Do you ever feel like your business is teetering on the edge of a cliff? Well, a whole segment of businesses in the financial service industry has got to be feeling that way despite the fact that they’re likely the better choice for most people.
These businesses even offer the kinds of services people say they want and create a natural benefit for their community through member ownership; but they’re still getting trounced.
And it all comes down to one seemingly mundane number: 53
I’m talking about credit unions. And that number, 53, is the average age of a credit union member. Having a product that appeals to Gen Xers in their prime earning years shouldn’t be a bad thing, but that membership age is only going up…because many credit unions aren't finding and keeping younger members.
From 2015 to 2023 the percentage of credit union members from the Baby Boomer generation ballooned from 28 to 39% while the percentage of Gen X or Millenials shrank from 59% to 46%. Unless something changes this trend, their membership doesn’t look to be getting younger.
And that stinks!
Credit Unions offer all sorts of social benefits; from their focus on their communities to member-ownership and local control, credit unions are an alternative to a retail finance landscape currently being dominated by very few big players.
So, what can they do?
At Creature, our focus is on helping our clients define and create their future. So with collective decades of experience working with a variety of financial institutions, we’d offer these tips:
Re-examine the members-first mindset. Start focusing on non-members.
GASP! I know, but here me out. We love the credit union's commitment to its owner-members, but if they want to expand their reach they’ve got to open the aperture and start empathizing with non-members. We’ve seen it at other employee-owned enterprises like ESOPs and Co-ops. Member-ownership can sometimes create insular cultures. This echo chamber can lead to missed opportunities or de-prioritize initiatives to benefit a new audience, even if it doesn't immediately impact members lives right now.
Make Referrals Impossible to Turn Down
Every credit union knows word-of-mouth referrals are their most valuable channel for getting new members, but because of their sometimes insular nature (see above) offers end up reflecting the kind of things EXISTING customers want, and that could be very different from what NEW AND DIFFERENT customers need. The other challenge with this is reaching new audiences where they spend time (which is also often different from where existing customers reside). Lots of people spend more time on their city’s subreddit than they do at kids sports games (even if they have sporty kids!)
Think Big, but Act Small
A lot of credit unions run their businesses using off-the-shelf technology infrastructure. This makes a lot of sense because installing, developing, and supporting bespoke technology is very expensive. Many of these off-the-shelf platforms can be customized, and that’s where the product, marketing, and experience departments should focus their efforts. Understand what differentiates your credit union from the competition in the eyes of new members, and double down on the small things that make a difference to the type of customers you are trying to reach.
Find a Fresh Set of Eyes
Being successful with any of these tactics requires practical market research experience and a knowledge of financial services. But how many of the consultants in this space are from the generation credit unions are trying to reach? The average age of financial advisors is 58, it seems plausible to think most of the consultants hired by credit unions resemble their current demographic. While it might be harder to balance deep experience and youth, credit unions should ask themselves if they’re being too conservative with the kind of help they’ve been getting.
What To Do:
First, it’s essential to start breaking down the barriers between members and non-members. Often, this means getting everyone internally to prioritize the needs of your new audience as much as those of your current audience. Consider using an Empathy Mapping exercise to get started.
Next, gather real-world feedback on what will actually drive conversions and attract new members. While surveys and polls can be helpful, they are often unreliable. We’ve designed our sprint-based research method, Words that Work, to utilize real-world customer activity and preferences. This approach not only helps you find better answers but also starts generating new leads and customers before the research is even completed.
Finally, bring cross-functional teams together for a Service Blueprinting exercise to make sure your technical and product/platform decisions are both feasible and aligned with what your new customers want.
Helping our clients create their ideal future is what we do at Creature, and credit unions are institutions we believe in.
Contact Craig@creaturestudio.com with questions about how this might apply to your organization or sign up for an Empathy Mapping Adapt session to get started.
Photo by Katherine Hanlon on Unsplash
Photo by Vitaly Gariev on Unsplash
