The Credit Union Brand: What Is It Good For? Larry D.

Compeau, PhD Associate Professor in Consumer/Organizational Studies Clarkson University

The Credit Union Brand: What Is It Good For? Larry D. Compeau, PhD Associate Professor in Consumer/Organizational Studies Clarkson University

Copyright 2008 by Filene Research Institute. All rights reserved. ISBN 978-1-932795-52-3 Printed in U.S.A.

Filene Research Institute Filene Research Institute Progress is the constant replacing of the best there is with something still better! Edward A. Filene Deeply embedded in the search for better ways members. Open inquiry, essential parts of the credit union tradition is an ongoing to understand and serve credit union the free flow of ideas, and debate are true democratic process.

The Filene Research Institute is a 501(c)(3) not-for-profit research organization dedicated to scientific and thoughtful analysis about issues affecting the future of consumer finance. Through independent research and innovation programs the Institute examines issues vital to the future of credit unions. Ideas grow through thoughtful and scientific analysis of toppriority consumer, public policy, and credit union competitive issues. Researchers are given considerable latitude in their exploration and studies of these high-priority issues. The Institute is governed by an Administrative Board made up of the credit union industry s top leaders. Research topics and priorities are set by the Research Council, a select group of credit union CEOs, and the Filene Research Fellows, a blue ribbon panel of academic experts. Innovation programs are developed in part by Filene i3, an assembly of credit union executives screened for entrepreneurial competencies. The name of the Institute honors Edward A. Filene, the father of the U.S. credit union movement. Filene was an innovative leader who relied on insightful research and analysis when encouraging credit union development. Since its founding in 1989, the Institute has worked with over one hundred academic institutions and published hundreds of research studies. The entire research library is available online at www.filene.org. iii

Acknowledgments Acknowledgments The success of this research depended greatly on those who volunteered to participate, both the members and the management of six credit unions. Due to promised confidentiality and anonymity, I am unable to thank by name each individual interviewed. However, they know who they are, and I thank them deeply for their time, honesty, frankness, and willingness to tell me what they really felt. I learned a great deal from them. I also want to thank Rajesh Sethi, my good friend and colleague who accompanied me on some of these trips and helped with the interviews. A special thanks goes to Josey Siegenthaler and George Hofheimer for their patience and support throughout this research project and for their insightful advice and comments. Finally, I am deeply grateful to William Kelly, who pioneered the use of qualitative research at the Filene Research Institute back in 1998, when he invited me to submit the very first qualitative research proposal. v

Table of Contents Table of Contents Executive Summary and Commentary About the Author xiii Chapter 1 Introduction 1 Chapter 2 Key Research Findings 13 Chapter 3 Recommendations for Credit Union Brand Management 25 Appendix 1 Methodology 43 Appendix 2 Elkhart County Farm Bureau Credit Union: The Abe Lincoln of Credit Unions 49 References 55 vii

Executive Summary and Commentary Executive Summary and Commentary By George A. Hofheimer, Chief Research Officer Credit unions need to start a national branding campaign. If I had a nickel for every time I heard this statement in credit union circles, I d have a heavy bag of nickels. There are a few problems with the desire to conduct a national credit union branding campaign. First, what brand promise could be conveyed by over 8,000 unique institutions? Second, lots of national brand campaigns have already been conducted by the Credit Union National Association (CUNA). In fact, at this very moment I am looking at my vintage, eBay- procured 1973 print advertisement with TV star Chad Everett proclaiming, Join your credit union. It s where you belong in his stylish leather sport coat. Problem is, previous national credit union branding campaigns have not resonated with consumers1 which brings me to the final problem with a national credit union branding campaign, and that is, do consumers really care about the credit union brand? While much work (and effort) is spent on a national credit union brand, relatively little research today focuses on the brand identity of individual credit unions. This topic is important because over the last 10 years credit unions rapidly expanded from their original sponsor organizations into broader membership groups that are based on multiple (and sometimes unrelated) employer groups, vast metropolitan areas, countrywide professional groups, and even virtual relationships. With this broadening come name changes to better reflect who individual credit unions are serving. So, Xerox Federal Credit Union is now Xceed Financial Credit Union, John Deere Community Credit Union is now Veridian Credit Union, and so on. The Filene Research Institute gave the research task of better understanding individual credit union brand identity to Larry Compeau, PhD, professor of consumer/organizational studies at Clarkson University. Compeau took a qualitative research approach whereby a small number of in- depth interviews were conducted with a variety of credit union types (single-SEG, multi- SEG, community, etc.), credit union members (age, length of membership, gender, etc.), and credit union employees (CEO, senior management, staff, etc.) across the United States. Compeau s techniques assessed interviewees conscious and subconscious thoughts with regard to their particular credit union. For each credit union, the number of interviews was determined by the point For a complete discussion of this topic, please see A National Brand for Credit U nions: A Compendium of Opinions about a National Brand for the Credit Union Industry, CUNA Marketing and Business Development Council, 2008. ix

at which the overall thoughts and feelings conveyed by interviewees became repetitive and revealed little new information. Compeau s key findings are summarized below: Members hold a strong brand identity of their individual credit union. They tend to describe their credit union with the following attributes: reliable, friendly, helpful, not flashy, and informative. Employees hold weaker perceptions of their credit union s brand identity than their members. Except for longer- tenure members who may have helped build their credit union, credit union members tend not to differentiate credit unions generically from banks. One of the small points of differentiation that credit union members could verbalize is that credit unions are a little more personal but not as sophisticated as banks. From these high- level findings, Compeau provides a comprehensive set of recommendations for credit unions to consider as they build their individual brands. Specifically, he recommends that credit unions: Strategically position their individual brand with the focus on emotional rather than functional qualities. The financial services marketplace is rife with brands positioned around service, quality, convenience, and price; compelling brands tackle the less obvious emotional qualities that are more difficult to compete with, like localness or associations with a certain lifestyle (e.g., environmentalism or religious beliefs). Don t obsess over their brand name . The name isn t a brand until you ve branded it. If I had told you 10 years ago that Google would be one of the world s top brands, you d probably Giggle. Enact the brand . Make simple connections for members and non- members about what your brand means. Compeau contends the positioning of a brand is conjured up by managers but is meaningless to consumers unless they can make sense of what the brand means. Build a local credit union brand community . Individuals who become members of a strategically well- positioned credit union feel that they belong to a special group of people who are different in some way from other consumers. If you ve ever talked to an Apple user, you ll understand what brand community is. Compeau also veers into a discussion on the concept of a national credit union brand since the topic emerged during the course of the research. Besides adding another nickel to my overflowing bag, Compeau s informed discussion on this topic offers a few clues on what x

an effective national branding campaign could look like. He claims, From our research, we take the position here that a national credit union brand might be beneficial, but only in an indirect manner not necessarily a ringing endorsement for what many think is a panacea for U.S. credit unions. So rather than going to the same old well of a national branding campaign, consider saving those nickels and focus on your individual credit union s identity. The benefit may be much more impactful, according to this research study. xi

About the Author About the Author Larry D. Compeau, PhD Larry D. Compeau is an associate professor in consumer/ organizational studies at the School of Business at Clarkson University. His research interests are in pricing, consumer behavior, marketing strategy, and public policy issues in marketing. His work and expertise in consumer behavior have been relied on in highly prominent popular press including Time magazine, Newsweek, the Washington Post, National Public Radio, Christian Science Monitor, and the Associated Press. Dr. Compeau has published over 30 papers. His research has won numerous awards and has appeared in top journals, including the Journal of the Academy of Marketing Science, the Journal of Public Policy & Marketing, the Journal of Business Research, the Journal of Consumer Affairs, the Review of Marketing Research, and Pricing Strategy and Practice: An Internationa l Journal. He also was editor for a special issue of the Journal of Public Policy & Marketing focusing on behavioral pricing. In an article published in 2002 he was cited as the fifth most published author over the past decade in that same journal. Dr. Compeau currently serves on the editorial boards of four journals, including the Journal of Retailing, the Journal of Public Policy & Marketing, the Journal of Consumer Affairs, and the Journal of Product and Brand Management. Dr. Compeau has served as an expert witness for several legal cases involving consumers interpretations of price. Dr. Compeau also conducted the research and published the Filene report Successful Turnarounds from Bad Credit to Good: What We Can Learn from the Borrower s Experience in 2001. xiii

Credit unions have always enjoyed the luxury of knowing, or at least believing, that they are special; they are nonprofit institutions dedicated to their members seemingly an obvious and startling difference from traditional banks. Most everyone knows that Heinz is the slowest ketchup and 7-Up is the un-cola, but do consumers really know that credit unions are the un-banks ? Most members we interviewed seemed to lump credit unions in with banks. CHAPTER 1 Introduction Credit unions have always enjoyed the luxury of knowing, or at least believing, that they are special; they are nonprofit institutions dedicated to their members seemingly an obvious and startling difference from traditional banks. Most everyone knows that Heinz is the slowest ketchup and 7-Up is the un-cola, but do consumers really know that credit unions are the un-banks ? Most members we interviewed seemed to lump credit unions in with banks. CHAPTER 1 Introduction

Credit Unions are not banks! Credit union CEO But what is a credit union? Even the words credit union do not seem to convey a specific meaning in modern vocabulary. For most consumers, credit is what you owe, and a union is an organization of employees formed to bargain with the employer. How does this name tell today s consumers what credit unions are and how they differ from banks? Yet, this quote from a credit union CEO captures what credit union insiders think everyone knows: Credit unions are not banks and differ in seemingly many obvious and important ways. In fact, the historical perspective has always been that credit unions can compete with banks only because of the stark differences between the two. In order to be competitive in today s financial services markets, institutions must differentiate themselves so that consumers can easily identify them according to that difference. If they are viewed as all the same, then financial institutions become commoditized and consumers have no compelling reason to pick one over another. Thus, HSBC, the world s local bank, wants to be seen as a powerful international bank with worldwide resources and impact and yet available in your community. This brand positioning allows consumers to select a bank that best meets their top priority needs. But what specific need or set of needs comes to mind when someone says credit union ? More specifically, what images and identities are conjured up with First Trust Credit Union, Elkhart County Farm Bureau Credit Union, Empower Federal Credit Union, Interra, and Sunmark Federal Credit Union ? Credit unions have always enjoyed the luxury of knowing, or at least believing, that they are special; they are nonprofit institutions dedicated to their members seemingly an obvious and startling difference from traditional banks. Most everyone knows that Heinz is the slowest ketchup and 7-Up is the un-cola, but do consumers really know that credit unions are the un-banks ? Most credit union 2 22

members we interviewed for this study seemed to lump credit unions in with banks. This has become the bank of choice for me. . . . so they re becoming more like a bank and they sell their loans now. This bank has just grown tremendously in the last . . . since they ve built this building, I think they ve grown tremendously. And, I think people see it as a bank. It s our bank, it s our only bank. So what is going on here? Is this merely a simple generalization that really doesn t mean anything? Do consumers really know the differences but out of simplicity (since the services offered are similar) merely lump them together under the rubric of banks? Certainly we know that consumers might consider both banks and credit unions in their choice set. Or, do members really see credit unions as just another bank? The answers to these questions are critical in formulating future credit union broad strategies as well as more specific branding strategies. Even if members are not so knowledgeable about what credit unions are and how they differ from banks, surely credit union managers, whose job and mission it is to communicate these differences, believe that most members know the difference but maybe not. Here is a verbatim portion of an interview we conducted for this study: Interviewer: And you just switched [the credit union name], but then the other part of your name is credit union and that stayed the same. What do you think that means to people? Response: Nothing. Interviewer: Nothing? Response: Un, huh [shaking head back and forth] nothing, they don t care. Interviewer: So, if you took that [credit union] out of your name . . . ? Response: I don t think it d make a difference not at all. It doesn t mean anything. People don t know what it is. Interviewer: Do you think people think you re just a bank? Response: Yes. Yup, especially now. Interviewer: So, the credit union part of who you are seems to be really important to you and to [the CEO] and to your management team and your staff, but you don t think it trickles down to the members? Response: Membership, no. 3 33

