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Tag: vsc

Spreading Savings Stories At Your Credit Union

Originally published on CUInsight.com

Why would someone want to join your credit union? Or keep their relationship over switching to a seamless app-based fintech (or snazzy big bank) platform?

It’s easy to talk about the mission, how members are the owners, and that the institution is not-for-profit. But these tell people nothing useful, nor do they give them a tangible reason to bank there. People think they’re making decisions rationally, but they’re really acting on emotion.

Between my business partner (who’s also my dad) and myself, we’ve dedicated over half a century to providing for credit unions. I don’t share that for accolades (applaud if you’d like), just so you can understand the perspective from which I approach this topic.

Most credit union marketing goes in one of two directions:

  1. Explains what the credit union is, making the assumption this is sufficient to convince someone to want to bank there
  2. Shares what your institution offers, and sometimes even how you do so

The first has no direct bearing on a person’s financial life (yes, I get that it’s what enables lower fees and whatnot, but that’s all abstract and intangible to your target audience). The second is what marketers call “features and benefits”.

There’s no emotional connection to either. Both assume a rational decision-making process, which we know now doesn’t exist.

“Hold up, Joe! We’re a credit union, and our mission is always about the why. We strive to help people create stronger financial lives.” I hear you, truly. But read that again. Where is the emotion focused? It’s not to the individual you’re trying to attract, but rather a “big picture” that’s hard to pin down.

Dollars and Sense

Vegetable Pizza
Well, great. Now I’m hungry.

Think of fast food and restaurant commercials. Do they spend their limited time talking about the mission of affordably satiating everyone’s hunger? No, they feature macro shots of their food items, make you hungry, and probably end with a “by the way, check out all you get for just this much money!”.

Bonus points for implying you’ll have a better social life if you choose to eat there.

So how can your credit union use this successful strategy? Focus on your members’ stories! (Chime does this ridiculously well with buyer personas.)

Our partnership with protection product providers as well as being credit union members ourselves gives us access to some compelling stories…and by stories, I mean, “big dollar numbers that will catch people’s attention”. 

Regularly, I learn about paid GAP claims of $8k, $10k, even $14,000, and more! For the average American, that kind of avoided out-of-pocket expense can be life-changing. Surely worth including in marketing efforts, don’t you think?

Our own vehicle enjoys a bit too much vacation time in the service center. Using a VSC policy purchased at a local credit union, paid warranty claims have exceeded $6000 so far. Yet when we reach out to the institution to encourage promoting their impact, it’s been radio silence.

Talking about your mission is one thing. Showing examples of how that mission of financial empowerment saves members thousands (people like you, dear viewer!) connects emotionally. Plus, choosing to save money sounds like pretty rational decision-making to me.

Make Your Credit Union An Easy Choice

Path Choice
Help more members find the rainbow.

Insurance commercials focus on the ease of filing claims, speed of payment, and how their prices are better than competitors. That’s fine when you already know their products; usually it’s homeowners insurance (basically impossible to get here in Florida) and auto insurance.

Do your members (and prospective ones) even know the insurance products you offer?

And how often is their first and last response to them, “I decline”, on the loan documents?

Instead of talking about how “credit unions are different”, share the stories that will catch people’s attention:

  • How Tasha avoided an out-of-pocket $8,400 expense after her car was totaled (with CU’s GAP)
  • When Steve could get his $3,500 car repair completed for only the $150 deductible (with CU’s VSC)
  • That time when Andy unexpectedly lost his job, but had his $545 monthly loan payment waived for 4 months, when he found another position, relieving the financial stress (with CU’s payment protection)

If your marketing simply said, “our credit union offers GAP, Payment Protection, and VSC, and they’re cheaper than the dealer”, would it generate an emotional connection?

Use your data. Surface the real stories. If you can get the members to tell them, even better.

Sure beats promoting that members get a vote in your operations.

Unseen Credit Union Competition: “Respond Immediately!”

Credit unions aren’t just “cheaper banks”, nor are they “banks owned by the people”.  They’re unique community institutions.  At least, I still believe this.  Do you?

