Earning hopeless devotion to your Credit Union

CUs must put themselves out there, reveal the best version of themselves and show consumers why they should be The One.

Anyone reading this has probably seen the classic movie “Grease” – if not in the theater when it was released decades ago, then on VHS, DVD, streaming channel or while lounging on a blanket at an outdoor summer movie screening event. In one of the movie’s most-recognized songs, “Hopelessly Devoted to You,” Olivia Newton-John sings, “My heart is sayin’, ‘don’t let go, hold on to the end,’ that’s what I intend to do, I’m hopelessly devoted to you.”

Maybe this is a stretch, but isn’t that the sentiment credit union leaders would like members and prospective members to express about their institution? Total, unconditional commitment? (The only deviation from the song, of course, is that once a credit union wins a member’s devotion, it will whole-heartedly embrace it, not push their love aside.)

Yes, the ideal scenario for a credit union is to get more members into a monogamous, long-term relationship – to become the exclusive provider of every one of their financial services needs and remain that way for the member’s life. And it would be great if a magic love potion existed that credit unions could use to transform any consumer eligible for membership into a devoted member.

But just as teen girls in the 1990s learned after testing out the tips from cringy magazine articles like, “How to Make Your Crush Obsessed With You,” it doesn’t work that way. As with affairs of the heart, credit unions should demonstrate all the great things they have to offer, focus their energy on those who take an interest in them and move on from those who reject them, being sure not to take the rejection personally.

If credit unions had a dating coach, they would receive advice similar to this: Pique the interest of your prospective suitors (members) by offering them something you know they’ll be really into (a loan to help pay for an immediate need).

And there are things – things more intellectually stimulating than new hair or a revenge body – that credit unions can do to win over their objects of desire, who may see the relationship as noncommittal and need a compelling reason to go all in.

One such strategy is to snag the member in an area that’s harder for them to pull away from, like direct deposit. During an interview for the feature story in the July print issue’s Focus Report on CU-Fintech Partnerships (https://www.cutimes.com/2023/07/24/growing-with-a-fintechs-help-intentionally-and-safely/), Barry Kirby made this very recommendation. Kirby is the co-founder and chief revenue officer at Union Credit, a fintech focused on helping credit unions acquire new business by targeting eligible members online with preapproved loan offers.

“You’ve acquired the member – now how do you fully acquire them? Is there an opportunity to be that one primary financial institution for that one consumer?” he asked. “Granted, that’s a very tall order, but when they’re picking your credit union, can you allow them the instant ability to redirect their direct deposit payroll to you in exchange for some kind of discount on their [loan] rate?”

Kirby continued, “The direct deposit, the payroll, that’s a source of stickiness. It’s hard to redirect your entire payroll because you have to go to your employer, fill out a form, it’s a process.”

He advised credit unions seeking long-term members to focus their energy on chasing checking account deposits as opposed to CD deposits. Think of the people who become members of your credit union solely to earn a return on your high-rate CD special as the players to avoid in your city’s local singles scene. They’ll come in hot and heavy, but leave you feeling shattered. Oftentimes, they’ll take advantage of your hope for a relationship just to get laid, then move on to someone else.

“[CD deposits] are basically hot money,” Kirby said. “You’re going to bring them in for a six-month CD, and then they’re going to turn it over to the next institution that has the next best rate. It’s like the auto refinance game, where they’re always looking for the next cheapest rate.”

Union Credit is hoping to convert new members to committed, lifetime members by reeling them in through a loan – something consumers proactively seek out at the time of a sudden financial need – then selling them on the benefits of moving their checking account over to the credit union.
“Most consumers aren’t out there thinking, ‘I need a new checking account.’ However, most consumers face a time when their kid is going to camp and maybe they need a personal loan to pay for it,” Kirby said. “A loan is more of a necessity that needs to be addressed right then, but you can always kick the need for a new checking account down the way as long as you need to. So if we’re going to acquire that checking account payroll during that loan event, that’s where you start coupling in that lifetime membership.”

Another thing credit unions can focus on to make themselves more appealing to prospective lifetime members is that old buzzword, innovation. According to the February 2023 Filene Research Institute report “Credit Union Innovation: The Member Perspective (https://Filene.org/learn-something/reports/credit-union-innovation-the-member-perspective),” innovation leads to member loyalty because it spurs feelings of fulfillment and excitement. The report found that while credit unions are doing a good job making members feel fulfilled, they’re not as great at exciting them. Basically, credit unions are checking all the good-partner boxes – doing the dishes, taking out the trash, calling when they say they will – but it’s time for them to break out the Dom Perignon and sprinkle rose petals on the bed.

The Filene report stated that according to the American Innovation Index
(https://americaninnovationindex.com/) scoring system, credit unions received an average Excitement Index score of 53 out of 100, which was neither high nor low compared to other firms (however, one credit union, the $166 billion, Vienna, Va.-based Navy Federal, is exciting members more, with an average score of 63). Excitement was defined as an emotional state opposite of indifference that members feel when interacting with their credit union. “The implication is that credit unions generate as much excitement in their interactions as any typical brand, but there is demonstrated opportunity to do better,” the report stated.

Credit unions’ average Fulfillment Index score, on the other hand, was 80 out of 100, higher than the average score of 71 that other national brands across various sectors achieved. The report defined fulfilled members as those who feel content, happy, pleased and satisfied when interacting with their credit union.

What, then, can credit unions do to boost excitement – the equivalent of that butterfly-filled, racing-heart, can’t-sleep feeling often experienced early on in a romantic relationship? It starts internally, when a credit union develops innovations designed to improve member experience and value, then moves those innovations downstream, enabling members to start experiencing changes such as new products, lower fees, better rewards, top-notch interactions with employees, or a redesigned website or app, according to the report. “Some of these innovations trigger excitement because the credit union is doing something new and different, and this change ultimately makes the brand more attractive for doing business,” the report read.

If credit unions had a dating coach, they would receive advice similar to this: Pique the interest of your prospective suitors (members) by offering them something you know they’ll be really into (a loan to help pay for an immediate need). Once you have them by your side, demonstrate the value you can add to their life if they choose to stay with you forever (explain how they’ll be rewarded if they move all of their money into the credit union and utilize it for every one of their financial needs). But don’t fall into the trap of predictability –keep your partner interested in you by spicing things up from time to time (continue innovating at your credit union through new products, services and delivery methods). The last thing you want is for them to get bored and start having a secret affair (open an account at another financial institution behind your back).

As a credit union, you know you deserve more than a summer fling. Put yourself out there, reveal the best version of yourself and show consumers why you should be The One. If they still end up falling for BofA over you, that’s their loss, not yours.