Interviewer: Do you think they know when they deposit money here, they own the credit union? Response: No. They are looking for the best rates, the best service. We re a bank. Thus, a series of intriguing questions remain: Do members see credit unions as different from banks? Exactly what is the brand image associated with the minds of the members? credit union in

Do individual credit unions have a brand image separate from credit union ? If so, what is it? What are the managers perceptions of their credit union brand (brand identity)? What do managers believe about members impressions, and how do they compare with what members think and feel? We will focus on these questions in this study. What Is a Brand? The American Marketing Association defines a brand as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition (Keller 2008, 2). Thus, the primary purpose of a brand is to signify instant meaning that differentiates this brand from all others in meaningful ways. However, this definition focuses on a managerial view of a brand. What about a consumer- based view of a brand? For consumers, a brand incorporates image and reputation as part of its larger gestalt. Thus, Keller (2008) considers a brand more like a set of mental associations held by the consumer that add to the perceived value of a product or service. It is important to distinguish between brand identity (how the organization sees itself) and brand image (how others, most importantly consumers, see the brand or organization). Thus, brand identity answers the question, Who are we?, and brand image answers the question, Who do people think we are? In this research, we use the general term brand in a very broad sense capturing all of the subtle nuances of what the names, terms, signs, symbols, experiences, and communications mean to people in terms of a holistic image of, or impression associated with, the credit union. To differentiate between the consumer s perspective or in this particular research, the credit union member s perspective and the manager s perspective, we use the terms brand image and brand identity, respectively. It is equally important to understand what brand equity is and how it relates to the brand. All branding efforts are aimed at one 4

objective: building brand equity. From a consumer s perspective, brand equity is really nothing more than the differential effect that brand knowledge has on consumer response to the marketing of the brand (Keller 2008, 48). For example, if consumers respond the same way to the marketing of Maxwell House coffee as they do to the marketing of generic coffee, then there is no brand equity. Just as with most products and services, probably the most important component of a credit union s brand is the name. Sometimes the name is almost automatic, as in the case of a single- sponsor credit union. More recently, however, as credit unions expand into multiple SEGs and embrace community- based charters, names have been developed and selected ostensibly to convey a certain image or identity to consumers and members. Many times the attempts are influenced by history, politics, special interests, or social discourse. No research to date has examined exactly what the name, or the broader aspect of the brand in general, means to members, regardless of how it came to be. Why Study Credit Union Branding? Brands are important for credit unions because they provide important functions. Brands can instantly allow consumers to recall specific images associated with the credit union, wrapped up in a nice, tight mental representation. Most everyone can immediately recall specific identities for popular brand names such as Apple, IKEA, Starbucks, Pixar, Diehard, Hallmark, and Victoria s Secret can any credit union boast the same? Some brand names instantly signal the brand image or identity to the consumer, such as Juicy Fruit gum, Krispy Kreme doughnuts, Old El Paso Mexican food, and Jell- O gelatin (does anyone really call it gelatin anymore?), since the names contain the main feature of the brand identity and the product. Certainly, the experiences consumers have with the products further etch the brand image into their minds. The experiences a member has with the credit union can also build special meaning into the brand over time. For example, if the term credit union is viewed as a brand, consumers will immediately recognize it and associate certain characteristics with it, allowing them to simplify their choice process when it comes to selecting a financial institution. Since only a credit union can use the credit union name, it is unique and can endow the services offered with special meaning. This special meaning can be a competitive advantage. One hurdle, however, is that the term credit union does not appear to convey any significant modern interpretation. Nonetheless, other brands have overcome this obstacle, including Porsche, Levi s, and Disney (all people s last names that now mean something totally different); Arm & Hammer (named and modeled after a mythical god of fire and metalworking, Vulcan, that 5

has no relevance anymore); and Fruit of the Loom (hardly intuitive). In each instance, the firm had to create a new brand identity while keeping the old brand name. It is also possible to develop a brand that has no meaning or connotation whatsoever and build the brand identity from scratch. Possibly the best modern- day example of a brand that created its identity from scratch is Google. So, although it might be preferable to develop a new name for credit unions to reflect the main strategic positioning of the brand, it is not impossible to create new meaning for the term credit union over time. One hurdle, however, is that the term credit union does not appear to convey any significant modern interpretation. In 1999, CUNA published a document that laid out an ambitious national branding campaign for credit unions based on years of research and development. A key component of this initiative was national branding. Credit unions need to effectively differentiate themselves from other financial institutions . . . The objectives are to raise visibility, and build market share and brand resiliency (6). In part, this research then examines whether the members we interviewed are aware of and believe in that differentiation and have a grasp of the brand identity. One question is whether such a thing as a credit union brand even exists. Do credit union members have specific images in their minds that capture the essence of their credit union and what it means to them? If there is such a thing as a credit union brand, what advantages might it convey? How would credit unions go about managing their brand? Marketing researchers have consistently documented the value of a brand, including such assets as recognition, legitimacy, and familiarity. Moreover, effective branding can lead to strong customer preference and loyalty with the added advantage of supporting price premiums. Marketing researchers have consistently documented the value of a brand, includi ng such assets as recognition, legitimacy, and familiarity. Moreover, effective branding can lead to strong customer preference and loyalty with the added advantage of supporting price premiums. Although more concerted efforts have recently been implemented to attempt to build a more universal and broad credit union brand image across the country (CUNA 1999), a compelling unified credit union brand image has historically been lacking. Credit union members typically know their local credit union but have no notion 6

of a universal credit union image. Moreover, credit unions, and their names and potential images, have dramatically changed in the last decade. For example, whenever an employer that is a single sponsor of a credit union (e.g., Acme Corporation/Acme Credit Union) hires a new employee, this name sharing makes a clear connection between the employer and the credit union, creating an immediate brand image and identity and some level of brand equity based on the new employee s image of the employer. That is, the image of the employer in the mind of the employee gets transferred to the credit union (for good or bad). In these instances, membership in the credit union is strongly positioned as a fringe benefit to the employee. However, with the proliferation of SEGs and more community- based chartered credit unions, credit unions are adopting more abstract, global, and umbrella- type names unrelated to the primary sponsor (e.g., First Credit Union). Thus, the immediate brand image and equity that come with sharing the employer s name are lost. In response, some credit unions have attempted to select names that recapture their ability to brand their image and identity. To address these issues, the credit union should: Firmly establish any existence of credit union brands. Carefully disentangle the more global credit union the local credit union brand. brand from

Gain a better understanding of what the credit union brand is and what it means to its members. Without some baseline understanding of the nature of credit union brands, any assessment of causal impact will be undermined since we will not know what the brand actually means. What s So Special about Credit Unions? Credit unions occupy a unique position in the landscape of financial institutions in America. The credit union s legal status, corporate structure, and organizational design are substantially different from those of other financial institutions, with an overall focus on members (consumers) rather than stockholders. This status was, and still is, believed to offer credit unions somewhat of an exalted position in the eyes of management after all, members are not only customers, but owners of the credit union. This image of a financial institution designed from the beginning to exist not to make money, or profit, from its customers, but rather to return any profits to its customers/members has been a compelling thrust for many years. The brand identity associated with credit union has mainly relied on this cooperative structure and spirit. But, prior research has never closely examined the credit union 7

brand from both the members and management s views. We do not know what members experience, feel, or think or how they respond to the credit union brand, if one even exists. This report examines the credit union brand at two levels, the credit union brand and the individual brands of credit unions (e.g., community ), and from two perspectives, that of management and that of the members. The focus here, however, is on the members views. Getting to the Credit Union through Research Brand

Given this historical perspective, to simply assume what the brand credit union means to members is unfounded. Despite all the brochures, signs, banners, pens, and magnets, the brand identity espoused by credit unions may not be the brand image that is held in the minds of the members. Thus, there is a need to examine members perceptions of credit unions and what they mean to them. These perceptions come from the credit union s marketing activities and from the members experiences with the credit union. They include interactions with the staff, visiting the facilities, reading the literature, obtaining a loan, banking online, and so forth. Thus, creating a deep understanding of members experiences with their credit union will help credit unions more fully realize what the credit union, and the credit union brand, means to members. This insight should help credit unions better position the credit union brand in the multidimensional brandscape in members minds, creating higher member satisfaction, greater loyalty, and greater brand equity. The goal is to better understand the significance and meaning of the credit union brand. While a quantitative approach could be helpful in establishing certain characteristics of members perceptions of their credit union, to understand the meaning of the brand, we employ a deeper, qualitative approach to gain an in- depth look at members experiences, thoughts, and feelings. Surveys cannot probe the depth of the experiences of members to see in everyday activities what the credit union means to them. Even an ethnographic approach is not well suited for this endeavor since participant observation will not necessarily allow the researcher to dig deep into the participant s experiences. The primary method used in this research (individual, in- depth interviews) allows the researcher to focus on a narrow topic but develop a great deal of depth. One particular benefit of qualitative research is the luxury of emergent design. That is, the design of the research can and should change over the life of the project as the researchers learn more as part of the interviewing process. For example, at first the design 8

called for interviews only with members. But as background interviews with credit union CEOs were conducted to get preliminary insights, it became obvious that interviews with management at each credit union would be necessary to situate the members narratives. This design change added greatly to our ability to interpret the results and provide more useful recommendations. A total of 29 interviews across six credit unions were conducted. Sixteen interviews were with credit union members, and 13 were with management. Although generalization across age, social class, marital status, and other demographic categories is not a goal of this research, nor is it tenable given the methodological approach, the participants did cover a broad spectrum of demographics, including both male and female; a wide range of ages (an educated guess would be ages 20 to 75 we didn t ask); marital statuses such as single or married with various numbers of children at different ages; a wide range of occupations, from laborer to small business owners, college professors and doctors; and education from high school to advanced college degrees. Of course, all credit union management we interviewed were employed at the credit union in some supervisory capacity, but at all credit unions we interviewed the CEO, a marketing manager, and at least one other senior management person. All members interviewed were currently employed outside the home or were retired. We also collected materials from the credit unions, including brochures, gifts (e.g., pens and magnets), and other material that we thought might help us understand the credit union better. We examined their Web sites and even some forms such as loan applications. For those credit unions that participated fully in the project, we provided a brand sketch. This written document provided each credit union with a summary snapshot of how we interpreted the members impressions of the credit union in the form of brand identity. Each brand sketch was unique to each credit union and varied considerably. Although all sketches are held in strictest confidence, the Elkhart County Farm Bureau Credit Union2 permitted us to include its brand sketch here (Appendix 2) for illustration purposes and because it serves as an exemplar for some of our key results. The interviews proceeded in two stages. The first stage consisted of an open- ended unstructured depth interview as described here and in Appendix 1 in more detail. Once this part of the interview was exhausted, the interview then employed other qualitative techniques that took a more direct approach at uncovering deep impressions Shortly after the research study was completed, the Elkhart County Farm Bureau C redit Union changed its name to Interra Credit Union due to legal challenges from the Farm Bureau system. 9

