Credit unions can be a great alternative to banks for people who want a change. Credit unions don’t advertise a lot, so they may be the best kept secret for banking. They do not rely on large profits, so they don’t spend a lot of money on advertising. Instead they rely on word of mouth with happy customers recommending them to friends. Credit unions often treat their customers better with fewer charges and better return and interest rates.
How is a Credit Union Different Than a Bank?
As a person grows up and becomes an adult, they become responsible for their own earnings and money. They need a checking account and hopefully a savings account to manage their money. This person may choose a bank that their parents have used or a bank that advertises lots of services and low rates. But as time goes on, this person might become unhappy with how they are being treated by their bank, or by the unadvertised service fees they are being charged. They may want an alternative to a traditional bank.
An older person may have had their money in the same bank for years and become dissatisfied with the new service fees and bank policies. Because, banks have changed how they treat customers and the fees they charge their customers. People around America are complaining about the new policies and fees their banks have adopted. But, where can they go to keep their money safe and convenient to manage?
The credit union is a good alternative to traditional banking operations. Credit unions have checking accounts, savings accounts, and they give loans and lines of credit like banks do but with a difference. Credit unions use services such as Prager Creative to get advice and guidance on how to better serve and market to their customers. Credit unions are different from banks because they operate on a different model.
Credit unions are nonprofit organizations that are owned by their members. A credit union is started as a cooperative with membership open to individuals who have common interests such as a particular industry, belief system, or a community where they live. Because credit unions are set up as nonprofit cooperatives, they are often exempt from federal taxes. There are no shareholders demanding the institution make big profits.
The credit union is owned by its members rather than stock holders or large companies so it can offer its members better terms for their financial products. Credit unions offer their members lower rates on loans, charge less or lower fees, and pay better rates on savings products. Finally, credit unions are not insured by the FDIC or Federal Deposit Insurance Corpooration. Instead, they are insured by the National Credit Union Administration or the NCUA.
Why Do People Choose Credit Unions?
People who are fed up with banks can choose to do business with their local credit union which will put them as members first. Customers are part owners, even if it is a small part, and they can expect to be treated better with more personal attention. Credit unions have reputations for better customer service and happier members.
Credit unions often provide their members with seminars or other educational tools to learn about financial topics such as managing credit cards, buying a home, preventing identity or online theft, estate planning, or planning for retirement. And, credit unions help their members with financial benefits over using banks. These benefits come when profit the credit union makes is divided among the members with interest on deposit accounts or by periodic dividend checks.
Credit unions are easier to join and continue to be members of because they require no large minimum balance, lower overdraft charges, non-sufficient fund charges, or ATM fees. If the members take out a loan, they may pay lower interest rates.
7 Marketing Trends with Credit Unions
Credit unions have become a more and more popular form of banking for Americans. But, they could have more members and better visibility if they advertised more. Credit unions spend much less on marketing strategies than traditional banks. Credit unions concentrate instead on meeting their membership’s needs and wants and to achieve customer satisfaction and positive experiences. Modern credit unions are taking steps to better market their services and outreach. There are 7 major trends in credit union marketing.
- Attracting young members is an important way for credit unions to grow. To do this, credit unions are investing in the digital tools young members like to use such as digital bill-pay, aps, digital help with services, and online banking services. Many credit unions have been slow to keep up with the latest technology and are making more efforts now.
- Making In-Branch visits more valuable for customers with features such as self-service kiosks that reduce wait times and taking steps to generally reduce wait periods for customers visiting the credit union in person. Notary services and other added personalized services may also increase customer visits to the credit union. The Pandemic has made this marketing tool more difficult.
- Keeping customers more satisfied is another credit union priority. Credit unions must make more efforts to embrace the customer service tools that modern members demand including digital tools, an easier flow of needed information, and more account security efforts.
- Making more use of digital financial tools since up to 72% of bank contacts are online. Credit unions are playing catch-up with installing effective financial tools and digital experience platform models. Younger customers demand banking online platforms they can access 24 hours a day through smart phones and other electronic equipment. They demand account security and the ability to change their credit union financial services and make financial decisions through an ap.
- 24/7 customer service availability and Chatbots is a new service that is in demand. The credit union must design, test, and install simple but effective chatbot aps. The customer must be aware that they are talking to a bot and be given a collection of questions and options to choose from to get the information they need. This chat bot must be able to safely and securely offer personal information, link to accounts, and start processes the customers ask for.
- Increasing community outreach and using content marketing are important to increase the bonds with the communities they are located in or near. This can be accomplished with programs such as financial literacy programs for young people in local schools, offering classes or workshops to the community on digital and financial security. Offering workshops to older people on how to use online banking safely and effectively can also draw in customers.
Local credit unions should also establish community outreach committees to find local causes and programs for the credit union to sponsor or give financial help to. This could be in the form of grants, scholarships, or small financial contributions. Having a content marketing program that lets community members know what services the credit union provides is also very important. Community members and potential customers need to know how the credit union differs from local banks.
- Building better customer experiences is important. Credit unions need loyal, satisfied customers who will not leave the financial organization for another one. Customers need to be given real, satisfying personal experiences with the credit union that they may not get from a traditional bank. Make a big deal about distributing credit union profits when that happens. Communicate with members about low loan rates or new services the credit union is introducing. One simple but effective tool is to send birthday cards to customers or a little perk on each anniversary of joining the credit union. Perhaps initiate a small reward program for members adding to their savings accounts.
Credit Union Executives should consider hiring marketing help to advise them on growing their institutions effectively. Companies such as Prager Creative have experience in marketing financial institutions to the public that can be very helpful. Adding digital services for customers should also be handled by professional designers who have experience launching digital, direct mail, and mobile marketing campaigns.
Each credit union has its own strengths that come from their community and members that should be emphasized and built upon. Building a stronger brand awareness is not the main function of credit union leaders, their job is to run the credit union and best serve its members. So, hiring marketing professionals makes sense for efficiency and marketing success.
Each credit union leadership should concentrate on making their branch the best financial service location and experience for each of their members. Keeping satisfied members for the long term is even more important than getting a steady stream of new customers. There are some ways credit unions can increase member involvement and loyalty including taking member surveys about credit union services and publishing the results with actions the credit union will take.
Create a system of accepting member’s constructive criticisms or improvement ideas and then discussing the input at staff meetings. Make efforts to have knowledgeable people available to answer members questions about subjects such as getting in position to buy a home or a car, improving credit ratings, what type and amount of loan they would qualify for, how to increase their account security, and more.
During this pandemic, the local credit union can help its members by using targeted communication about the coronavirus and safety measures to take personally and with financial information for surviving this financial downturn fueled by coronavirus safety closures and business limitations. Helping members hurt by this unusual situation get information on what help they can get is important.
