Credit Unions Could Capture an Additional 40% Marketshare!
Posted October 14, 2015, Clarocision Research & MarketingCase study
Credit Unions have been around for over 100 years. Despite that fact, millions of Americans are still unaware of credit unions and the services they offer. In 2014, Clarocision Research & Marketing (www.crmfirm.com/marketresearch) conducted a major study on Florida Credit Unions. The focus of the study was to determine customer awareness of Credit Unions and to assess, if any, what opportunities existed to garner more customers in an ever competitive Financial Services Market.
Clarocision Research & Marketing conducted a quantitative study for a group of Credit unions in South Florida, with the following objectives: to assess the general awareness of the population in South Florida regarding Credit Unions, to gauge the awareness of the population in South Florida regarding Credit Union services and to see the likelihood of people joining a credit union once they were made aware of Credit Unions and their services.
For this study, a sample size of 372 completed surveys was used. The primary method of collecting the data was through telephone interviewing. The sample size allowed for a 95% confidence with interval of +/-5%. The study was comprised of 64% females and 36% males. The age disparities of respondents were 14.3% -18-24 years old, 19% -25-35 years old, 25.2% -36-45 years old, 21% - 46-54 years old and 20.2% -55 and above years old. Respondents were asked to indicate whether they had accounts at banks or Credit Unions to determine their ability to provide appropriate feedback on the banking industry. Respondents who did not have accounts at any financial institution were screened out of the study. Hence 100% of survey respondents either had accounts at banks, credit unions or some other type of financial institution. Some of the key issues that were addressed in the questions were consumer awareness of Credit unions, customer satisfaction with their current financial institutions, how likely they would be to change financial institution. Once they were given a brief description of what a Credit Union was about, in comparison to a bank they were further asked how likely they would be to bank with a Credit Union versus a bank. Below is a summary of the findings.
The major outcome of the study showed that in spite of the fact that Credit Unions were around for over 100 years people were still not as aware of them and their services. Once people were given a description of Credit Unions and their services a large percent was more likely to join a Credit Union. The study also showed that when it came to choosing a financial institution consumer needs shaped decision. Therefore Credit Unions needed to position themselves and products to be one of the choices among many. The bottom line was that Credit Unions needed to do better at advertisement. It was also clear that in spite of the fact that most banks use incentives to lure customers, most people did not make a decision on where to bank based on incentives; customer satisfaction, quality of service and products were greater factors. Other facts included financial security, fees, convenient locations, convenient hours and personal service. Many of these areas Credit Unions had excelled in but unknown to most.
It was alarming that some 40% of respondents were very likely to switch from a bank to a Credit Union. Of the people who were interviewed, over 60% of them did not currently have an account at a Credit Union. This meant Credit Unions had a very large opportunity for growth. A revealing statistics that got to the heart of awareness had to do with people who said they had heard a Credit Union advertisement in the last 30 days. Only 25% said they had heard a CU ad, while 61% of people did not. Some 14% could not recall. This showed that Credit Unions were not doing a good enough job creating awareness, and hence were missing out on opportunities to grow their customer base.
Through this study they were able to create marketing awareness campaigns that extolled their advantage, while at the same time promoted their unique products.