Revisiting The Credit Union Difference: Reinforcing Our Value Proposition

Making my application video at Crater Lake National Park seemed like a great idea…until it got windy. It is good to be back in my comfortable office to provide my proposal update. 

My project proposal is progressing nicely. It has been well received within Unitus, and I am looking forward to a meeting with our CEO in early August to share further details.  

Now is a crucial time for Unitus and our industry as a whole. Our ability to differentiate from the competition and clearly convey our value proposition will be key to our success. At Unitus, success is measured by several KPI’s (Key Performance Indicators), but two of the most important are Membership Growth and Service Excellence (Net Promoter Score).My project proposal will help Unitus improve both of these areas. 

Historically, our industry has touted superior service with better rates and fees as our competitive advantage. This argument is not as compelling as it was a decade ago, particularly with millennials, the generation we most need to attract for long-term growth. Millennials are projected to be the largest generation in our population by 2019, are the largest demographic in our labor force (more than a third of the workforce), and are a critical part of any credit union’s long-term growth strategy.

We are currently neither attracting nor retaining them well enough. According to The Financial Brand research, only 20% of young millennials consider a credit union their primary financial institution. We need to change this, and we need to take action now. 

You know the story: Fintech, big banks, and other industries are all shaping our members’ perceptions about what is possible in this new digital world. Consumers are also more willing than ever to parcel out their finances. Venmo, a popular payment app, is a prime example, as their users have a total of between $2B and $18B sitting in their accounts (depending on the report), and they also process upwards of $12B in payments per quarter. A portion of our business has left our industry and we need to do more to protect further displacement. 

I am proposing that Unitus develop and launch a membership rewards account that puts the credit union difference front and center. The credit union difference is our organizational structure - we are a member owned financial cooperative, which allows us to put our members’ best interests into focus in a way that our competitors simply can’t. This message is most effective with rewards that are targeted and tangible. 

My project creates a member rewards account that gives us a place to demystify misconceptions (lack of convenience and technology), promote behaviors and reward participation, and help our members save money. This ownership account will be compelling enough that current members will be more likely to stay and new members will flock to Unitus. Our members will feel like owners and clearly see the benefits of being a part of Unitus.

At Unitus, we will define actions that we would like our members to engage in, the rewards they will receive upon completion, and will do so in a manner that makes sense for the member and Unitus. For example, we could offer a $5 reward for a member making their first check deposit on our mobile app or $2 for enrolling in eStatements. Both offer the credit union cost savings over time, a better member experience for most, and potentially illuminate technologies members didn’t know were available. These are just two of many possible examples. 

Our member rewards account will also be a great tool to encourage members to save money. It will have a high yield, there will be opportunities for cash rewards, and a “round up” savings option from our members’ checking accounts. A “round up” option automates saving by transferring the spare change from every checking transaction into the member’s rewards account. For example, if a member pays $7.50 for a sandwich with their Unitus debit card, we would “round up” the transaction to $8.00 and transfer the $.50 spare change into their member rewards account. This is a popular savings mechanism that adds additional strength to the member rewards account, and is a proven to be a successful tool. 

The scope of this project is large, but comes at a time when we need big ideas to solve big challenges. I appreciate the platform this contest has provided me and I look forward to continuing to progress my proposal. 

Blaine Bartholomew