Grounds for Change: Credit Unions are not Immune

CUinsight Grounds for Change Article

Been to a diner to grab a cup of coffee lately? Used to be that to get a cup while out, you’d head to the corner diner. They’d put a cup in front of you, grab the pot off the Bunn burner and fill your cup to the brim. But when was the last time you had a diner experience? Not lately? Where’d you go instead? Starbucks? The question is, Why?

Diners, while still around, are hardly the go-to source for coffee and other refreshments these days. The primary reason is that consumer tastes have changed. More exotic coffee drinks came to prominence and the locale for enjoying coffee shifted from counter top to couch. With regard to coffee, the only thing that didn’t change was the practices of corner diners everywhere.

Of course American diners aren’t the only businesses to be greatly impacted by changing consumer trends. A&P is no longer the go-to source for groceries and other home goods. Kodak is a shell of its former self, having missed out on the explosion in digital photography. Circuit City, once a leading provider of electronic goods for consumers, closed its doors years ago.

One of the major challenges business have is recognizing when the markets upon which they rely for profit begin to move on. In most cases, businesses realize too late that the mass market is no longer a mass.

Though making use of banking institutions is almost a requirement to function in our economy, credit unions are not immune to changing consumer tastes with regard to the use and management of financial services. How, then, is a credit union to ensure that it remains relevant to consumer banking needs?

One methodology that we recommend credit unions consider is something we call strategic positioning. Strategic positioning is about locating the concentrations of consumers with like interests so that, in developing strategy, credit union leaders can intelligently identify the markets with the greatest potential and then choose to change to meet the market where it exists.

Whether a credit union chooses strategic positioning or determines its options via some other means, the message is this: success requires change. In many of the examples of once-mighty companies that have fallen on hard times, the cause of failure can most often be traced back to lack of–or resistance to–change.

Many credit unions are in the midst of strategic planning and budgeting processes at this time of year. I wonder how much of the process is devoted to identifying potential forces of change, and their possible reactions to those changes? How many credit unions are isolating the financial services trends of today that might serve to shape consumer demands of the future?

My fear is that for many credit unions, the discussion is more about preservation when it should be about change. Preservation merely maintains service levels rather than redefines service. Preservation maintains delivery systems rather than redefines delivery systems. Preservation maintains front line staff roles and responsibilities rather than redefines the role of staff.

In the midst of great change in the financial community it’s interesting that some credit unions, in seeking to spice up their branches and drive traffic, have begun serving coffee. In the context of change, is embracing a catalyst for the demise of the corner diner the best we can do? When you think about what you need to do to maintain your relevance to member needs, meet them where they’ll be… not where they were.

Originally published October 1, 2012 on CUinsight.com.

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