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One marketer’s unprecedented disaster is another marketer’s platinum-plated opportunity.
For proof, just look at today’s financial services industry.
While banks large and small are riding the nausea-inducing waves of the financial tsunami, some credit unions are seizing the opportunity to push the message that they weren’t involved. They didn’t make subprime loans. They didn’t invest in exotic derivatives. And they don’t need to be rescued by federal bailouts or competitors’ buyouts.
But it’s not just the credit unions that are telling their stories in print, broadcast and online campaigns. Even some banks that were swept up in the mess are creating advertising campaigns that focus on their strengths and ignore the risky loans they’ve written off in recent months.
Whatever story they have to tell, financial institutions are trying to get their messages out to reassure existing customers. But they also want to make a play for consumers who have lost faith in their banks and are looking to switch. The worst thing consumers could do, the financial experts say, is to stuff their cash under their mattresses.
Jeff Meyer thinks his credit union can tell a compelling story.
The chief executive of Fort Wayne-based Three Rivers Federal Credit Union posted on the credit union’s Web site a letter that outlines its principles and operating procedures.
“I think what a lot of financial institutions are saying is: We’re safe and sound,” he said.
But the Web site goes beyond Meyer’s assurance that Three Rivers can meet its financial obligations. It provides consumers an independent summary of the credit union’s soundness by the National Credit Union Administration, the independent federal agency that charters and supervises federal credit unions.
Three Rivers’ Web site also gives a link to Bankrate.com, an independent online source of financial rate information that gave the credit union a four-star rating for safety and soundness on a five-star scale.
“We want to be very transparent throughout,” Meyer said. “We don’t have anything to hide.”
The credit union executive backs up his assertion by answering the public’s questions by phone and e-mail.
“Ask away. We’d be more than happy to provide you with information,” he said.
Mark Wolff said some credit unions are increasing their marketing efforts now to educate consumers about the differences between credit unions and banks.
The spokesman for the Credit Union National Association, a national trade group based in Washington, said credit unions are typically managed “very conservatively.” That’s the core of their message.
“They don’t have the same incentive to take big risks” to please outside investors, Wolff said.
Some of the association’s members have reported an increase in deposits in the aftermath of the financial crisis, Wolff said. CUNA represents more than 90 percent of the roughly 8,300 credit unions in the U.S. and some state credit union associations, including the Indiana Credit Union League. About 1 in 3 Hoosiers are credit union members, according to the league.
Membership in Indiana credit unions has increased 3 percent – to 2.2 million members – from Dec. 31, 2003 to June 30. In that same 4 1/2 -year period, Indiana credit unions’ combined assets have jumped 24 percent to almost $17.1 billion.
One of credit unions’ traditional marketing hurdles has been the fact that not just anyone can join any credit union, Wolff said. A member must be part of a defined group. The definitions include all employees of a specific company, all students and employees of a particular school, all members of an association, such as a church or other group. But a growing number of credit union charters allow them to accept as members people who live, work, attend classes, worship or volunteer in a particular geographical area, such as a county.
Three Rivers’ charter allows it to accept members who meet the above criteria in Adams, Allen, DeKalb, Huntington, Noble, Wells or Whitley counties. You can also join if you live in certain parts of Van Wert County in Ohio or through an employer or relatives in St. Marys, Ohio.
Wolff noted the growth in community-charted credit unions. In 2000, about 10 percent of CUNA’s members had charters for geographical areas. Now, about 25 percent of the group’s affiliated credit unions can accept members because of where they live or work.
Most Americans can find a credit union they’re eligible to join, Wolff said.
But certainly not everyone wants to abandon banks.
Nancy Wright, chief executive of Ferguson Advertising in Fort Wayne, said something really bad usually has to happen before someone withdraws all his money and deposits it somewhere else. That bad thing might be poor customer service or a dispute over fees.
“In general, it’s extremely difficult to get people to change banks. They think it’s really complicated. It’s not,” she said. “It’s like trying to get them to change doctors.”
Todd Morgano is banking on consumers’ reluctance to uproot their money – at least as far as his employer’s customers are concerned.
The spokesman for Cleveland-based National City Corp. has been in the position of marketing a bank that was long-rumored to be a takeover target because of the depth of its involvement in the subprime mortgage meltdown.
On Oct. 24, Pittsburgh-based PNC Financial Services Group announced plans to buy National City for $5.2 billion. National City, which bought out Fort Wayne National Corp. in 1998, operates 13 branch banks in the Fort Wayne area, where it employs about 400.
But before that deal was struck, Morgano worked on an advertising campaign that would shine a light on what the bank – and its customers – believes it does best. Officials contacted 5,000 to 6,000 National City customers to ask why they’ve remained loyal to the bank.
A pattern emerged, showing that customers were most loyal when the bank had met a special need or helped them deal with a challenge or problem.
“One of the things we thought was missing (in previous marketing campaigns) was talk about the personal relationship between customers and their bank,” Morgano said.
The bank unveiled its Real Stories advertising campaign in early October, about six months after officials starting doing research. National City launched the campaign by running newspaper ads that pointed people to the bank’s Web site.
Once there, consumers can watch videos in which customers describe how National City employees went above and beyond to help them meet unusual challenges, such as quickly getting money to a daughter studying in Italy. The four stories are available at realstories.nationalcity.com.
Morgano doesn’t know what will happen to the marketing campaign in the future as National City is acquired by PNC. It has been “a very challenging time” for players throughout the banking industry, he said.
“Through all that, we had a very loyal customer base,” he said. “And that’s what led to the Web site and the marketing campaign. Our customers rallied behind us, and it was very heartening.”
Although ailing banks and credit unions might find this a good time to promote themselves, not all financial institutions should seek the spotlight in the midst of this crisis, a local expert said.
Wright, of Ferguson Advertising, said this might not be the best time for most banks to launch new advertising campaigns, which can increase a bank’s visibility at a time when some consumers are questioning banks’ previous lending decisions.
“If you change your marketing message hugely, (if) you change your image hugely,” Wright said, “you’re calling attention to yourself.”
sslater@jg.net
