We heard it first in kindergarten – learn to work together. Later in life, it’s reiterated as “two heads are better than one” and “It takes a village…”
Four local credit unions – Lacamas Community Credit Union, iQ Credit Union, Columbia Credit Union and People’s Community Federal Credit Union – are taking these concepts to heart, pooling their resources to underwrite a major publicity campaign that attempts to let people know credit unions are a viable alternative to large, impersonal banks.
“We can do more together,” said Danette LaChapelle, senior vice president of marketing at iQ. She explained that combining resources enabled economies of scale, reducing the cost of advertising for all the participating credit unions.
This approach to “coopertition,” said Ed Seidenberg, People’s Community Federal Credit Union’s president and CEO, is very much in line with the overall cooperative philosophy of credit unions, which are member-owned, not investor-owned. In fact, LaChapelle said that cooperative advertising efforts aren’t necessarily a new concept in Washington and Oregon, but they’re traditionally concentrated in Seattle, Spokane or Portland.
“We decided to do it on our own,” said LaChapelle, explaining that Southwest Washington credit unions usually got missed by cooperative ad efforts in other markets.
Kathleen Romane, president and CEO of Lacamas Community Credit Union, said the advertising campaign was aimed at capturing a larger market share of depositors, and was more of a branding campaign than a product-specific campaign.
“Instead of trading members between credit unions,” said Romane, “let’s see if we can capture a larger market share as a group.”
Though each of the advertisers is a competitor of the others, LaChapelle said that educating local residents about what credit unions have to offer was far more beneficial than worrying about which credit union a person would pick when they were ready to switch financial institutions.
And switching they are, apparently.
Seidenberg said his credit union has seen an influx of depositors who have become dissatisfied with mega banks. Colleen Boccia, senior vice president of marketing for Columbia Credit Union, said 10,000 new members joined Columbia last year – a number “significantly more than the year before,” according to Boccia. Romane said that Lacamas was “on track” to grow their membership base by 3 to 3.5 percent in 2011.
Part of the reason for people switching from big banks, said Seidenberg, is that larger banks are proposing higher and additional fees for depositors who do not have large balances. In contrast, he said, people are attracted to the general characteristics of credit unions, which Seidenberg said typically have lower fees, higher interest rates and better customer service than large banks.
The cooperative advertising campaign kicked off in late 2010, said Seidenberg, with the credit unions’ message displayed on billboards and on area buses. Romane said there would be another wave of the campaign in the spring, if the credit unions thought the first round had been effective.
One important aspect of the cooperative advertising campaign, said Boccia, is that credit unions have a national-level industry website (www.lovemycreditunion.org) that the billboards and bus ads can direct people to. Boccia said for cooperative advertising to work, the industry website needed to be more than “just a splash page.” She said it should offer concrete, useful information and clear benefits of responding to the advertising (such as merchandise discounts for credit union members).
Boccia was very enthusiastic about other industries in Clark County exploring the benefits of cooperative advertising. She said the Ridgefield Merchants’ Association often purchases newspaper ads at a discounted rate leveraged by a joint pay-in of all association members.
“You get more benefit than negative results,” said LaChapelle. “There’s more value in cooperative advertising than in stealing members from each other.”
Like all financial institutions, Seidenberg said credit unions are seeing a decrease in membership borrowing. Romane said Clark County’s high unemployment rate (over 13 percent for much of 2010) was making it hard for county residents to borrow money.
Instead of borrowing, Seidenberg said members have grown more financially cautious and are saving more. Vehicle loans, he said, have decreased substantially. According to Romane, deposit growth at Lacamas Community Credit Union has been outpacing membership growth, indicating people are migrating to perceived financial safety.
However, Romane said low loan activity combined with more deposits raises a challenge for credit unions.
“How do we redeploy our assets, if not through loans?” she asked.
The answer, she said, has been to continue to explore alternative lending channels to get loans out the door, and to use the credit union’s investment portfolio as a strategic asset.
Other creative advertising ideas
Speaking of assets, Boccia said one of Columbia Credit Union’s best is their employees. If that’s the case for your business, she said you should consider taking your people – not your product – into the community.
Columbiahas had booths at the Home & Garden Idea Fair, at Burgerville restaurants and elsewhere. Boccia said the booths and the people behind them have had a dramatic impact on the credit union’s membership. She said it’s an inexpensive avenue to tell your business’ story, adding, “Any business can do this!”
Another idea Boccia shared is giving back to the community. By donating funds to community organizations (such as Southwest Washington Medical Center or Loaves and Fishes), a business reaps two rewards: First, there is the knowledge that you’ve helped improve the livability of our area. Second, people begin to recognize your business’ name and think of you when they need something you provide.
“Doing good is good for your business,” said Boccia.