Member-Attraction Opportunities

By Jon Haller
Director of Market Research
Credit Union National Assn.

As credit unions look to grow, there are tremendous opportunities for them to achieve membership growth, increase product penetration, and develop loyalty from within their existing fields of membership, as well as through expanding to community charters and/or adding new SEGs.

One potential and sometimes overlooked source for membership growth is a credit union’s current field of membership. As of June 2005, credit unions are attracting just 9% of those consumers eligible to join, according to CUNA Economics & Statistics. While, expectedly, community-chartered credit unions register the lowest member-to-potential-member penetration levels, no major field-of-membership classification records a penetration level above 13% (see graph). That means that over 85% of potential members in credit unions’ existing fields of membership can still be targeted.

Of course, the dramatic rise in credit unions obtaining community charters points to one of the prevailing approaches to addressing the membership-growth issue today.

In addition to targeting "peak" borrowers – that is, consumers between the ages of 25 and 44 – for membership growth, credit unions and banks alike are increasingly focusing their attraction efforts on segments such as consumers 18 to 24 (i.e., tomorrow’s borrowers), small business owners, women (purchasers of two out of three new cars), and, depending on their local environment, Hispanics/Latinos (now the largest ethnic group in the U.S. and growing rapidly) and other ethnic groups.

If your credit union has obtained a community charter in the past couple of years, conduct research of your potential members to measure their awareness of your credit union and their eligibility, the degrees of "loyalty" they have to their current provider, and what the credit union will need to do to persuade them to begin using your credit union.

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Consumer Loan Applications: Members Still Prefer "Bricks" to "Clicks"