Social Networks Are Changing Credit Union Marketing
Oct 12, 2008 
NACUSO Blog | By Jim Jerving
Social networks and social media are changing the way credit unions communicate and market to members. The evidence is all around us, for example, many consumers no longer look for products or services in the Yellow Pages; they go straight to the Internet. They are more likely to use a variety of online tools to connect with others or find specific information on their own.
Social networks are virtual communities developed around a certain demographic like LinkedIn or Facebook that allow users to connect with others. Social media are those media like blogs, forums, virtual worlds, wikis and social networks users can participate and contribute. If you were unaware of these terms, you are not alone. According to a study of 13,000 consumers surveyed in 17 countries, one-half didn’t know what social networking is, according to Synovate.
But Emarketer predicts that 800 million people worldwide will be participating in a social network with their mobile phones by 2012, an increase from 82 million in 2007.
Some social media hold great promise for financial services. Wesabe and Mint, for instance, could be roughly described as aggregators for personal finance with social networks underwritten by large banks. Wesabe shows all of your accounts and credit cards in one place and places your transactions into categories. It then summarizes your spending and earnings and provides tips on saving money based on your spending habits. Wesabe and Mint services are offered free of charge.
Social networks and social media are especially valuable for attracting younger members to credit unions. Currency Marketing, Chilliwack, British Columbia, launched the microsite “Young & Free Alberta” in October 2007: www.youngfreealberta.com.
The challenge was to provide a free checking account for the less than 25 year old age group and connect with the youth market in North Alberta for Common Wealth Credit Union of Canada, Lloydminster, Alberta, C$1.6 billion in assets. An additional challenge was to raise brand awareness with the difficult to reach Gen Y and create a sense of excitement with a staff of 400.
“In Alberta, nobody was concentrating on youth,” said CEO Tim McAlpine, Currency Marketing. “Common Wealth wanted to know how to own the youth market.”
Currency Marketing positioned Common Wealth as a progressive and transparent financial institution with heart, according to McAlpine. “We embraced the power of the social web by tapping into popular sites like YouTube, Facebook, Flickr and Twitter to create an immersive experience where compelling user-generated content take center stage.”
To drive traffic to the site, they used a combination of public and media relations, traditional media including radio, outdoor, point of purchase and direct mail and new media including viral messaging and online advertising. A contest was held for spokesperson for the site and one of the keys to the success of Young & Free Alberta was Larissa Walkiw, who won the contest.
“As spokesperson, it’s my role to keep the buzz going. I post daily blog entries with topics ranging from money-saving tips to pop culture to interesting web finds,” she said. “I produce a YouTube video for the site once a week. Every now and then I throw in something different like a contest or a live chat.”
During Larissa Walkiw’s tenure, which ended in August 2008, she used YouTube videos, and site visitors could follow her on Twitter, or could become fans of the Young & Free Alberta page on Facebook or browse through her photos on Flickr or catch her live broadcasts on Yahoo! Live or UStream.
The most effective social media channel on Young & Free was YouTube, according to Walkiw. “The Difference between Banks and Credit Unions: Part One” is an example of a video that became extremely popular in a short amount of time.
The results for Young & Free have been impressive. In addition to winning 12 credit union industry marketing awards to date, it has been nominated for the prestigious Forrester Research Groundswell Award. Since the program was launched in October 2007, new account openings have grown by 960% over the same period one year prior with the 19 to 25 year old age group.
The Young & Free franchise has been launched in August 2008 with TDE Credit Union, Lake Jackson, Texas, $1.3 billion in assets. The cost to launch, manage and promote an individual Young & Free program is about $400,000 per year. Currency Marketing is allotting one franchise per state in the US and one per province in Canada.
What do you think? What’s your view of social networking and how does it fit into the future of credit unions? We’d appreciate your views… please write a comment and let us know.
