish a reasonable daily withdrawal limit to control risk.
  4. Allow and encourage remote capture, automated clearing house and branch deposits through a shared branch system.
  5. Issue a plastic card using existing card stock or inventory to control costs.
  6. Restrict all overdraft activity to reduce risk. This also eliminates the pesky overdraft fees which force some consumers into a virtual downward spiral of multiple fees all tied to a single mistake.

Using these approaches, credit unions can serve consumers that may not qualify for the typical payment options. Consumers benefit because they have a means to provide payment that is widely accepted, and helps them minimize mistakes and jump on board a road that helps build a sound credit relationship with a credit union they can trust.

Who knows, someday the blink of my eye may validate my identity, pay for coffee and get me into the theater. My watch may become a mobile payments FOB carrying my entire financial relationship; and my Facebook and LinkedIn pages and tweets may appear as images on the reverse side of my glasses. Until then, I say we take a look at the technology, services and tools that we have and see how we can all get creative to help consumers get the biggest bang for their buck.

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