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Better Ways to Lure Members: CUNA Mutual Study
Friday, April 7, 2017 6:30 AM

Credit unions have an enormous opportunity to increase their reach by better explaining themselves to non-members and weakly connected members, according to a study from CUNA Mutual Group.

One out of four people do not identify themselves as credit union members, even though they have at least one credit union loan, account, or other product, according to CUNA Mutual Group's annual TruStage What Matters Now consumer research report.

“We were surprised by the number of credit union members who don’t actually identify themselves as members,” said Susan Sachatello, senior vice president of TruStage, CUNA Mutual Group's consumer brand.

The research was designed to allow credit unions to find new ways to reach non-members and under-engaged members “to meet their needs, challenge their misperceptions about credit unions, and motivate them to consider making the switch to a credit union,” she said.

The CUNA Mutual study reveals that more than half of middle-income Americans fret over finances daily.

About 22 percent of the respondents were considered “fully engaged” credit union members because they answered yes to both “Are you a credit union member?" and “Is your credit union your primary banking institution?”

The opportunities lie among the remainder, who tended to be younger and more racially diverse. They consist of:

  • “Partially engaged members” (15 percent) who said they were credit union members, but did not consider it their primary banking institution.
  • The “disengaged members” (12 percent) mentioned previously who did not identify themselves as credit union members.
  • Non-members (51 percent) who have no credit union affiliations.

These groups represent different consumer mindsets and have distinct needs, behaviors, and perceptions of credit unions, Sachatello said.

“It’s important that credit unions understand these groups individually, so they can reach each audience where they are with the right message at the right time,” she said. “Tapping into how consumers identify their credit union relationship presents an opportunity to reach and serve them in a compelling manner.”

The fact that these groups are younger and more diverse than engaged members means credit unions are better able to reach them if their brands reflect the target’s cultural identity and win personal recommendations.​​

Among the three opportunity groups, 28 percent have a college degree compared with 21 percent of engaged credit union members, and 31 percent make less than $35,000 a year, compared with 26 percent of engaged members.

Another sign of credit unions' potential is that 45 percent of bank customers are strongly satisfied with their financial institution, compared with 71 percent of credit union members.

The top two enticements for non-members to join a credit union are a higher interest rate on an account or a financial perk for joining. Others were a lower interest rate on a loan or free financial counseling, such as workshops.

Nearly half of millennials who use a credit union joined due to a recommendation by family or friend.