Feb 28, 2008
While doing some research last week I started thinking about the credit union difference and the Generation Y audience that credit unions are striving to convert to member-owners. I am a member of this tech-savvy generation – I’m 22 – and I can honestly say that before I started working with JayRay I was pretty fuzzy on the difference between credit unions and banks.
Keep in mind that I am a member of two different credit unions and also have some accounts with a bank that, as Mike pointed out in his recent post, my parents started for me when I was about 12.
There are two possibilities here:
- I’m one in a million and most people my age know the difference between credit unions and banks.
- There is a disconnect and most people in the under-25 crowd have no idea that there even is a difference, let alone the specifics of it.
So I went directly to the source and surveyed two of my friends. The result was less than optimal. Both friends graduated from college and are very intelligent, well-rounded individuals.
- Melinda, who has worked in real estate for several years, said, “A credit union deals more with cars and houses and purchases where you need to get your credit checked.” She could not name one credit union, but recognized BECU when I provided the name.
- Nicole, who only has accounts with a credit union and has never used a bank, did not know the difference either! Her guess was that credit unions are owned or sponsored by companies and banks are private. She could only name BECU (her own credit union).
This result has me a little worried. In my time working with credit unions I have become a true convert. The difference is awesome – but the target audience doesn’t know or understand how beneficial it would be for them to make the switch. Or even how to take advantage of the credit union they are already a member of.
I plan to do some more research among my peers and educate them along the way, but what can the credit unions do to get the attention of this generation? Common Wealth’s Young and Free account has the right idea. What are you doing to reach this group? Have you had any success?
Feb 28, 2008 at 12:15 pm
I am one of those rare people I guess that do know the difference (or at least one of the main differences) between the banks and credit unions. Credit unions are “member owned.” But what does that exactly mean…or better yet…translate too. Your friend was somewhat correct in they deal with “loans” and alot of that is word of mouth referrals that its better to go get your loan through a credit union because you get a better rate. But the education on why you get the better rate is a point that is always overlooked…or not taught. For the most part, marketing of credit unions has not focused on credit union benefits. Other than the occasional “you now can be a member” tagline… there are very few recollections I have of any credit union marketing outreach to the public. I think a focus on educating all the benefits of the credit union experience would help the credit unions immensly…and since the credit unions are member owned…it will help the people that are, or want to be members.
Feb 28, 2008 at 5:07 pm
To really know and understand a credit union is to love a credit union. I once had an idea for a campaign called, “Why are credit union people so crazy?” It’s true, even if you’re not a member you probably know someone who is, and typically that person loves her credit union. Look at Jamie. But that’s getting off topic. I’m still convinced the way to the kids is through their parents. Financial education is not part of school curriculum, and kids certainly aren’t talking about it amongst themselves, so what else is there? Parents.
Feb 29, 2008 at 9:22 am
Great thoughts! Mike, I agree that parents are a key link to financial education in today’s youth, but perhaps the easier way to reach the kids is by incorporating these important life lessons into the school curriculum. This has already started through programs like Junior Achievement and Credit University, but is this enough? To really reach all kids and prepare them for the future, is it necessary to make financial literacy a required course in our public schools?
Feb 29, 2008 at 9:43 am
Melina,
Sounds like you and Mike should join the financial literacy coalition Jump$tart! Stacy Augustine from the Washington Credit Union League got me involved a few years ago.
Check into joining http://www.wajumpstart.org and the national is http://www.jumpstart.org.
Mar 11, 2008 at 4:03 am
I think you’ve nailed the most basic problem in credit unions today, there is no difference to the end user.
Mar 11, 2008 at 3:35 pm
CU Skeptic,
Haven’t you heard?
Credit unions saved consumers $11 billion last year.
That’s a pretty big difference to the end user and to the communities where those people reinvested that money. That’s why people volunteer for credit unions. The issue here is just bridging the gap to help the next generation understand it.
Mar 14, 2008 at 5:41 pm
[...] this week, I posted a comment on the JayRay blog. (The article itself was titled “There’s a Difference?”, how could I not [...]
Mar 16, 2008 at 2:53 pm
[I should initially add the disclaimer that I am from Australia, although after reading through many posts on different CU blogs (I'm a first timer here), the themes I'm mentioning should be familiar to you]
I think that in the end, the difference between CU’s and banks is becoming smaller and smaller. Sure, we trumpet ‘good service’, ‘better rates’, ‘lower fees’, and ‘more personal banking’… etc etc
But honestly, quite honestly, most CU’s are not sticking to the rhetoric. My CU included. Fees are getting more expensive. Internal Beuracracy gets more political. Execs are further and further away from the frontline.
If we want people to notice and be aware of a difference between credit unions and banks, we have to create some tangible and meaningful difference AS WELL AS marketing it well.