about the member s credit union. For example, free association, projective techniques, and metaphorical approaches were employed. At the end of each member interview, a form and a stamped, self- addressed envelope were provided for each member to write down a story about a specific experience that came to mind and then answer a series of questions about that experience (see Appendix 1 for details). Management participants were not required to complete this step. In this report, we present the results of this research as both an interpretatio n of the participants narratives, suggesting several key themes that emerged from the transcripts, and a description of whatever common themes we could derive in terms of brand identity. We then translate these themes into recommendations for credit union branding. This research then diverges from many previous efforts in four distinct ways. First, the research employs a multimethod design that includes phenomenological depth interviews, free association, projective techniques, metaphor making, and written narratives. Second, a qualitative approach that focuses on people s experiences is taken, rather than the more traditional quantitative (i.e., survey or secondary data) examination. Third, this research examines brand image from both the PROJECTIVE TECHNIQUES To gain an understanding of any brand image that might exist, we must first delineate the member s brand knowledge. That is, what do the members currently know or believe about the brand (the credit union)? Of course, the most direct method is to simply ask. However, people sometimes have difficulty expressing their feelings and thoughts, and other times they are concerned about whether what they say is appropriate, especially to a researcher they have never met before. Revealing true feelings requires a lot of trust. Just the fact that the interviews were conducted mostly at the credit unions might prompt members to focus on the positive. So, we must turn to more unconventional research methods to get an accurate depiction of brand knowledge. Projective techniques attempt to uncover the true thoughts and feelings that may be difficult to express for a whole host of reasons. By asking members to project, that is, disconnecting the members thoughts and feelings from themselves, they may be better able to reveal their true feelings. While there are many projective techniques, possibly the most famous is the Rorschach test asking subjects to tell the researcher what an ink blot looks like. In this research we use more mundane techniques, including word or free association, comparison tasks, completion tasks,

and a variation of the Zaltman Metaphor Elicitation Technique (ZMET). See Appendix 1 for more details. 10

members and the managers (brand identity) points of view. Fourth, this research looks at both the broader image of credit union as well as the specific image of several individual credit unions. It is important to recognize that this research is all about creating a deep and rich understanding about credit unions and their brands. It is focused on understanding what members credit unions mean to them in their everyday lives. Thus, a quantitative approach would simply not be appropriate in this instance. Of course, this type of qualitative research does not allow us to generalize to all credit unions, nor was it ever the goal of this research to do so. This research digs deep and allows us to see, to grasp, and to develop a deep understanding of a smaller number of credit union members and their relationships with their credit union. We can then apply this understanding to general cases to develop deep insights and finally make recommendations. We first present our findings on credit union brands, and then we provide recommendations for managing credit union brands. EXISTENTIAL PHENOMENOLOGY In this research we employ an approach called existential phenomenology. This paradigm joins the philosophy of existentialism with the methods of phenomenology. Within this paradigm, the goal of research is to describe experiences as they are lived and interpret the meaning of those experiences. We seek to understand the events of everyday human life, free from presuppositions. What that means is that no external structure is forced on the participants. An old adage is particularly relevant here: I will learn more about you by the questions you ask than you will ever learn about me from my answers. Thus, the unstructured depth interview is the preferred method. In this way, no artificial definitions or boundaries are placed on the participants, and their stories are allowed to unfold naturally. It is through this paradigm and process that the meaning of the person s existence emerges both for the person and for all those around him or her, including the researcher. What emerges is a thick and deep description of the lived experiences that allows the researcher to interpret the meaning and significance of those experiences in the participants everyday lives. See Appendix 1 for more details.

This research failed to find any strong global sense of credit union as a brand, at least from the members perspective. About the only sense we could identify of any overarching brand image for credit union is more personal. That is, most members, when asked what a credit union is, or how credit unions differ from banks, or what credit union means to them, stumbled a bit, but eventually mentioned that credit unions are more personal. CHAPTER 2 Key Research Findings This research failed to find any strong global sense of credit union as a brand, at least from the members perspective. About the only sense we could identify of any overarching brand image for credit union is more personal. That is, most members, when asked what a credit union is, or how credit unions differ from banks, or what credit union means to them, stumbled a bit, but eventually mentioned that credit unions are more personal. CHAPTER 2 Key Research Findings

The Meaning of Credit Union Name Brands: A Credit Union by Any Other Name . . . In many respects, the key findings of this research were quite unexpected. We fully anticipated that members would be able to easily articulate some mental model of their image of their credit union and for credit unions in general such that it would differentiate them from other financial institutions. However, what we found is far more complex than anticipated. Although there were some general findings that cut across all members from all credit unions, much of what we found does not. In fact, our results depend on several critical factors, including: Generation. Member versus manager. Level of analysis. Type of credit union (single-sponsor versus multi-SEG or community- based). Culture. We use generation here to denote the cohort group that we simply divide into three segments: retired members, working members, and new members. Although generation is dependent on age, it captures much more, including certain common experiences that one cohort has lived through that others have not. We also use this phrase to denote the length of time that the member has been involved with the credit union, since, again, they seem to correlate well. Thus, generation refers to age, length of membership, and common experiences (a simplistic categorization, but one that fits quite well). Most retired members are over 60 (some are between 55 and 60), have been credit union members for decades (some were actually founding members), and grew up in a culture where saving and frugality were values more universally embraced. Working members typically are between 35 and 55, have been with the credit union less than 10 years, and rely on the credit union mainly for direct deposit and credit products (car loans, 14 1414

mortgages, etc.) as they buy homes and raise families in their communities. New members are usually under 35 and typically have been with the credit union less than three years. The classification of member versus manager should be obvious. Level of analysis is defined by whether we are looking at the local credit union, the community in which it resides, or the national level of credit unions in general. The type of credit union also played a critical role in making sense of the interview data. A clear dichotomy emerged between members of single- sponsor credit unions and members of multiple- SEG and community- based credit unions. Finally, culture refers to the culture we found at all three levels: individual credit union, community, and national credit union. We first discuss our findings for the general brand of credit union and then focus on the findings for individual credit unions. The Credit Union Brand Does Not Exist Anymore If It Ever Did This research failed to find any strong global sense of credit union as a brand, at least from the members perspective. About the only sense we could identify of any overarching brand image for credit union is more personal. That is, most members, when asked what a credit union is, or how credit unions differ from banks, or what credit union means to them, stumbled a bit, but eventually mentioned that credit unions are more personal. [We] mostly use it like a bank; although it seems a little more per sonal than a bank. They are very warm, friendly, personal. This image, however, flows from the bottom up, not the top down. That is, most members feel that credit unions in general are more personal because they feel that their own credit union is more personal. Since it was beyond the scope of this research project (but an excellent question for future research), it remains to be seen whether non- members share this image, and if so, why being more personal would not motivate them to become credit union members. Since it was beyond the scope of this research project (but an excellent questio n for future research), it remains to be seen whether non- members share this image, and if s o, why being more personal would not motivate them to become credit union members. A quick examination of Figures 1 and 2 seems to suggest some other brand personality characteristics. For example, several members 15

indicated that if their credit union were a car, it would be a Japanese car (Toyota or Honda), suggesting that it was because these cars are reliable, dependable, functional, and not flashy. Similarly, if the credit union were an animal, the family dog was often mentioned, invoking traits such as friendly, dependable, and hard working. In fact, across all metaphor questions we see the following basic characteristics: Dependable. Reliable. Functional. Friendly. Plain, not flashy. Thus, the temptation here is to ascribe these characteristics to all credit unions in general. However, when further probed, the members specifically stated that they do not believe or even know if other credit unions are similar to their credit union. Therefore, these characteristics must remain specific to each credit union. Nonetheless, even if we accept that these characteristics might carry over to credit unions in general, they do not seem to be very compelling and they are likely similar to how consumers would describe their favorite bank. Most of the members interviewed could not and do not significantly differentiate between credit unions and banks. Figure 1: Taxology of Metaphors Provided by Members about Their Individual Credi t Union CarAnimalOccupationFabricMagazineFamily dog (8) Financial advisor (3) Cotton (5) Horse (3) Engineer (2) Corduroy Cat (2) Fireman Spandex Badger Security guard Silk Koala bear Teacher Burlap Human resources Polyester (wash & wear) Carpenter Architect Postal carrier Toyota/Honda/Japanese (7) Chevy Impala (2) Buick (2) Chrysler LeBaron Cadillac Chevy Monte Carlo Lexus Time (2) Newsweek (2) US News & World Report Money Life Handyman Good Housekeeping Reader s Digest Sports Illustrated GQ (Gentlemen s Quarterly) Figure 2: Main Metaphor Descriptive Characteristics

16 CarAnimalOccupationFabricMagazineReliable Friendly Helps people Not flashy Infor mative Dependable Hard working Analytical Versatile Functional Dependable Comfortable Not a lot of bells and whistles Strong

People see it as a bank. It would be indifferent to me whether it be a credit union or . . . whatever. Some members did articulate a general sense of knowing that credit unions are somehow different from banks, but this was never expressed as a compelling differentiation, nor was it usually explicated. In other words, they know credit unions are supposed to be different somehow, but just how escapes them. Again, members usually feel that credit unions are more personal than banks. Most members do not recognize credit union as a brand, nor can they describe what credit unions, in general, are and how they differ from banks. They are not aware that all credit unions are based on the same basic tenets. In fact, several members asked the researchers to describe the differences between a credit union and a bank. A result of this lack of a definitive image of credit unions in general engenders a concomitant lack of any significant level of loyalty to credit unions as a brand of financial institution. When asked if they would look for another credit union if they had to move, most simply indicated that if one were convenient they would consider using it, but being a credit union alone was not a compelling reason. Thus, there was a small but generally insignificant level of loyalty to credit unions in general. As one member put it, I m not attached to [credit unions]; I m attached to what they offer. One exception was with longtime credit union members. Typically, these people have been members for more than 30 years, and some are even founding members of their credit union. This group of members has a keen sense of the In other words, they know credit unions are supposed to be different somehow, but just how escapes them. importance attached to what they sometimes refer to as the

credit union movement. Most, but not all, firmly grasp what credit unions are, how they differ from banks, and why they would look for another credit union should they ever move. For example, one member who was a founding member of the credit union clearly knew everything about credit unions in general, including organizational structure, legal structure, and the cooperative philosophy. One member, one vote. I like that . . . I m only one vote, but, never theless, I can go in and do it. I realize the difference between a credit union and a bank. There are some legal structure issues that one can do and the other can t.