This article dives into what happens after a member closes a loan (auto or mortgage) with you. Specifically, we look at the solicitations they receive. And what your role is in helping your member understand it all.

Who’s Your Competition?

It’s tempting to think that your primary competition and challenge comes from the big banks. Sure, they offer similar products and target the same groups of people (ie. your potential membership). Their marketing efforts present them as a community-focused option.  They make it about their customers, not about the money.  I’m no expert, but it definitely sounds like they’re competitors.

It’s true.  They are.  And for many people, you can offer a better option which will save them money.  Yet, besides the exceptional record of Wells Fargo, the national banks don’t engage in “slimy tactics” or attempt to steal customers by just-nearly-but-not-quite misrepresentation.

On the whole, banks (both community and national) want their customer’s business and aim to gain and keep it through honest means.

However, there’s others with a slightly different agenda. This article looks at competition to credit unions besides banks, and how you can use your existing products, member relationships, and educational mission to beat them at their own game.

Loan Closing & What Comes After

Last year, I bought a new car.  Yes, I have a lot of fun when driving.

Shortly after, I began to receive letters in the mail much like this:

Real…ish

Packed in official-appearing envelopes (many had that, “fold each side and tear in order” government style design), with names such as, “Automotive Services Department” or some other bogus, yet “maybe they’re real?” title, they appeared in masse.

They encouraged, no, insisted I follow up immediately regarding my vehicle’s impending warranty expiration.  Never mind it’s a new car, with a 3 year factory warranty included.

I COULD BE AT RISK FINANCIALLY IF I DON’T ACT NOW! Of course, the action to take is to get in touch with whomever runs these shady enterprises (they’re not affiliated with any of your VSC providers, trust me) and make sure my car is protected.  Much protection, indeed.  “Do you cover diagnostic time and taxes?” is a question I would feel obligated to ask if I ever were forced to reach out.

Of course, I wouldn’t. Even the FTC warns people against these potential VSC scams. Yes, some might be real services, but when your credit union offers a tried-and-true solution, why risk it, while also spending more?

Why mention these letters?  Because every time your member finances with you and every time they don’t, they’re getting dozens of mail pieces like this.  And this is what they ask themselves:

“Do I know for certain it has nothing to do with my credit union?  Is it a scam?  Can I get a better deal from here or my dealer?  Is it even something I need?  What’s the harm in a call?”

It’s unlikely your members will ever ask you any of these questions.  But you can bet they’re asking someone, whether it be Google, that helpful voice in their head, or a spouse or friend.  You can be there for your members in more ways than you think.  And this is what sets you apart.

A Loan Closing Tip

Imagine if at every loan closing (that includes mortgages, because I get things like this for my house all the time), you had a short conversation about potential fraud and things to beware.

“Ok, Jenna, we’re just about done.  Are you excited?  Because I am!  Since we’re here for you across your entire financial life, we want to make sure you’re empowered to spot what’s real and what isn’t. Here are some examples of letters you’re going to get in the mail, maybe even in your Inbox.

They’re not from us.

All of our communications will always include your member number and our logo. These make themselves look really official, and often have scary wording. Crazy, right?

Please look out for these and make sure any future interaction about your financing is with myself or someone else here at ABC CU.  I know it may seem silly, but we used to see many members fall for similar scams, and we want to help ensure you’re not one of them!

And as far as vehicle service contracts go, we’d be happy to have that discussion to see if it makes sense for you!  Does this make sense?”

Has anyone ever said that to you?  What if they did?  How would that make you feel?  A bit more trusting of your credit union, right?  That they have your back, and want to go above and beyond to keep you safe and secure?  That’s a credit union I want to do business with and share with my friends and family.

In a future post, we’re going to address GAP and VSC coverage (the legitimate ones) and how they differ (or don’t) between credit union, dealer, and insurance provider.  Later on, we’ll educate each other and members on buy-here-pay-here lenders.

It’s About Your Credit Union Mission

Remember, your mission likely includes something about ensuring your members live a financially successful life.  Here’s one easy thing you can implement which may make a big difference for your members.

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