Considerations of a National Branding Effort

Executive Summary

This essay suggests that while a strong national brand for credit unions could be invaluable - it would be almost impossible to successfully execute because of gaps in leadership and vision. Brand implies a promise, and there is simply no single voice to be able to make and sustain a meaningful promise to America. This essay further considers the effect of credit union consolidation and the imbalance between the strategic goals of growing and remaining competitive - and developing innovative service offerings for young people and households of modest means.

At the heart of the essay is a challenge for credit union opinion leaders to galvanize around a bold and responsive vision for the future that keeps cooperative values front and center - while remaining vital and relevant to American citizens. It is a call to blow past the single-issue-muckrakers and instead open up to new ideas, partners, and people who can use the profound resources of the credit union industry to improve lives and support vital communities.

Should credit unions develop and promote a national brand?

Should credit unions develop and promote a national brand? Absolutely, unequivocally, yes. Will they? No, not a chance; not without a significant sea change in the leadership vision of the movement.

This essay calls out the connection between industry leadership and the potential of a national brand for credit unions. A national brand constitutes a promise to people about the relevance of credit unions in their lives. It must be a consistent and enduring promise reinforced by real people, with real stories, who bring momentum to the brand with stories of the promise fulfilled. The gist of this argument is that a national brand for credit unions is a promise that must be made by the leadership of the movement. And right now, our leadership is not ready to make a coherent and compelling promise. This is not because they are bad people - or even short sighted people; it is because there is a wide gulf between the value of what credit unions were, what credit unions are, and what credit unions need to be.

Who is Leading What?

Let’s begin with two simple questions. First, are we a movement or an industry? Second, who are our leaders? For many people the distinction between the movement and the industry is passe. For others, the distinction is significant; to be a part of a movement is to engage deep social values and to work for a cause. To be a part of an industry is to accept the wide range of business, market driven responsibilities and opportunities. Chances are, if we forced the issue, you could make two lists of people who you see as “movement” people and people you see as “industry” people. The distinction is important because it speaks to a fundamental orientation for leadership in credit unions. Certainly the tension between these two poles is present in the historical credit union mantra, “Not for charity, not for profit, but for service.” Many credit union CEO’s and board members describe their jobs as a balancing act between the tensions of service as a “cause” and service as a business; service and risk management, service and value, service and competition, service and profit. Unfortunately, in the name of balance, our leadership often finds itself stuck in a frustrating paradox of (apparently) mutually exclusive goals concerning what it means to do the right thing as a business - and act as an agent for positive social change.

And who are our leaders? Are they our CEO’s, our volunteer board members? Is it CUNA or CUES? What about our state leagues and affiliates? What about key vendors like CUNA Mutual or Symitar, corporate credit unions, consultants and subject matter experts? What about organizations like the Filene Research Institute or the National Credit Union Foundation? And let’s not forget to salute our regulators. The cop out answer is that all of these institutions combine to constitute credit union leadership. One thing is for certain, the leaders in each of these organizations are deeply aware of the need to “bring everyone along slowly”, “work together with our partners”, “create buy in”, and “not get too far out in front”. There are so many legacy issues and points of view that need to be managed. So, we sort of know who our leaders are and they approach change carefully and slowly.

I know some CEO’s who report that they have “extremely low expectations” with respect to the issue of thought leadership from their trade association partners. One CEO said, “No doubt the people at CUNA and CUES have their hands full, and that is fine, but the pace of change and competition in my market demands more customized and aggressive strategies. Whether we like or not, we see ourselves as alone out in front. We can’t wait for everyone else, we need to grow now.” A buzz running through the hallways at many volunteer conferences concerns the idea that the future of credit unions is in the hands of the big players. If we were to create an “influence map” for credit unions nationally we would see that CU leadership is increasingly more factionalized, less homogenous, and less democratic. Leaders become leaders through regional success and attrition. So we work in an industry with goals that are often at odds with one another, and our leadership can be cautious in the face of intense competition and big changes in the world of consumer financial services. In an environment like this it is no wonder that the idea of producing a national brand campaign seems almost incomprehensible. Think of the dozens of committees and meetings and parity-plays that would be needed to even float ideas - much less execute an effective national brand campaign. The result of such an ill-footed effort would be watered down pabulum - so weak that people would immediately question its potential and choose not to support the brand. So it would stumble and fall on the roadside of the new consumer super highway that flattens any brand that is not robust and extremely well supported.

Another reason a national brand is not forthcoming is that credit unions have (to this point) benefited from operating below the radar. According to one of my clients, “Big marketing is not in our DNA”. Historically credit unions simply did not have the need to think about marketing in mass media terms - they were our members and we typically shared their workplace. We have all heard the positioning that “Our credit union is one of the best kept secrets in town”. Still others debate at length how they will handle the rush of people desperately trying join when the community charter becomes real, “We have always been kind of an exclusive club in our town because you had to work at (fill in the blank) to join”.