Even the most knowledgeable members, however, still have trouble speaking specifics about the differences. For example, all but two members were not aware that credit unions are not- for-profit organizations. 17

Managers seem to have a much better grasp than members, but many still do not know or fully embrace the cooperative philosophy underlying credit unions.3 Of course, as would be expected, all CEOs demonstrate a depth of knowledge regarding the credit union legal and organizational structure; however, interestingly enough, the level of commitment and conviction to the fundamental ideals of the cooperative spirit and day- to-day implementation of that spirit upon which the credit union culture is based varies considerably. This level of conviction (or lack thereof) trickles down into the heart and soul of the credit union itself. We will say more about this in the next section when we discuss the individual credit union brand, but it is important to recognize that some CEOs articulate a very deep commitment to the cooperative philosophy, evidenced by observations while visiting the credit union and by the interviews of other management staff and members. Others never even acknowledge any sense of being a cooperative they are focused on running a business. Another, and a bit more insidious, characteristic of credit unions in general also emerged from members. Often, members comments were tinted by what we might term limited competency. Members spoke about how their credit union may not offer the latest products or services or be as professional as a bank. A slight skepticism about the solidity of the credit union also crept in from time to time. I think there are some credit unions out there that are really strug gling, and for that reason, I would be pretty selective about what credit union I would [join]. It pulls away from that big city feel, being professional. They re small and limited, but that s okay. They re very friendly. Even the not- for-profit status was not always viewed in a positive light. If we get to a place where it s not- for-profit and we can t compete with them, we obviously have lost our place in the banking industry. A quick examination of Figures 1 and 2 reinforces this lackluster image. The metaphorical descriptions focus on rather mundane and functional attributes such as reliable, dependable, hard working, and plain not a bad set of attributes, but not exactly dynamic or compelling. In sum, credit union as a national brand really does not exist in terms of holding meaning or significance to members. About the only characteristic or personality the credit union brand holds is that most members feel that all credit unions will likely be a little more personal than banks. There does not seem to be a sense of the we are all in this For a complete discussion on this topic, please see John Gatewood and John Lowe, Employee Perceptions of Credit Unions and Implications for Member Profitability (Madison, WI: Filene Research Institute, 2008). 18

together, looking out for each other cooperative spirit that is thought to be the hallmark of credit unions in general. Nor did we find any value attached to the fact that credit unions are not- for-profit organizations with a cooperative structure. One member, well aware of the differences between credit unions and banks, put it this way: Credit unions in general are unique at least in some way between the bank and the credit union, but I would like to see them spend more time being unique for the reasons that we re in the credit union. This individual is a member of the credit union because the rates were better and he wants personalized service. But when it came to evaluating the personalized service, he noted, I think the credit unions need to look into what they can do so that you need them [like] more personalized service. Thus, members do not recognize credit unions in general in terms of what one might expect if it were acting as a brand. There does not appear to be any equity, loyalty, significant meaning, or mental models associated with credit union except for long- term and highly involved members, and this group of members is disappearing rapidly. As will become even more obvious, a paradox emerged in that while a global brand for credit unions is nonexistent, or very weak at best, a very strong brand image often exists for local individual credit unions. The Individual Credit Union Brand: It s Who You Are That Counts, Not Your Name All you have, see, is the experiences. That s all there is Johnny to everything just the experiences. Burgess Meredith in Grumpy Old Men Results at the individual credit union level differ markedly from the more global level of credit unions. Here we found not only deep meanings and connections but also high levels of loyalty for some credit unions. Members wrote and talked about specific experiences that are deep in meaning to them and reflect an obviously valued relationship with the individual credit union. Although members are not all that knowledgeable about what credit unions are and how they differ from banks, they certainly know who their credit union is and why they are loyal. In fact, while all but one member indicated that taking credit union out of the name would not be detrimental (that person was a founding member), many have significant attachment to the local part of the name and the local credit union. 19

This attachment, however, is much stronger depending on the culture of the credit union and the community in which it resides. For example, we visited one credit union that is situated in a strong farming community in a very rural location and is deeply steeped in a Christian- based religion and what we might call traditional values. The religious- based culture suffuses throughout the town, its people, and its local credit union. Basic beliefs in honesty, fairness, justice, hard work, family, and do unto others are the hallmarks of their existence. The members and the employees are part of this com-Although members are not all that knowledgeable a bout what munity and part of the culture credit unions are and how they differ from banks, they cerdriven by this simple philosophy tainly know who their credit union is and why they are l oyal. of life. It is not coincidental, then, that the credit union mirrors the image of the strong culture in which it is embedded. Here we found the strongest commitment by managers to the cooperative spirit and philosophy, all the way up and down the organizational chart. However, the cooperative spirit of the credit union and the traditional value base of this community s culture are very synergistic. It was here that we also found some of the strongest loyalty by members to their credit union, and the clearest image of who the credit union is to the members. The metaphors rang with farming animals, tools, and other farming icons. The credit union s name, Farm Bureau Credit Union, and its image are remarkably consistent and precise. When asked what would happen if the local part of the credit union s name were to be changed or removed, one long- term member reacted strongly. I think if they change anything it would be a big, big issue . . . because it has stood the test of time. They ve proven themselves for the last 50 years in terms of we have a good place to come put your money in . . . a good place to get money, if you need money. But it is not that simple. Even with such a strong image, times change, and for most of the other members at this same credit union, the name was not all that important. I guess I don t have an affinity to the name. I don t think it would matter that much. It is critical to note that this image and this loyalty come about as a result of the members experiences. All members wrote wonderful stories and talked specifically about their experiences and what it means to them to be a member of this credit union. I mean, all the tellers know me well. I bring my little kids in with me. The other day I was here and four tellers were bringing candy. It s just that some are like family. They have an annual meeting and they invite the families. It s so simple, and they give door prizes. Well, I mean, that s nice.

20

One time they had a magician . . . But, what I mean is, they re family- oriented. When this member says that they re family- oriented, he means that the credit union embraces and shares the same value system, and he feels connected to the credit union in a very personal way. Thus, at the local level, one way to build a brand image and brand loyalty and equity is through the experiences. Another method is to tap into loyalty that already exists. Members of single- sponsor credit unions also appear to be more attached to their credit union. They know that the members are also their coworkers and friends. They express higher levels of concern should the name change, they describe quite succinctly who the credit union is, and they are highly loyal. I d say that I feel loyalty to them as much as I do my employer. In essence, they see the credit union as part of their employer, possessing the same traits and why not? They are very closely connected. Thus, these members have a direct connection to the credit union that shares their employer s name. They understand a little more about how a credit union differs from a bank, although this understanding is mainly focused on the credit union being a fringe benefit for employees and mistakenly viewed as the credit union being owned by the employer instead of the members. This labeling of the credit union as a fringe benefit appears to immediately convey certain traits. For example, since it is a fringe benefit, employees conclude that it must cost the employer something and therefore must be an advantage to the employee. Most of this understanding and misunderstanding is due to the credit union sharing the name of the employer and thus being viewed as a fringe benefit. Of course, this loyalty depends on the level of loyalty to the employer. In our research we were not able to find a single- sponsor credit union where employees, and thus members, did not feel good about their employer and, thus, via a halo effect, feel good about their credit union. That is, if one likes his or her employer, he or she is likely to like the employer s credit union by mere association. It s a perk for the employees . . . It s a bank for [XYZ] employees. Some single- sponsor credit unions associated with employers that have a lesser reputation with employees would likely experience either a lesser effect or even possibly a negative effect on loyalty. Single-sponsor credit union members express a better awareness the cooperative spirit. of

I knew it [the rate] was going to be fair and also the rate wasn t as important to me as the place I really care about. I m giving my money to the right place. It s like when you buy stock in a company. Do you 21

believe in that company? Where is the money going? Is it doing good for society? Am I helping out people better? So, what is the common thread between single- sponsor credit unions and the credit union that is so deeply embedded in its local religious- based culture? Why are they so dramatically different in terms of members knowledge about credit unions and their loyalty to their credit union? In these two instances, members know and feel a direct connection between the credit union and themselves. For the single- sponsor credit unions, the credit union is who the member is in terms of his or her profession, who he or she works for a big part of one s life for most people. The image of the employer transfers to the image of the credit union, and the loyalty goes right along with it. For the tight- knit value- based community, the feeling is the same they all share the same Compared with multi- SEG and community- based credit fundamental beliefs about life, unions, there is no special connection; they basic ally serve the and they know that the credit community at large, just as banks do, so they must somehow union, because it is made up rely on other measures to make the connection. of people like themselves, shares those same fundamental values. They know themselves, so they know their credit union, because it is them. Their daily experiences with the credit union define and reinforce this image. Compared with multi- SEG and community- based credit unions, there is no special connection; they basically serve the community at large, just as banks do, so they must somehow rely on other measures to make the connection. That is, other than the more personal attention, it s all about the rates, products, and services a tougher position from which to compete in an increasingly more competitive marketplace. As one member of a large multi- SEG credit union that recently underwent a name change described it, I can t tell you what the new name of the credit union is. And, it s not important to me . . . because they [banks] change every five years. [Changing the name] isn t important. Business- wise, I m sure it was a good decision . . . For us, it s more like, They have a good rate, let s just take it. It was not difficult to derive and define brand sketches for singlesponsor and, what we might call, strong culturally defined credit unions. The voices were univocal and clear. For example, we dubbed the credit union deeply immersed in the local well- defined values- based culture the Abe Lincoln of credit unions (see Appendix 2). Its commitment to old- fashioned values and family and its small- town vibe all work together to give it a specific and unique character that resonates well with the community at large. Needless to say, yank this credit union out of its local community and put it where the 22

community values differ and it is less likely to be successful. On the other hand, change its name, and as long as it continues to reflect the deeply held values of the community and that commitment is well communicated, it likely will not suffer negative consequences from current members; it may even attract new members who may have felt left out due to the restrictive name. Summary There does not appear to be a strong brand image for credit unions in general. From our findings, any significant brand image associated with credit unions exists at the local individual credit union level. These brand images differ sharply depending on the individual characteristics of each credit union. Two themes emerge, however. The strength of the brand image and the resulting advantages seem to depend on how well defined and focused that image appears to the members. Our results demonstrate that this finely etched image can be facilitated via the transfer of an employer s image in the case of a single- sponsor credit union, or through a consistent reinforcing range of experiences that emphasize and articulate a deep sense of the community in which the credit union exists. A large multi- SEG or community- based credit union with a diffuse membership often results in a vague and imprecise image, if one exists at all. 23

The positioning of local credit union brands must tap into the values and characteristics of the cultures in which the credit union exists. Consumers have to be able to quickly grasp how this particular credit union is different from a bank, and even other credit unions in the area, and why this difference is important. From these differences, an individual credit union brand community can also emerge. CHAPTER 3 Recommendations for Credit Union Brand Management The positioning of local credit union brands must tap into the values and characteristics of the cultures in which the credit union exists. Consumers have to be able to quickly grasp how this particular credit union is different from a bank, and even other credit unions in the area, and why this difference is important. From these differences, an individual credit union brand community can also emerge. CHAPTER 3 Recommendations for Credit Union Brand Management

