Credit unions have a solid following but what happens when customers just fade away?
When you think your consumer brand is well-known and enjoys incredible loyalty and that you can’t possibly lose your core customers, be wary. No matter how loyal customers your customers are, they can desert you, especially if they, well, age and die off.
Credit unions, some of the oldest financial institutions in the U.S., started in the 20th century as the working man and woman’s alternative to banks. These venerable institutions often provided all the key banking services you needed when you worked for Pacific Bell, the U.S. Navy or Chevron. Credit unions catered to you with personal service, because they knew the working and career world you came from. And they had one big advantage over banks — the members owned them. They now have a new advantage: with new banking laws credit union are not restricted to taking on new members the organizations with which they are affiliated; anyone can join.
Now credit unions face a dilemma: most people under the age of 35 do not know what a credit union is and yet this core group of young professionals massively distrusts “the man,” dislikes the government, hates external control and, did I mention, hates banks and deals with them only because they have to—a perfect market opportunity for credit unions where you own the institution. It’s yours!
According to research data from the Credit Union National Association, 61 percent of non-credit-union members between the ages of 18 and 34 are eligible to join a credit union, but they have not chosen to do so.
So what are they doing? By attempting to retain their current members and fumbling with modern online banking technologies, credit unions are lost in the 1970’s with their marketing approach and they may shrink to nothing if they do not go after younger customers. They are so focused on customer retention and trying to be like a bank with new online and mobile services (which they should) they completely forgot their core differentiator – socialism, that is self-ownership by the members. To a younger crowd focusing on buying local, group buying and getting the best deal for their community credit unions are perfect.
When a business becomes so focused on one customer, and that customer represents what they think is their “always loyal following” they will inevitably be bypassed. For years Mercedes was at risk of this. They have a very high level of loyalty, as does BMW, but if you do not clearly focus on a younger demographic your car just became “grandpa’s old Mercedes.” Over the last three years, Mercedes has focused on engaging younger drivers and is now building its following among a younger aged demographic.
So follow their example, credit unions! Wake up and look for the younger customers or become irrelevant to a loyal customer market that will just disappear over time.