5 Lessons Credit Unions Can Learn from the Competition

It's never fun to think about your credit union's competition, but evaluating other financial institutions is essential to growing your credit union. Here are five important things you can learn from your competitors:

1. Who Are Your Competitors?

The first thing we must do is to identify our competition. It’s easy to see the bank across the street as a competitor. But, it goes much deeper. Think beyond the obvious. We have competition coming from many non-traditional financial institutions. There are other credit unions, online financial institutions, insurance companies, big box stores such as Walmart and many other financial service providers. Who are your real competitors? Which ones really matter to your credit union?

2. Why Are They Growing?

Financial institutions have had some lean years recently. The economy has put a serious strain on spreads. Some financial institutions are rebounding faster and stronger than others. What is the difference?  If your credit union is struggling to increase membership and/or loans, perhaps it’s time to take an in-depth look at what your successful competitors are doing differently. How do your products and services compare? Are there some you aren’t currently offering, but should? Are you trying to be everything to everyone when you should be sticking with your niche?

3. Can You Learn From Their Mistakes?

Let’s face it: mistakes hurt. We’ve all made them many times and it is not fun. Pay attention to the failures of other financial institutions and take note. I’m not just talking about the complete failure as in going out of business. I’m talking about smaller scale - a promotion that didn’t go as planned, an event that was poorly attended, negative publicity or failure to have a Plan B.

Where did they go wrong? What could have made the outcome completely different? Know what doesn’t work and do your best to avoid it.

4. Where Are They?

We’ve all heard about location, location, location. The physical location, accessibility and convenience of a financial institution are all very important – but where else do you find them? Visit the websites and social media of your competitors. Do they participate in social or charitable events? Do they have a float in the local parade? Are they participating in local civic clubs? If so, which ones? Do they participate in shared branching? Your credit union may need to be more visible outside the walls of your building.

5. Where Do They Spend Their Marketing Dollars?

How are your competitors reaching members and potential members? How are they utilizing social media? Look at their websites. Read the bulk mail that shows up in your mailbox at home. What is being promoted and how? Slow down when fast forwarding through competitors’ commercials on your DVR. What makes your competitors more successful? What about special events, local outreach, and advertisements? After considering their strategies, reassess your marketing plan and overall direction. You may find the need to modify your plan with these factors in mind.

Remember, every credit union is unique. Credit unions have differences in fields of membership, demographics and geographic locations – just to name a few. There is no perfect template for a successful credit union. Identify what works for others, and if it is a good fit for your credit union, try to improve upon it. You don’t have to reinvent the wheel. There are a lot of good ideas out there. Take those good ideas and make them your own. Use knowledge of your competition to steer clear of the bad ideas and avoid the pitfalls. You may find competition to be the best thing that ever happened to your credit union.