In theory, there is no difference between theory and practice. In practice, there is. So what can credit unions do? Is it possible to build a national brand and local brands simultaneously? Is it at all advantageous to do so? In this section we provide a short introduction to traditional brand-building strategies and then, from the results of this research, interweave these with established brand theory to develop a set of recommendations. Traditional Brand-Building Strategies Creating differences is what branding is all about. The heart and soul of a successful brand rests on the positioning of the brand in a unique space in consumers minds. The brand s position is the result of creating differences. We defined a brand as the consumer s set of mental associations that add to the perceived value of a product. Another way of looking at it is that each brand known to the consumer occupies a (hopefully) unique position in the multidimensional brandscape in consumers minds. Thus, clear positioning of a brand is critical to building brand image, and clear positioning requires meaningful, compelling, and valued differences. Of course, the point of building a unique and powerful brand image is to create brand equity. Brand equity is the differential effect that brand knowledge has on consumer response to the marketing of that brand (Keller 2008, 48). Thus, if consumers do not see and value the differences, then there is no brand equity. Consumers acquire knowledge about the differences associated with the brand via the firm s marketing activities, in which information about the brand is communicated to the consumer and as a result of consumers 26 2626

experiences or interactions with the brand. Thus, in order for brand equity to exist: Firms must communicate knowledge about their brands to consumers through their marketing activities and consumer experiences focusing on the differences. This knowledge must result in consumers feeling, seeing, hearing, and learning about the uniqueness of this brand versus other brands. Consumers must value these differences. A first step in building brand image, and thus brand equity, is to create brand awareness. Obviously, a consumer cannot prefer a brand unless he or she knows it exists. Usually brand awareness is created through marketing activities such as advertising, promotion, signage, sponsorships, publicity, and public relations. During our interviews with managers, a great deal of evidence surfaced, demonstrating that all of these credit unions are heavily involved in these types of marketing activities. Thus, the more that consumers are exposed to the brand, the more familiar they will become with the brand. However, brand awareness alone simply means that consumers know of the brand. It does not necessarily follow that consumers know what the brand means, what the brand means to them personally, and whether they prefer it. To be truly effective, this familiarity must have a simple positioning that consumers attach to the brand. This positioning consists of the differences consumers value as compared with other brands. For example, most consumers immediately know the positioning of 7-Up soda, Ivory soap, and Heinz ketchup: not a cola; pure (and therefore it floats); and thick, respectively. If a national brand is desirable, then a similar positioning response for consumers must occur when they hear or see credit union. Thus, the first step is to determine what differences consumers desire this requires research. The primary question is, What is it that consumers want but are not getting from the current panoply of brands available to them? Once these characteristics are determined, the usual next step is to design a product or service that delivers these benefits and position it accordingly. The communications regarding these different benefits are then designed, and the new product is cleverly positioned in these messages such that consumers find it easy to understand exactly who the brand is and why they should value it over other brands. 27

This positioning of the brand focusing on differences is absolutely critical. For the positioning to be effective, four criteria must be satisfied. First, consumers must find the focal differences relevant to them. That is, consumers may completely see and understand the differences, but do they care? Second, these differences must be unique and distinctive. If the differences are already available with alternatives, then these differences will not be compelling to consumers at best, the product will be viewed as a me too product; at worst, consumers will simply categorize the entire product market as a commodity. Third, the consumer must value these differences and see them as superior in some way. Fourth, the differences must be believable. This may sound obvious, but many brands have failed because consumers simply did not believe the claims. Possibly the most egregious examples are the products that promised to do it all or tried to be all things to all people. A National Credit Union Brand? From our research, we take the position here that a national credit union brand might be beneficial, but only in an indirect manner. Although our participants do not recognize any national credit union brand in any specific sense, they sense that credit unions are somehow special. Again, although they were generally unable to articulate specifically how credit unions are special, they sense that they are. We think that these feelings provide a base upon which a national credit union brand can be built. From our research, we take the position here that a national credit The point of building a national union brand might be beneficial, but only in an indirect manner. credit union brand would be to assist individual credit unions in building their brands. That is, ABC Credit Union would benefit because members, and potential members, would attach value to ABC being a credit union. A national credit union brand on its own has little value since it must be cashed out through every large, small, single- sponsor, multi- SEG, or community- chartered credit union in the nation. Thus, several advantages could result from a strong national credit union brand image that would benefit every credit union: Widespread recognition of credit unions as a unique group of financial institutions. A better understanding of what credit unions are and how they are different. A sense of greater size and impact for members, being a part of something bigger. Greater loyalty to all credit unions. Signal of quality and level of service. Consistent national message reinforcing brand positioning. 28

However, this national branding may also invoke certain disadvantages. For example, members do not always view the not- for-profit status of credit unions as beneficial. Often, members interpret this nonprofit status as a signal that credit unions can t compete with banks that they are somehow inferior. On the other hand, many members value that their credit union is small, local, and personal. If not carefully designed and implemented, a national credit union brand could contradict or undermine that image of small, local, and personal. Nonetheless, we feel that a national credit union brand could deliver these advantages while minimizing the impact of any disadvantages. The key to this process will be finding a highly valued, truly meaningful, but simple articulation of the primary set of different benefits credit unions offer to consumers. This research was initially focused on local credit union brands and primarily centered on trying to gain an understanding of any brand image that might exist as credit unions expand their membership base. That is, this research was originally motivated by the situation where a credit union moved from single sponsor to multi- SEG or community chartered, which was often accompanied by a name change. Thus, the original research question was, What impact, if BRAND AWARENESS VS. BRAND EQUITY It is important to note the differences between brand awareness and brand equity. Brand awareness is a much lower hurdle and conveys far fewer benefits than brand equity. Brand awareness is the level at which a consumer can identify the brand under different circumstances. For example, one might test brand awareness by asking consumers to name as many brands as they can think of in a product category (recall test). This is a stronger test than simply providing a list of brands and asking consumers to identify those they recognize (recognition test). Thus, brand awareness can be thought of as the strength of the brand in the memory structure of the consumer. Notice that brand awareness does not have any affective component. A consumer might have a high degree of brand awareness for a brand that is disliked. Also, although brand awareness is necessary to build brand equity, it is only one component of brand equity. Brand equity goes beyond mere awareness in that the consumer holds some strong, favorable, and unique beliefs about the brand that consistently convey a preference for that brand. Simply being aware of a brand is a far cry from believing in, and consistently preferring, a brand.

29

any, does the name change have on the brand and its meaning to members? As we attempted to address this research topic, however, the design evolved as other issues and situations presented themselves. Our results are quite clear. The credit union brand consists of two distinct components: the term credit union, which reflects a national designation common to all credit unions, and the local name of the credit union, which is unique to that credit union. All members we interviewed recognized and discussed this separation. Apparently, a credit union by any other name is not a credit union. This is very much akin to what is commonly referred to as family branding. For example, Kellogg s has its family brand Kellogg s on every box of cereal, but it also has individual brand names associated with each product or product line, such as Rice Krispies or Special K. Our results also make it clear that for most credit union members, there is no equity in the credit union brand, nor do the members know what it means. They recognize it and have some affinity toward it, but they do not express any specific image associated with it. The only exception we noted is members who have been part of the same credit union for many years, often being a founding member, but even then the image was blurry and diffuse. Moreover, this base of members is dwindling and does not offer a sound foundation for the future. While our original focus here was not on the national credit union brand, its role emerged quite naturally as part of our discussions with members and management. So, while we cannot speak definitively on the national credit union brand since it is beyond the original scope of this research, we can still offer some basic suggestions based on our findings. Our results are quite clear. The credit union brand consists of two distinct com ponents: the term credit union, which reflects a national designation common to all credit unions, a nd the local name of the credit union, which is unique to that credit union. In 1999, CUNA published The National Credit Union Brand Strategy, which is based on a significant amount of research, primarily consisting of that from focus groups. Almost 10 years later, our research results are consistent with those from CUNA. However, our interviews allowed us to dig much deeper into understanding members relationships with their credit union and what the credit union means to them. In fact, even earlier research found similar results. In this document, CUNA cites research performed by Luntz Research 30

companies and Global Strategy Group, Inc., conducted in 1997. It quotes the following conclusion: Perhaps the single greatest challenge facing credit unions is their lack of familiarity among a relatively large segment of the American population. Fully 38% of all adults cannot offer an opinion (either favorable or unfavorable) of credit unions and one- quarter (27%) are not at all familiar with credit unions. By comparison, only 7% have no opinion about banks. This difference is significant, and only a significant nationwide public relations effort will shrink this awareness gap. (7) Thus, it should come as no surprise that the credit union brand simply does not exist in any real sense for much of the American population. The surprise is that our research demonstrates that it doesn t even exist for credit union members. This CUNA report also goes on to proffer a national branding strategy complete with a logo, tagline, and suggested tactics. How aggressively and universally this branding campaign was implemented is not known by this researcher. Nonetheless, almost 10 years later, our results show that a credit union brand is not recognized by members interviewed in this study, much less the population at large. Why the 1999 national branding campaign did not make the credit union a well- known brand, even to credit union members, is a question unanswered by this research. So, what can be done? What will it take to make consumers aware of the credit union brand and what it stands for? Our results show that most members think of and categorize credit unions as banks. Thus, credit unions are viewed as one option in a commodity market of banking services. We could find little indication of any sense of specific differentiation between credit unions and other financial institutions, particularly banks. Thus, we might look at two highly successful examples of how commodities were transformed into highly valued and sought- after brands and borrow from them. Outside Industry Examples Up until Chiquita started putting stickers on its bananas and advertising heavily, bananas were commodities. Shoppers did not know which banana came from where or who produced which ones. A banana was a banana; thus, banana growers had to simply accept whatever price the market provided. In a brilliant move, Chiquita branded bananas by putting little stickers on them and touting how its bananas were different and why they were superior. In little time, a brand image (due in part to the Chiquita Banana Lady) was built and consumers became so loyal to the Chiquita brand that Chiquita bananas commanded a price premium over other bananas. Consumers now had a choice: Pay a higher price for higher quality 31

(at least perceived as a higher- quality banana), or pay less for any old banana a great positioning and branding strategy. Similarly, most coffee drinkers (and even many who don t drink coffee) know who Juan Valdez is, but until the National Federation of Coffee Growers of Colombia invented him and the tagline 100% Colombian Coffee to brand the origin of coffee (recall that Juan Valdez on a package of coffee assures the buyer that it is 100% Colombian coffee), consumers shopped only by the manufacturer s brand, such as Maxwell House or Folgers. Although many still rely on manufacturer s brands, shoppers now are also loyal to 100% Colombian coffee from those brands. In fact, some shoppers will switch manufacturer s brand rather than switch away from 100% Colombian coffee. Just as the 100% Colombian brand coexists and supports manufacturers brands, we believe that credit unions can exploit a strong national brand image, but it must coexist, support, and reinforce local credit union brand images. For example, a McDonald s approach, where there would be no differentiation among credit unions, would simply not work. Our findings show that each credit union is different and individualized to its local community, its sponsor, or its SEGs. In fact, we noticed that credit unions seem to be more different than similar. Thus, we make the following recommendations for developing a compelling national brand for credit unions. National Branding Strategies 1. Start with the Appropriate Research Research needs to be conducted to find out what consumers want from financial institutions but feel they are not getting. Although we gain some insight from this research, more specifically tailored research that can be generalized is necessary. This research would focus more on people who are not and have not been credit union members. Some might argue that the differences between credit unions and banks are already set in stone; in fact, they arise from differences in the philosophy, organizational structure, and legal entity. While it is tempting to fall back on these long- standing unique characteristics, such as member- owned/cooperative structure, not- for-profit, more personal, friendlier, and so forth, it is still necessary to find out whether consumers want these attributes and if they value them. If not, then it would be foolish to try to position a national credit union brand around any of them. Our interviews were sprinkled with comments that hinted that members often view credit unions as not as professional or capable as banks, seemingly suggested by the not- for-profit label. This research would need to consist of both qualitative and quantitative elements. A larger set of interviews, similar to those conducted in this study, but extended to include both members and non- members 32

