Light beer and credit unions

For the most part, all light beers taste the same.  And, in seeing their advertisements, all focus on the “taste” and low calories.  None tap into the emotional connection they have with consumers.  They all try to cater to a vast audience, as evidenced in their commercials featuring men and women of various ages. 

In my opinion, that is similar to credit unions, and one of the reasons why credit unions are still growing marginally – we’re all trying to be the same!  In reading a survey by the Vivaldi Partners on social currency that compared brands of beer, I saw a synergy between strong loyalty and niche brands.  To expound upon this even further, I think it is safe to say that polarizing products – ones people either love or hate – are the brands cultivating the most loyalty among its consumers and experiencing the most growth. 

The Yuenglings and the Sam Adams’ are the ones with the strongest brand loyalty.  To relate this back to credit unions, the ones with the strongest definition of who they serve are the ones experiencing the most success across the board: loan growth, deposit growth, member growth, and profitability.  Those credit unions have clearly defined that they best serve a particular group of people, and they never stray away from that model.  

In an effort to survive the post-90’s membership plunge, credit unions tried to be everything to everyone.  “We serve anyone in the area.”  Yes, that is technically true.  You can serve everyone in that area.  But – do you really want to?  Or do you want to serve a specific group of people better than any other financial institution?  You can serve the whole moderately well, or do a fantastic job serving niche markets. 

The choice: you can have a smaller group of people who love you and will tell anyone and everyone about how great you are, or you can have a group of less-loyal members who don’t see any difference between you and the bank down the street.  Yuengling, anyone?

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18 thoughts on “Light beer and credit unions

  1. Love the comparison between beer and credit unions… both a passion of mine. And let’s be clear, I am not a closet drunk but just truly appreciate a good brew. I love local beers and credit unions should take a page from their play book like you said. In Texas, Shiner is huge and is invested and proud of their heritage and Texas roots.

  2. Amanda,

    You are spot on! Brands that are winning today are those that are serving a niche. Too many times, credit unions try to be all things to all people. Sometimes credit unions feel they have to serve EVERYONE. No, they don’t. Credit unions that pick two or three niche groups in their areas can “own” those groups–and thrive.

    • Great point, Mark! I think credit unions struggle because they think they are “turning their backs” on people. But niche markets have proven to be a great strategy for my credit union as I am sure many others. Thanks for visiting my blog!

    • There seems to be something a bit off kilter with conceptualizing it as a credit union “owning” a group, even metaphorically. The goal should be to cultivate a subjective sense of ownership of the credit union by those groups. The power of such consciousness is profound: people don’t care much about the fate of something that sees itself as “owning” them – however, they will defend what they think of as “theirs” tooth and nail. The individuals/groups are the agents, the credit union is their tool for building a better life – to act in an inverse manner is to import a rapacious corporate mindset into the cooperative world.

  3. Amanda, I couldn’t help but go on a mental rabbit trail since I’m an org culture geek. I think this same concept applies to credit unions in regards to our internal cultures. Instead of trying to be all things to all people, we’ve got to nail down who we are and build a distinct and healthy culture around that. And then, instead of hiring anyone with financial services experience and heartbeat, we hire people who are both passionate about our cause and a great cultural fit. We can’t simply try to be just like every other credit union; rather, we’ve got to figure out what makes us uniquely us, and then build and live our cultures. We’ve got to be OK with building an “unculture,” if you will. Organizations that do that (think Zappos, Southwest, etc) differentiate themselves in the marketplace because of it.

    • Matt – I couldn’t agree more with you. I think that the true part of a company’s culture must first come from inside. It takes a lot of work together to determine that culture and get everyone on board. It’s like having your own “personality” as an organization. Just like there can only be one Matt, or one Amanda, there can also only be one Credit Union. Thanks for sharing!

  4. Shamefully, you had me at beer. You can see how “generic” beer brands are trying to break out of the commodity by their commercials…i.e. Bud: “Here We Go” and Miller Lite swimsuit models. BTW I am NOT so shallow to believe that a swarm of bikini clad femme fatale’s will attack me in a beer store if I don’t buy Miller Lite… unless somebody can guarantee the attack 🙂

    Serving a niche does not mean ignoring other segments. Business banks understand that a significant amount of funding from business loans comes from retail deposits. But that doesn’t mean you can’t be known as a specialist in a certain niche, such as serving professional practices ala http://www.liveoakbank.com/ etc. I don’t think we want to be known as “just another bank or cu”, because it may end up as our epitaph.

    ~ Jeff

    • Jeff – your comments made me laugh! I think a lot of credit unions can’t see past being specialized even though it does serve a greater good (citing your business loan example). By the amount of comments I’ve had on this post, maybe people are finally starting to see the light! Thanks for visiting.

  5. Excellent post! I think some of the blame should be focused on community charters and how they have blinded some CUs with the empty promise of more market share. While community charters were critically necessary for some CUs, I think the tidal wave of conversions we’ve seen in the past 10 or so years has been more hurtful for most. It took many a CU’s eyes off what they were good at and who they served best. I’m not saying community charters can’t work or aren’t needed but without at least a semblance of a target member profile it will be difficult for CUs to succeed moving forward.

  6. Credit unions are “lite banks.” At a time when credit unions should be ardently delivering microbrew style brands, all too many are going the route of Miller Lite/Bud Lite — same basic taste, just a little less filling.

    And to push Amanda’s analogy one step further… Just like beer, too much banking will probably make most people puke.

  7. Amanda,

    I love that we both found a way to weave beer and wine into the credit union world.

    Cheers!

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