Now, as more and more credit unions open their fields of membership, marketing challenges are becoming all too real. The complexity, creativity, human resources, partners, and expense associated with “real world-big time” marketing is incredibly daunting. The biggest rub is that marketing works when it is sustained over time - and ROI rarely plays out in any single campaign effort. Nobody says you have to just flush money away, but applying rigorous ROI standards to marketing dollars usually only produce charts and graphs displaying bad science and it challenges the sustainability of any effort. It is kind of like dieting; if you weigh yourself after your jog - you may be disappointed in the results. The benefit of the jogging and the diet only shows up over time with consistent application. As I mentioned above, we are skeptical and cautious - and our appetite for instant results is sure to kill just about any effort. For a national brand to work it would require a substantial funding base that could be more or less guaranteed over a period of years. And I am certain that could not happen because there will always be people who demand a fast answer to the “what’s in it for me” question in the form of ROI or some other measurable performance lift. For a national brand to work, we would have to think of the investment as a “cost of doing business”. We do not have a history of patience and sustained effort when it comes to these kinds of things. Bring on a banker attack or a piece of pending legislation and we will rally the troops with the best of them. But attend to a year after year deliberate branding effort? Not very likely.

The Wishbone

Another reason we can’t get our act together is that the market place is creating a “wishbone” moment in the board rooms of credit unions. One side represents products for our traditional members; loans and deposits. The other side represents products for “underserved” or “modest means” households. Many boards struggle with managing their credit unions and simultaneously trying to serve the historical membership base and attracting members who are - by definition - high risk consumers. Perhaps they are young, or poor, or immigrants. Their needs and their risk profiles don’t conform with the service and product structures you have in place. To reach out to these people would require a substantial change in the way we think and the way we do business - and that change simply does not look very appealing. One board member said, “It makes me sick to think of running a check cashing service or a pay day lending service

OK. Fine. But the check cashers and payday lenders proliferate. Data from the NCUF confirms that even CU employees are using payday lenders - and paying rates that amount to usury. Our membership base continues to age. Our arms are just opening to the emerging ethnic communities working to get a foothold in our economy. Because we see these products and services as mutually exclusive, we resign ourselves to being what we have been and as such we risk becoming increasingly irrelevant as the world changes around us. This is a challenge of applying real leadership in a time of transition. Again, give us a good old fashioned crisis and credit unions will step up in an instant and show their true, heroic colors. But transitions are risky. We can’t be sure about the future. And we want our leaders to be sure. We are trading boldness for certainty and safety.

A national brand would have to be bold. It would have to have a compelling value message that challenges people and elevates the values of financial responsibility - without regards to means or wealth. It would need to show up across a wide range of media including network television but also all over the internet. It would need to weave itself in the new media of social networking. It would need to change and flex with the issues of the day. It would need to invite new people to the community while reinforcing the core values that got us started in the first place.

For our current leadership, a national brand is just too big of an idea to deal with. And we are not able to approach these efforts iteratively. We are not able to learn as we go. We are not able to compromise our individual idiosyncrasies for a bolder vision that may be different from the way we see ourselves. Our resource constraints and our collective attention span are simply too limited to be able to steadily, and methodically, build a strong brand.

A Smelly Red Herring

No doubt there are those who will argue that a national brand would help credit unions distinguish themselves with respect to continued industry attacks from bankers. After all, if more Americans value their credit unions, they are more apt to fight to protect their credit unions. To approach a national credit union brand with this - even in the back of our minds - is folly. To hitch the brand wagon to the political wagon is to tie a potentially powerful and noble message to the mean spirited poo-slinging that often constitutes political debate about America’s financial institutions. I don’t mean to minimize the importance of banking and credit union legislation - but I am absolutely clear that consumers expect their leaders to work this out - with their best interest in mind - without dragging them into the fight. Lobby, haggle, and when needed, mobilize; but don’t think that a national brand is ever going to be a support element for political action. Indeed, it may well be that flying above the radar causes more political fuss.

At a recent planning session a board member approached me during a break and said, “You know this plan will probably end up to be crap anyway!” He was a cantankerous gentleman anyway, and I assumed he was giving me abuse about the direction the meeting was going. Then he continued, “Everything I read suggests that we - the financial service industry - is in for a major shake-up. Maybe it will be Wal-Mart, maybe it will be some online service, who knows - but the fact is that things can change in an instant. We can plan all we want but no matter what we have to be nimble.” There is no doubt that there are dozens of disruptive technologies already in place in the market; and slowly but surely people are applying those technologies. The character of our national brand would somehow have to account for the paradoxical values of “highly stable and trustworthy” and “dynamic” and “change ready.” Later in the afternoon the same board member said to me, “You are of course aware that there are two communities at work here: one is a financial service industry and the other is a cooperative. It seems like when we pay attention to one we lose sight of the other!” More good wisdom.

Tick, Tick, Tick!

And as we wait and debate, the world changes. I am reminded of a John Mayer song, “We are waiting, waiting for the world to change. It’s not that we don’t care, it’s that we know that the fight ain’t fair so we keep waiting!waiting for the world to change. I agree with all the potential values of a national brand - to the point of saying that such a brand would be an essential characteristic of our long term future. But, after doing a gut check, we do not have the precedent, the capacity, or the commitment to develop and sustain a compelling promise.

Maybe, in a few years, we will find the right moment - the right chemistry - for a national credit union brand. Perhaps we will have clarity from the voices of our leaders, or perhaps someone will develop a great idea that we all rally around and say “Eureka! That is it!” Maybe a brand will form like a mirage gaining more and more substance as we move closer to it. Maybe the consolidation in the industry will slow down (it seems like it will have to) and we can have a truly national dialogue that will re-create the mission of credit unions for the next 25 generations. But for now, the best thing you can do is educate your neighbor. Educate the businesses in your community. Be a good steward of your communities. Try to do the right thing - first. Do what you can to conserve energy, work for peace, help our aging communities, or build a school. But let’s not get hung up on this debate.