and more focused on what consumers want from their financial institutions but are not getting, would be instructive. This research can provide the depth necessary to understand consumers preferences and needs. These results can also be used to design a quantitative study that can confirm the insights gained from the qualitative study on a national basis. While it is tempting to fall back on these long- standing unique characteristics , such as member- owned/cooperative structure, not- for-profit, more personal, friendlier, and so forth, it is still necessary to find out whether consumers want these attributes and if they value them. This research should culminate in the expression of several potential positioning strategies for the national credit union brand. Additional research will be necessary to identify the most powerful positioning strategy and then design a marketing campaign to aggressively implement it. This process typically necessitates the use of consumer research as designs evolve and must be repeatedly tested. 2. Tap into Values, Not Functionality Consistent across all the interviews conducted during this research project is that members were the most attached and the most loyal when they felt that the credit union shared and reflected some value important to them. When considered carefully, this makes sense. Often, the financial lives of people are the most personal and the most important. It makes sense, then, that one might feel more connected to a financial institution when the connection is based on something deeper than hours of operation. Of course, credit unions need to be competitive with the functional benefits, but if one is looking for a deeper connection, functional benefits are unlikely to deliver. In fact, from our interviews, functional benefits did not seem to hold sway, unless the credit union was deficit in some way. Thus, the functional benefits (convenience, hours, free checking, etc.) were assumed to be competitive, and only when they were significantly lacking did members focus on these benefits. We must also bear in mind that functional benefits are easily copied and therefore do not represent an opportunity to gain a sustainable competitive advantage. However, connecting with members at the values level is very difficult to copy in the short term and could be a sustainable competitive advantage. Even when the functional benefits were at a disadvantage for credit unions, if a value connection was present, it mitigated any strong negative effects. Note that the value must not just be shared or reflected by the credit union, but it must be a value that is important to the members. Most of the values we observed are connected at the local level and varied from credit union to credit union as each local 33

credit union took on the patina of the members and the community it serves. However, certain fundamental values should cut across all credit unions, and research can tease them out. For example, one shared value expressed in the interviews was that the credit union keeps all money local. These members greatly value helping people who live right in their community, rather than strangers from another community.4 Some of the shared values mentioned by members were important enough that they were the primary reason for the person to remain a member. Some of these values include: Localness: All the money stays local, helping the community in which I live. Honesty and integrity: No scandals, no investigations, honest people, trusted. Frugality: They do business like I would do business prudently, conservatively, frugally. Family: The credit union operates like a family and is like a part of my family. Often, the financial lives of people are the most personal and the most importan t. It makes sense, then, that one might feel more connected to a financial institution when the con nection is based on something deeper than hours of operation. From a manager s perspective it might seem beneficial if consumers highly valued the cooperative nature of the credit union organization and that they are not- for-profit organizations, but we found little evidence that they do. In fact, some members reacted negatively when learning that their credit union was a not- for-profit organization. Certainly, this is an empirical question that can be answered with quantitative research. There is the possibility that with a very intense campaign some consumers can be educated to the advantages of a cooperative structure and a not- for-profit standing, but this goal has been elusive for many years and nothing in this study suggests that anything has changed. The key point, however, is that while members do not appear to value the fact that credit unions are not- for-profit cooperati ve organizations, they do value the benefits that are driven by the cooperative not- for-profit foundation of credit unions, namely, personalization , family atmosphere, localness, integrity, and prudence. Thus, it would seem that an appropriate process would proceed as outlined above. Do the right research, develop and position the For discussion on this approach, please see Stuart Hart and Monica Tousenard, In tegrating Sustainability into Credit Union Strategy (Madison, WI: Filene Research Institute, 2008). 34

brand identity, and try to connect it to values that are motivating to a targeted group of consumers. 3. Focus on Building a National Credit Union Brand Community Instead of Just a Brand From our research results, it is clear that a brand identity can be constructed that will differentiate credit unions from other financial institutions in a way that is simple, meaningful, and valued by consumers, but additional research is needed. Our goal in this research was to examine if credit union brands exist, and then determine the meaning of those brands for individual credit unions. We have argued that a particularly promising approach is to focus on values. At the national level, this brand identity has to be a value that is common across all credit unions but still differentiates credit unions from other financial institutions (i.e., banks). This brand identity could focus on a single element or, at most, two elements. Part of building a brand identity is the development of a value proposition. A value proposition answers the question, What functional, emotional, and symbolic benefits do members get above and beyond other financial institutions? This brand identity should not be based on what credit unions currently do well, unless it happens to match what consumers want from their credit union. However, as our results demonstrate, and if prior national branding attempts are indicative, a credit union national brand may be difficult to achieve and may not provide any concrete advantages. Another important part of this process is positioning the brand. Consumers have to be able to quickly grasp how credit unions are different and why those differences are valuable. How are Apple products different from all other brands? They are easier and more fun to use. This positioning is simple and very compelling. As a result, people who own Apple products feel different as a person than if they owned any other brand. Because Apple products are creative, less serious, and more whimsical, owners feel that they too are less serious and more creative T-shirt and sandals versus suit and tie, so to speak. From these differences, a very powerful marketing tool a brand community can emerge. A brand community is a specialized, non- geographically bound community, based on a structured set of social relations among admirers of a brand (Muniz and O Guinn 2001, 412). Apple has one of the strongest. Owners of Apple products feel as though they belong to a special group of people who share special characteristics characteristics they feel are important to who they are. Local Apple users groups number in the hundreds and share the Apple philosophy and subculture in their meetings and communications regularly. Every marketing activity in which Apple engages highlights and 35

reinforces this brand community, from supporting local user groups to the design and navigation of its Web site, product design, advertising, distribution (where one can buy Apple products), pricing, and so forth. Can credit unions build a national brand community? We think so. We sensed a specialness in some of the members comments when they wrote stories about their credit union. This specialness could be exploited to build a credit union brand community. That is, if the brand community was designed and implemented correctly, consumers would feel that by joining a credit union they are somehow special and different from people who use banks. Members mentioned several ways they thought their credit union was special; we think some of them hold promise as positioning elements: Being an anti- bank; not part of the corporate- owned financial markets and systems; can t be bought, can t be sold. Being 100% local, guaranteed keeping all money local; helping you, your friends, your family, and your neighbors. Investing in people, not corporations. Ethics honesty and integrity. These should look quite familiar since they are based on the values previously listed as those expressed by members. Of course, research designed specifically to tease out the possible bases for this differentiation, or specialness, and market testing to determine their potential impact would be needed. Nonetheless, the point here is important: Focusing on building a brand community may be more successful than focusing solely on building a brand. Building Local Brands for Multi- SEG and Community-Chartered Credit Unions Of the six credit unions included in this research, we were able to interpret a brand image for two of them, which also demonstrated significant levels of brand loyalty and brand equity. Both credit unions share a strong bond with their members. In one instance, the bond was the result of the credit union having a single sponsor. In fact, it appears that single- sponsor credit unions have little trouble with brand identity since the identity of the sponsor virtually defines the credit union from day one. Thus, we have little to say regarding recommendations for single- sponsor credit unions. Our results are also instructive for multi- SEG and communitychartered credit unions. When a strong brand image was observed, it was in the context of a strong and meaningful connection between the members and the credit union. For example, we have already 36

discussed the strong bond we observed as a result of the credit union sharing a set of values that are prominent in the subculture of the community it serves. In fact, not only do credit unions share these values, they espouse them. These findings are very consistent with the literature on branding. Because of the deep connections between the credit union and its members, a brand community has emerged. The credit union acts as another community- based organization that facilitates the lifestyles and values important to its members. Thus, credit union members feel special to be a part of this credit union. Being a member of this credit union is part of the person s identity. It tells other people who this person is and expresses him or her to others. It says, I m a person who believes in honesty, ethics, traditional values, family, and frugality. People who go to the local banks are considered a quite different species. Many members interviewed had a difficult time conjuring up an image of their credit union. Many times, members could not give the reason why they joined the credit union. For those who could recall the reason, it was quite serendipitous. One member joined because he got a flyer at work and was in need of a car loan at the same time; another indicated that she was shopping with a friend who had to stop at the credit union, so she joined while she was there; one member said that he joined because he saw the credit union s sign one day while he was driving down the road, and he stopped in.5 Even when members had difficulty expressing who the credit union is, they still mainly focused on the fact that it is the personalized service that matters to them. In one sense, we are back to the notion that even when a credit union does not have a brand image clearly defined in the minds of its members, members still point to and value the more personalized service. Our recommendations for building local credit unions brands follow. They build on and are synergistic with our recommendations for a national credit union brand. 1. Strategically Position Your Brand. It is just as important for local credit unions to carefully position themselves to develop a brand as it is for a national credit union brand. Several questions must be answered: Who are you? That is, what is your current brand image? Who should you be, according to the values and benefits desired by your target market? What must you do to get there? The drive-by approach to joining credit unions is becoming more common. Please see George Hofheimer, Who s Joining Credit Unions? (Madison, WI: Filene Research Institute, 2008). 37

The first question can be answered by developing a brand sketch (see Appendix 2 for an example) or a more fully developed brand personality. This knowledge is necessary in order to move forward. If a credit union does not know who it is now in the minds of consumers (both members and non- members), how will it know how to change? The second question can also be answered with the same research as illustrated in this project. The last question can be answered only through careful analysis and the development of a branding strategic plan. Often forgotten as part of this process are feelings. What feelings do you want members to have when they think of your credit union? These feelings can be translated into part of the positioning strategy. Our results suggest that any positioning should capitalize on the cultural characteristics of the community (or communities) the credit union serves. For example, we observed special cultural characteristics of a geographically defined community, but we also observed definitive cultural characteristics of an employment community. Thus, the basis for, or definition of, the cultural community targeted is not restricted to geography; it may be based on the main characteristics of the employer, the primary types or categories of jobs held by members (e.g., teachers, researchers), the primary activity associated with members, an ethnic association, or even a way of life or lifestyle valued. Note that we again suggest that values may be a particularly rewarding approach to establishing a clear position for a credit union brand. These values present an opportunity to tap into the identity of your members. That is, the values must connect directly to the members identities. A credit union might ask, What does being a member of our credit union say about the person? What do we want it to say? Will it be valued by the members? Thus, being a member of a credit union becomes so much more than just getting lower rates, or having convenience, or getting more personal service. Being a member of a particular credit union says something about who the member is, what she stands for, her role in the community and the world. It is about her, not the credit union. It is part of her identity. It is who she is, and it is important to her. 2. Don t Obsess over the Actual Name. The Name Isn t a Brand until You ve Branded It. The actual name of the credit union does not seem to be particularly important. Members often don t care about the name, and in cases where the name was changed, some did not even know the name months after it had changed. In fact, we found that actual names are mostly irrelevant. We did observe, however, that just as with any brand, changing a long- standing name can be unsettling for 38

long- term members. To wit, many loyal consumers would recoil at the prospect of Procter & Gamble changing the name of Tide detergent. Nonetheless, the fact that the product s name is Tide means little on its own. What do tides have to do with cleaning clothes? The actual image associated with the name is created through the marketing activities and the experiences consumers have with the brand. The meaning of Tide is certainly now connected to its name, and that is how one can invoke the meaning. But if the marketing activities and consumers experiences were exactly the same, almost any name would have yielded the same result. To reiterate, ABC credit union by any other name still behaves like ABC credit union. With the appropriate strategy and implementation, the name need only not invoke negative connotations. That said, some names offer instant imagery (e.g., single- sponsor credit unions elicit images and impressions associated with the employer), and some can be more or less helpful in this process. For example, a good credit union name can hint at or suggest the primary positioning of the brand or even reinforce the positioning and image with each exposure. And that can surely be advantageous. Selecting a name that resonates with the image and positioning can stimulate certain imagery, feelings, and even provide signals about the positioning. Such a name is not mandatory for making a name a valued brand it s just helpful. More importantly, just as we recommended for the national brand, one must build brand awareness, aggressively communicate a strong and compelling brand image and positioning, and create a sense of brand community (which we will discuss in more detail shortly). 3. Enact the Brand. A brand is made, not born. A brand is what a firm makes it. A brand doesn t exist out there somewhere, waiting to be uncovered. A brand exists only because someone or some people at some point in time decided that it would exist, and then went about enacting it. Furthermore, it exists only in the mind. To enact a brand, there has to be deep belief, conviction, willingness to take a risk, commitment, and hard work. To quote Popeye, It ams what it ams and that s all that it ams. The greatest branding strategy can fall flat on its face if the people executing it do not believe in the brand. People are always in a process of making sense of everything around them. Karl Weick (1995) developed the theory of sensemaking to capture this process and its impact on organizations. In this context, we are more concerned about how consumers go about making sense of their worlds, particularly as they relate to their financial affairs. Consumers try to make sense of what different financial institutions offer in terms of benefits and how these benefits relate to them. The 39

