The business value of personal connection

Who are you striving to be?

Thanks to this photo of Roy Bergengren recently shared by credit union advocate Matthew Cropp of Vermont, I realize that we now have fewer credit unions in the U.S. than at any time prior to NINETEEN THIRTY-NINE. Think about that for a minute…. what does that mean? Now some would explain that away saying that overall membership in the U.S. is at an all time high. So let’s put those two equations together: more people, but fewer institutions. Is that a good thing? A bad thing? Just a thing?

What would Ed Filene and Roy Bergengren think? That after the past 75 years of credit union advocacy, we now have fewer credit unions serving all of America? Are the products better than before? Is the service worse than before? Is the differentiation between credit unions and banks better or worse than 75 years ago? Do we still have a need for credit unions, or has the reason they were founded pretty much gone away? Is there more opportunity than ever before for smaller CUs to succeed? Or is it just too challenging, and every CU below $10m in assets should just get merged into a larger one until there are none in this size range anymore? Do you need to offer every financial product and service that your competitors do in order to succeed? Or does that pursuit just drain time and money resources away from your CU’s core mission?

What is the mission and purpose of your credit union? Who are you trying to be? Who are you serving? What is your connection like with the members you serve? Tight? Barely there?

One of the reasons I bring up this topic is that it seems to me that more and more credit unions are basically operating as tax-exempt banks; attempting to grow no matter what, and becoming more generic in appearance and attitude (and losing connection with the group that founded them). To operate this way may serve the needs of the institution (although it may actually not), but in any case seems a disservice to the membership, and perhaps just as importantly, a disservice to the CU movement as a whole. If a credit union is going to operate like a bank, it should just acknowledge that fact and change charters and switch to being regulated and insured the FDIC instead of NCUA. That tax-exempt thing is not really that a great a business advantage anyway.

But the other surprising thing about credit unions operating like banks (aside from failing to live up to its mission statement) is that in many cases, the trend is away from generic large institutions and stores, and TOWARDS unique, local, and independent organizations. So-called “big box” stores are on the decline; while one-of-a-kind shops find their niche. Many people avoid chain restaurants in favor of unique eateries.

But being different, in and of itself, is not a sustainable business model. To increase success in business, you need to provide something different for which there exists a customer base. One way to approach this differentiation is to employ technology to make it easier for your customers to do business with you, whether that be in facilitating the process of ordering products and services, the delivery of those products and services, or help in using those products and services. From our own point of view; we’ve found that every time we make our own technology easier to use, more streamlined, and more personalized, it pays dividends immediately.

How are you using technology to differentiate and personalize your credit union? Are you using technology to strengthen the connection between your employees and your members, or is it weakening that connection? Who are you serving, and how are you making their experience with you easier and better? If providing “better, more personal service” is the differentiation point of your credit union (as many state), is your technology living up to that promise? What are your thoughts?

Got beer?

This morning, the twittersphere is a-buzz with a 62-page white paper from the CUNA Marketing & Biz Dev Council entitled: A National Brand for Credit Unions: A compendium of opinions about a national brand for the credit union industry. (side note: interesting that the authors chose to call it an industry, when many insiders call it a movement.) I’ve only skimmed the report and certain sections of it, but my opinion on this hasn’t changed.

Nearly two years ago, I wrote about why I think a national CU Brand campaign is a bad idea. The movement/industry’s strength has always been its diversity. It’s never been about economies of scale. It’s about helping people in a meaningful way. CUs are definitely not charities. But their fundamental reason for being is to help regular people improve their financial lives. It’s a really exciting mission which it seems gets too often overlooked in extraneous activities. Banks DO NOT exist for this purpose. Credit unions DO exist for this purpose, and it’s amazing that we haven’t told our story better to more people who would LOVE to hear this message— IF it’s backed up in reality, and it’s not just fluffy words.

Over lunch at Elizur’s Tavern today with EverythingCU.com COO Matt Taggart, who has recently brewed some home-made beer, I had an insight– Beer is the same as Credit Unions. (Not really, but bear with me for the sake of analogy.) Is the beer industry calling for a national beer branding campaign? No. And where is the strength of the beer category? Where is the excitement and interest? Is it with the national conglomerates like Bud, Miller, and Coors? No. All of those mega-companies are watered-down pablum. They appeal to the lowest common denominator, and serious beer drinkers don’t even think about them. (Bud, Miller, and Coors represent the mega-banks in this analogy).

The REAL excitement and interest is in the microbrews. At the microbrews, people who are PASSIONATE about beer lovingly hand-craft small batches of beer, insuring quality is high. And the VARIETY of flavors is wonderful… stouts, porters, ales, wheats, and the list goes on and on. And they are LOCAL. It is this LOCAL DIVERSITY that makes beer, as a category, exciting and vibrant… have you visited a microbrewery lately? They are nearly always very interesting, with interesting people working at them. Try Magic Hat in Burlington, VT, or Utah Beers, makers of interesting flavors like Polygamy Porter. (That name is an inside joke in regards to mormonism… you won’t catch a mormon drinking that beer, but the other 50% of Utah LOVES it.)

Are microbreweries successful as businesses? You better believe it. It seems that there are a great many microbreweries that are continually growing, offering even more varieties and seasonal brews. They seem to be flourishing all over the country. And the original “microbrew”, Massachusetts’ own Sam Adams is now so large it’s not even a microbrewery anymore.

So raise a pint of your favorite local, handcrafted beer with me as I propose a toast– to the wonderful men and women, the professionals and volunteers all across the United States, Canada, and the rest of the world, who are tirelessly committed to making their credit unions great every day — professionals who are helping people of all shapes, sizes, stripes, backgrounds, and situations, improve their financial lives every day.

But that’s just what I think. I’d love to hear what you think.