Bank, credit union marketing in a mature market

By Tom Dougherty

Credit Union Marketing: The only way to grow in a mature market is to steal share

Credit union marketing in a mature market is a tall task. The competition to increase market share has gotten more intense regardless of business category. The goal is somewhatCredit union marketing is usually poor easier if you’re in an immature market in which the players can succeed just by selling category.

In those cases, you can just sell the category benefits to convince new customers to buy. (Think of the pharmaceutical companies, for example.)

However, most companies aren’t so lucky. What if you are in an industry, such as banking, in which there are no new customers to entice? You can’t build the category. All of us already have a bank or credit union. Even worse, from the perspective of the customer, banks and credit unions provide similar services and solutions.

In fact, most customers describe their banks as the place they keep their checking accounts.

That’s about it. However, if we take a closer look at the banking market, we can answer these questions. How do you grow market share at a bank or credit union when there are no new banking customers? How can bank and credit union marketing help with that?

What Banks and Credit Unions Have Done

credit union marketingCredit Union marketing failures are legendary. Most blame the failure on the customer. “They don’t understand the credit union difference” is the mantra. Maybe the problem is the credit unions’ inability to identify that difference in a way that is meaningful to prospects? Maybe the difference is not all that meaningful to anyone but the converted?

Banks are having a hard time creating a brand message that holds meaning to the banking customer and is different from the competition. Most bank and credit union marketing (not brand campaigns) looks and sounds the same — “Trust us. We’re your neighbor”, etc. Nearly all bank credit union marketing has included daily print advertising featuring bank interest rates. Yet the rates are very nearly the same at every bank and credit union.

They in essence all try to copy the market leader, Bank of America, and even they don’t do a great job.

New offerings do not create preference

Credit Union marketingBanks have tried to increase the meaning and relevance of their brand messages by including other investment services in their offerings. But they still fail to provide the customer a reason to choose between one bank and the rest of the financial market. Banks have certainly become more sophisticated at database mining and direct marketing. But it is all just bad bank and credit union marketing, with an inside-out view of the target audience.

Banks and credit unions have trotted out every possible customer convenience, including electronic banking. But they still haven’t given the customer a meaningful reason to choose them.

They have yet to create meaningful brands. The hard truth is that banks and credit unions are less meaningful to our lives than they were 10-20 years ago. Back then, your relationship with your banker was personal and important. You knew your banker. You made many of your transactions because you trusted your banker, and he trusted you. Today, banks and credit unions have made it nearly impossible to have that kind of relationship. (Read our bank market study here)

Current brands have no personality

Bank brands are strictly playing a numbers game with no real personality or meaning involved in the process. Decisions on loans, interest rates, credit ratings, and collateral dollars are not made based on an assessment of the customer’s character. They are made on an assessment of the customer’s numbers. Few homeowners anymore have a mortgage with their primary bank.

Many banks and credit unions actually penalize you—charge you a fee—if you come into a bank branch to make a transaction. Stopping at the ATM is something you look forward to with the same relish you do when dropping your clothes off at the dry cleaners. Is it any wonder banks and credit unions are less meaningful to the banking customer?

Or that the customer is less loyal than they were 10-20 years ago? Banks haven’t connected with customers or provided them with a reason to be loyal. 

What should bank and credit union marketing do?

credit union marketingBanks need to stop with the promotions if they desire increased market share. Customers currently change banks at the point of failure. They switch when the banks have disappointed the customer in some fashion. Customers don’t change banks because of a one-sixteenth of percentage point difference in an interest rate.

The customer who opens a checking account to get the free picnic cooler is the person who will stay until another bank offers them a free calculator. By participating in such bank and credit union marketing promotions, banks are training their customers to believe there is no difference between their brand and the brand of their competition. They’ve effectively told their customers that their brands have no meaning, which translates into a lack of value for the customer in general.

Brand meaning creates preference

credit union marketingWhy not give your customer something really valuable and desirable? Give them a brand that has meaning to their lives to increase your market share. Your long-term success can only exist if customers covet your bank brand, not your picnic cooler prizes. At Stealing Share, we know those purchase decisions are emotional, not cognitive.

We know that bank consumers crave to use bank brands that are an integral part of their own self-description. Developing a brand strategy that has an emotional attachment is how you steal share from competition in a mature market. Stealing share is the only way to grow when there are no new customers.

The bad news for the banking industry is that the market is stagnating and spinning out of control down the long dark corridor of commodity bank and credit union marketing. However, this is good news for those banks and credit unions that define their brand as being about the customer and not the bank itself. The opportunity to grow market share in this industry is enormous. The bank or credit union that does that will win and significantly grow in brand equity while increasing the bank’s market share.

 Marketing in the banking industry

Here find more articles on banks and banking.


The Bank Market

Bank Preference

Rebranding banks