simpler it is to make sense, the more inclined consumers may be to engage in that option. Brands offer an efficient shortcut for making sense of a complicated array of choices and benefits. Brands allow consumers to be more efficient in their shopping process since each brand represents a known positioning in the minds of consumers; thus, the choice task is simplified. Since brands are basically conjured up by managers, the managers essentially enact a brand. Enactment is the recognition that when people act, they bring concepts, structures, and events into existence and set them in action (Weick 1988). It is a part of sensemaking and allows us to enact a simpler concept of any aspect of the world around us. For example, to make some sense of the stars above, constellations were enacted. There is no big dipper; someone arbitrarily connected some of the stars together to resemble a known object. Thus, credit unions must enact their brand by enacting connections. This enactment of connections with the members of the communities they serve is part of building the brand community. 4. Build a Local Credit Union Brand Community. Just as in the analysis for a national credit union brand, our research leads us to believe that focusing on building a brand community may be a more effective process than simply focusing on only the brand itself. We won t repeat the information provided previously regarding building a brand community, but there are some differences in building a national brand community versus a local brand community. Our research results suggest that positioning a local credit union brand based on the cultural aspects of the community it serves, possibly focusing on cultural values, may be a particularly fruitful approach. Each credit union s brand identity should focus on one or two elements. The functional, emotional, and symbolic benefits members get above and beyond other financial institutions define the value proposition that is a part of the positioning of the brand. Each brand identity should not focus on what credit unions already do well (e.g., we are more personal), unless it happens to match consumers desires. The positioning of local credit union brands must tap into the values and characteristics of the cultures in which the credit union exists. Consumers have to be able to quickly grasp how this particular credit union is different from a bank, and even the other credit unions in the area, and why this difference is important to them. From these differences an individual credit union brand community can also emerge. Consumers who become members now feel that they belong to a special group of people who are different in an important and unique way. We listed the possible key positioning differences in our 40

discussion on a national credit union brand community, and all these apply here as well (e.g., anti- bank, 100% local, invest in people, honesty, and integrity). However, local credit unions must also differentiate themselves from other credit unions, and while possibly being 100% local might work, most of the other differences apply to all credit unions. Thus, a fine- tuning of the positioning must be made to differentiate one credit union from its competitors. For example, if a credit union that focuses on teachers and a credit union that has a community charter compete in the same locality, each needs to be able to position itself such that consumers clearly see the differences between them in terms of relevant and meaningful benefits. Even so, the brand communities may overlap and that is fine, particularly if that overlap focuses mainly on the broader credit union brand community. Conclusion Brands are often positioned with or against competing brands. For example, when Mazda introduced its first compact size sedan (the 626) in the United States, its ads showed the 626 along with the Honda Accord. One goal of this ad was to get consumers to associate the 626 with the Accord by placing them both in the same category in their minds that is, positioning with the competition. On the other hand, 7-Up is consistently positioned away from the competition by being called the un- cola and by emphasizing how different it is from Coke and Pepsi. For years now, it seems that credit unions have placed themselves more and more in the bank brandscape, and our research supports this conclusion. What a pity that credit union members think that credit unions are just another bank. But when you look at credit unions, what is there about them that signals to consumers that they are not banks? The buildings are often designed to look exactly like a bank. Consumers conduct their financial affairs in a similar manner. Often even the advertising shouts bank! These signals do not go unnoticed by consumers. And, it appears that some credit union management may have felt that credit unions as financial institutions didn t get the same respect as banks in the past; thus a natural reaction would be to try to make credit unions more like banks to attain the same status. Unfortunately, an essential positioning tool has been lost if this perception cannot be changed. On the basis of this research, it seems that positioning against the competition offers the most viable means of positioning for credit unions and there is little to lose in doing so. Consumers must feel that they have a clear choice between banks and credit unions. They need to feel that joining a credit union is vastly different from opening a checking account with a bank. This 41

process starts with understanding what consumers want from a credit union that they currently are not getting anywhere else, even from their own credit union. By focusing on building a national credit union branding community that centers on a compelling positioning that is simple, personally relevant, and meaningful to consumers, and then allowing each individual credit union to develop its own unique positioning based on the value connections to the communities it serves, a powerful brand and choice for consumers can emerge. The alternative is to continue to become more like banks until all distinctions are erased. 42

Appendix 1 Appendix 1 Methodology The meaning of a brand exists in the mind of the consumer. This multidimensional brandscape in the minds of consumers can be tapped by several qualitative methods. Qualitative methods are better in this instance because we seek meaning. While quantitative approaches can assist in confirming or denying preconceived notions, they do not allow us to probe deep into the minds of consumers to allow meaning to surface. Similar to Norvaisas (2007), who used an ethnographic approach to examine members behaviors in order to determine why people choose a credit union, we also rely on qualitative methods in this report to examine the meaning of the credit union brand to members. A common method to explore deeper meanings is through the use of narratives (e.g., Fournier 1998; Giddens 1991; Schouten 1991; Thompson and Tambyah 1999). Narratives are evidence of consumers individual and social experiences. The approach of narratives based on personal stories is generally regarded as more appropriate for explaining and constructing personal experiences, particularly stories one might be sensitive about and would prefer to remain private. Widdershoven (1994, 2) suggests that the meaning of life cannot be determined outside of the stories told about it. Unstructured depth interviews were conducted in typical phenomenological interviewing fashion over a period of two years. Participants stories were allowed to unfold in a natural way with the opening remark, Tell us a little about yourself. Follow- up probes were then employed to get more details about those experiences. All interviews were tape- recorded and transcribed verbatim. A second approach to capture these narratives relied on the participants writing stories about a specific credit union experience. This task was presented to them at the end of the interview process, and they mailed it in at their leisure. Individual in- depth phenomenological interviews are preferred here over group interviews (e.g., focus groups) for two reasons: (1) members may be more reticent to allow the true essence of their relationship to emerge in a group conversation and (2) the bandwagon effect, where some members in a group discussion simply acquiesce rather than advocate for an alternate position, may be minimized. Moreover, it is likely that a group discussion will stay at a more superficial level and not allow deep probing of personal meaning of the brand name. Additionally, the relationship between a member 43

and his or her credit union is typically a private one, not appropriate for group discussion. All individuals who were interviewed are referred to as participants since the interview process is more of a conversation. Participants were mainly credit union members but did include management. An appropriate research perspective and method should facilitate the participants reconstruction of their experiences with the credit union and the brand. Thus, the first part of each interview began with an unstructured in- depth interview conducted in a relaxed environment, allowing feelings to surface and therefore providing participants time for recollection and reconstruction of their experiences, encouraging deep reflection, and reducing the social risks of baring one s soul (Kvale 1983). Since the description of these experiences as they were naturally lived is embedded in a social context, the description is rich and illustrative (Thompson, Locander, and Pollio 1989; Valle and King 1978). The goal here is to use empathetic immersement to put the researcher as close as possible to the lived world of the participant. It is important that this unstructured component of the interview be conducted first since it allows the participants to tell their stories and talk about their experiences in their own way without any priming or suggestions by the researcher. In the first phase of each interview, we probed how members think and feel about their credit union. More generally, the essential nature and characteristics of the relationship between members and their credit union were captured. We explored brand equity in the context of what it means to be a member of a credit union and how this relationship differs from relationships with other financial institutions. We asked participants to tell us about themselves and then proceeded to ask if they would just tell us anything that comes to mind about their experiences with this credit union. The rest of the interview proceeded as a conversation as we let the participants speak and tell their stories with as little intervention as possible. All interviews were then transcribed verbatim. A hermeneutical analysis of the verbatim texts involved deep immersion into the life- world of the participants via the transcripts. A holistic understanding of each participant was first developed, identifying the essential meanings and the interrelationships among those meanings, and allowing individualistic themes to emerge (Hirschman 1992; Holt 1998; Thompson and Hirschman 1995). We then moved on to more global interpretations grounded in the complete set of transcripts across all participants. The relationships among themes were examined, and new global themes were developed. We moved back and forth between individual transcripts, tapes, individual themes, and global themes as we grasped the essence of the meanings of these experiences, relating parts to the whole 44

(Thompson, Locander, and Pollio 1989, 141). Final themes emerged that expressed the meaning of the credit union in members everyday lives. Once the unstructured portion of the interview concluded (determined by interviewees becoming repetitive and revealing little new information), a more structured interview commenced. In this portion of the interview, participants were all asked identical questions from a prepared list based on previous methods of studying brands. This phase of the interview utilized structured interview techniques to more definitively identify brand identity and qualitatively measure brand equity. Specifically, free association, metaphorical techniques, and projective techniques were employed to capture qualitative insights into the meaning of credit union brand names. The Interview Process The interviews were conducted to answer five questions: 1. Do individual credit unions have their own brand identity? 2. If so, what is that identity? 3. Is the brand identity tied to the credit union s name? 4. Does the term credit union in a name have its own significance and meaning in the context of a brand identity? 5. What does the name credit union mean to members? Most interviews were conducted in a credit union office that was rearranged to provide a casual and informal atmosphere; some were conducted in the homes of participants. Although an office is not an ideal location, it was not possible to conduct all interviews at participants homes. For many participants, the researcher was a stranger from outside the area, and the credit union provided a neutral territory for the interview. All interviews were tape- recorded and transcribed verbatim. For most of the interview, notes were not taken, to avoid distracting the participants as they narrated their experiences. Participants were told that the interviewer(s) was trying to understand what credit unions mean to members. The interviews began with the unstructured portion, in which the interviewer asked the grand tour question, Tell us a little about yourself. The next question asked the participant to tell about their experiences with this credit union. Thus, the participant s story was allowed to unfold naturally, without direction or guidance by the researcher. Follow- up probes pushed deeper into the relationship between the member and his or her credit union. The goal was to develop a thick description of what it means to be a credit union member. These unstructured phenomenological interviews allowed us to better understand the deeper and personal meaning of the credit union. Through this 45

phenomenological approach we acknowledge that the participants feelings, emotions, and other less cognitive elements of living are important components of the experiences with the brand, and the organization. These experiences and meanings, often rarely recollected, are tucked deep within members minds. Moreover, the meaning of a credit union to its members exists in a socially defined cultural context of religion, community, family, work, and play. A kaleidoscope of influences works in harmony to make the meaning of a member s credit union specific to that member as well as general to the entire group of membership and even the community. At some point in the interview it became obvious that the participant exhausted anything he or she could tell us without more direct questions. One telltale sign was repetition. Once the participant began to repeat earlier statements, the fruitfulness of this portion of the interview was likely diminished. We then moved on to the more structured part of the interview. This part of the interview began with several free- association questions (Hutchinson 1983; Levy 1985). We asked, What comes to mind when you think of [credit union full name]? and then, What does the [credit union full name] name mean to you? The primary purpose was to identify the range of possible brand associations in the minds of current members. We then separated the credit union name into the basic two components (the specific name and credit union ) and inquired as to the meaning each component held for the participant and what the effect would be if it were changed or removed. For example, if the name of the credit union was XYZ Credit Union, we asked how they would respond if credit union were removed from the name. We followed up by asking how they would feel if XYZ was changed. This approach allowed us to tease out the differential meanings and impacts of different components of the name. We followed the free- association test with a metaphorical approach (Zaltman and Higie 1995). We first asked participants, If [credit union full name] was a car, what car would it be? Then we asked similar questions for a fabric, an animal, and a magazine. These questions helped us capture the personality of the brand name and even some of the underlying values attributed to it. Finally we used a projective technique by asking participants to describe in detail who would be the typical or average member of this credit union. At the close of the interview we gave each member an assignment to be completed within a week of the interview, and provided a stamped, self- addressed envelope. This assignment included portions of the Zaltman Metaphor Elicitation Technique (ZMET) (Zaltman and Higie 1995) as well as other unique components. Members 46

were asked to write a story about a particular experience with their credit union and include such elements as who was with them, their age, the location of the credit union, strongest feeling, and so forth. They were also asked to title the story. This method was recently used to examine how consumers coproduce brand meanings by asking respondents to write stories recalling childhood memories about a brand (Braun-LaTour, LaTour, and Zinkhan 2007). We further probed the meaning of their credit union using a projective technique as part of this assignment. Specifically, members were asked, If [credit union name] could talk, what would it say about this experience? Of the 16 interviews conducted with members, 10 members returned these requests fully completed. The Participants Because this study focuses on qualitative insights into the issue of credit union brand names and brand identities, no attempt was made to use a large number of credit unions, management, or members, nor was any quantitative attempt made to control for other influences (in fact, we encouraged them). The value of this study lies instead in the insights gained into members relationships with their credit union and the role of the credit union name (i.e., brand identity) at a meaningful level. This study allows us to describe and characterize the nature of the specific brand identities associated with different credit union name brands, and it also provides some qualitative assessment of the equity held for each brand name. Although all credit unions are viable as participants since we are focusing on the relationships between members and their credit union, the research was best served by purposive sampling. That is, we selected credit unions and members to be as maximally different as possible. For example, we included a range of credit unions that offered exemplars, or anchors at possible extremes of relevant dimensions. The credit unions selected included some that appear to have been successful in terms of customer relations, loyalty, and the like, and others that may not appear to have been so successful. We also included single- sponsor, multiple- SEG, and community- chartered credit unions. Finally, a range in size of credit unions was purposively included. Participants were recruited through participating credit unions. Although we expected to conduct about 10 15 interviews with members only, we ended up also interviewing members of management to see how they saw their credit union and its brand identity. The exact number of interviews was determined by examining each subsequent interview in terms of its unique contribution. That is, once the interviewees became repetitive and offered few new insights, we stopped. The participants were selected to provide a range of 47

experiences, including longtime versus new members, active versus inactive members, and single- sponsor versus SEG and non- SEG members. The interviews cut across four credit unions. A total of 29 interviews were conducted. Sixteen interviews were with credit union members, and 13 were with management. Although generalization across age, social class, marital status, and so forth, is not a goal of this research, nor is it tenable given the methodologica l approach, the participants did cover a broad spectrum of demographics, including both male and female; a wide range of ages (an educated guess would be ages 20 to 75 we didn t ask); marital statuses such as single or married with various numbers of children at different ages; a wide range of occupations, from laborer to small business owners, college professors and doctors; and education from high school to advanced college degrees. Of course, all credit union management were employed at the credit union in some supervisory capacity, but at all credit unions we interviewed the CEO, a marketing manager, and at least one other senior management person. All member participants were currently employed outside the home or were retired. All participants had much to say about their credit union, good and bad. In this report, pseudonyms are used where needed, and certain information has been disguised to protect the identity of participants. Additionally, any reference to specific credit unions has been disguised. We also collected materials from the credit unions, including brochures, gifts (e.g., pens and magnets), and other material that we thought might help us better understand the credit union. We examined their Web sites and forms such as loan applications. For those credit unions that participated fully in the project, we provided a brand sketch. This written document provided each credit union with a summary snapshot of how we interpreted the members impressions of the credit union in the form of brand identity. Each brand sketch was unique to each credit union and varied considerably. All were held in strictest confidence. In this report, we present the results of this research as both an interpretation of the participants narratives, suggesting several key themes that emerged from the transcripts, and a description of whatever common themes we could derive in terms of brand identity. We then translate these themes into recommendations for credit union branding. 48

Appendix 2 Appendix 2 Elkhart County Farm Bureau Credit Union: The Abe Lincoln of Credit Unions The Elkhart County Farm Bureau Credit Union6 (aka Farm Bureau Credit Union and FBCU) as a brand can be described as the Abe Lincoln of credit unions. The phrase is carefully chosen to represent the main thrust along with three finer characteristics that participants communicated to us through their conversations. Each is discussed next as I build the brand sketch. Culturally Defined Possibly the most evident result of our interviews is the powerful cultural influence on FBCU. FBCU operates in what might be described as a fairly limited geographic subculture of America that greatly emphasizes and reflects traditional American values such as honesty, fairness, God, strong work ethic, respect, family, values, morality, kindness, friendliness, and honor. Participants mentioned these words and phrases as they described themselves, others, community, and FBCU. However, it is very clear that they don t just speak of these values they live them every day, deep in their hearts and souls. Needless to say, participants also described FBCU as possessing and exhibiting these same values. These values, which are primarily personal in nature, are transposed to FBCU, an organization, in what we call a halo effect. That is, FBCU as a brand reflects the same values as those of its members and its employees. Although recently it has become quite trite to say that an organization is only as good as its employees, FBCU is truly defined by the people who work there, certainly in part due to its performance but even more so by the culture it embraces. This strong subculture suffuses the everyday events that occur as FBCU members and employees interact with one another. This subculture also defines who FBCU is. Because the employees also generally embrace and are immersed in the same subculture, there is a commonality and special link between members and staff that supersedes most other banking relationships. As a result, the brand character of FBCU Shortly after the research study was completed, the Elkhart County Farm Bureau C redit Union changed its name to Interra Credit Union due to legal challenges from the Farm Bureau system. 49

rides on certain themes or characteristics that are drawn from the main values of the subculture. FBCU can therefore be described as embracing old-fashioned values, with a small-town vibe and a family orientation. But these themes are intertwined in a quite complex manner. I will discuss these themes first and then illustrate why they integrate into FBCU: The Abe Lincoln of Credit Unions. Old-Fashioned Values Part of the culture of the area is steeped in what might be termed as old-fashioned values. Some might bristle at the phrase oldfashioned, thinking it suggests being outdated and possibly irrelevant; however, used in this context, it merely denotes a reference to values that hark back to an earlier time in American history when people embraced truth, treated others with respect, valued one s word and honor, and made an effort to be friendly and personable. One member put it this way: It s a value system that I ve got. This place fits my value system. That s all. So these old- fashioned values resonate with members, employees, community, and FBCU. In another sense, a do what is right attitude exists. Although it is common in our culture today for many people to debate what is right and what is wrong, in this old- fashioned value system, everyone seems to share a common sense of right and wrong, and it is well defined. Participants speak of FBCU as being straight and true and consistent with their values. They place a great deal of trust in FBCU and feel that FBCU looks out for them. The basic thing is I feel like they really have my interest in mind. Another old- fashioned value commonly mentioned is a strong work ethic. Members characterize themselves and the FBCU employees as hard workers. Moreover, they credit FBCU management with working very hard to get the credit union where it is today. Sharing this common value of hard work makes FBCU more comfortable for members. In fact, one member who was asked, If FBCU was an animal, what animal would it be? replied with an answer that captures much of the essence of this old- fashioned value character: I see it like a horse. It s out there in the corner for you. It s doing a lot of work for the people it tries to serve, and it does it in a very down to earth way. 50

It is interesting that no participants commented on the new building. It appears that despite the seeming conflict between old-fashioned values and a slick new building, buildings are insignificant when it comes to old-fashioned values. Small-Town Vibe The less FBCU appears to share with big city banks, the more members feel pride and seem to connect with FBCU. The staff at FBCU are characterized as down to earth people. It [the credit union] pulls away from that big city feel . . . nothing high-pressured. Members know the people at FBCU. Employees are described as accommodating, friendly, and willing to go out of their way. Management is even applauded for being more hospitable, more willing to go the extra mile, more will ing to step out and take a chance on you. Participants also like the consistency in the staff. They like knowing they will see familiar faces every time they walk in. That small, hometown feel being true, down to earth, looking out for one another, and working hard to make life better for family, friends, and community is inextricably intertwined with the prior theme of old-fashioned values. One might characterize this interaction as we are all in this together. One participant noted, I think of them as more of a community, a part of the community and not a bigger bank. This small-town vibe expands on the theme of old-fashioned values by extending this value system from individuals to a community. Along the way a few other values associated with small-town life are added in. Family Orientation Given the themes of old-fashioned values and small-town vibe, it is not surprising that a theme of family also emerged from the interviews. Participants described FBCU as family oriented and as a family affair, noting that FBCU embraces family values. I mean, all the tellers know me well. I bring my little kids with me. The other day I was in here and four tellers were bringing candy. They have an annual meeting and they invite families. They re fam ily oriented. Participants really do feel as though they are part of family. They

talk about being able to see the president of FBCU whenever they 51 5151

want, even running into the president while at the credit union or in the community. They know the families of the people who work there and the families of the directors. And family is a very important value in this subculture. Contrary to today s modern cultural movement into the me era, it is clear that these participants are less focused on themselves and more focused on family and community. Personal success and individual careers take a back seat to contributions to family and community. FBCU is attributed with embracing these same values. The Abe Lincoln of Credit Unions Taken together, these themes culminate in a brand image that resembles the image and characteristics of one of our most famous presidents, Abraham Lincoln. Almost every description of Honest Abe includes character traits such as honesty, fairness, commitment to God, strong work ethic, respect, family, morality, kindness, friendliness, doing what is right, straight and true, and honor. Abe Lincoln epitomizes the very same characteristics that define the brand image of FBCU. However, being so closely tied to a subculture also presents some limitations. This credit union is not about offering the most and best products and services, or even the best rates; this credit union is about sharing and embracing a common cultural value system that makes members comfortable and motivates them to join and remain active members. Although it has been uncommon so far in this research, this clearly is one credit union that cannot afford to distance itself in any way from the culture of its current members. Participants told us that the word farm in the name is important to them because it stands for a set of values that come from a simple way of life that they embrace. They also told us that credit union is an important part of the FBCU name since it presents a community- oriented organization. To some extent, all organizations are defined and constrained by the culture in which they exist; in this particular case it is more dramatic. By being a part of this culture, FBCU has an inside track to the population of the area. FBCU is who they are, with their old- fashioned values, small- town vibe, and family orientation. Postscript After this research had concluded, FBCU was required to change its name due to legal requirements. After a long and rigorous process, it finally settled on the name Interra Credit Union. In represents the state of Indiana, and terra means land. Thus, Interra is to 52

be interpreted as Indiana land. The management of the credit union made certain that members were heavily involved with the name-change process, and the credit union still emphasizes its focus on values with the tag line Times change. Values don t. 53 5353

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ideas grow here PO Box 2998 Madison, WI 53701-2998 Phone (608) 231-8550 PUBLICATION #173 (12/08) www.filene.org ISBN 978-1-932795-52-3