Credit union one and market

VanCity is the largest credit union one in Canada and second largest in North America in terms of total assets. Originally incorporated in 1946, VanCity now serves approximately 166.000 members and has assets of SI.6 billion. The company’s headquarters are in Vancouver, and its 22 branches and 800 employees serve nine communities located throughout the Greater Vancouver area.

VanCity provides one of the most comprehensive arrays of financial services available, including some services not found in other institutions. These include mortgage, consumer and commercial lending: a fully competitive range of deposit options: insurance agency services: and a full range of trust services. Unique to VanCity are a legal referral service; tax preparation service: Canada’s first social responsible equity fund, the Ethical Growth Fund: and TeleService. VanCity’s comprehensive telephone banking system.

Throughout its history. VanCity has pioneered many firsts in the financial marketplace and innovation continues to be a major strategy in supporting the organization’s mission of becoming the premier retail financial institution in the Greater Vancouver area.

Vancouver City Savings Credit Union was recently faced with a declining membership, primarily due to an aging of its customer base. The company began looking for ways to attract a more youthful clientele. Wayne McKay, senior vice president and manager of Marketing and Member Services, details his firm’s dilemma, “From 1980 to 1985, we lost nearly 17% of our junior accounts. That left us with less than 5% of” our client base younger than age 19.”

A U.S. research report, recently purchased by VanCity’s marketing stall, indicated that 80%) of children using a product or institution before their teens stayed with that choice for life, a finding confirmed by the firm’s own member histories. A round of competitor shopping – -checking out whether the kiddies were being targeted by other Vancouver financial institutions — suggested that the children’s market was an untapped market niche just ripe for the picking. Says McKay of the zero interest shown by his competitors in this market, “The conventional wisdom was, Why bother? Kids don’t have any money. They are just a pain in the backside.”

However, focus groups with youngsters and VanCity staff revealed that children, Hush with cash from paper routes and Christinas gifts, usually maintained good balances. Also, compared to the twice-weekly transactional schedule of most credit union members, the under-19 group tended to limit visits to once a month, opting to hoard booty in piggy banks in the interim. The financial concerns of this younger group were simple — a bit of interest and the chance to come in and take out some money when a favorite toy or some other special treat could be afforded. This pattern, of course, made these younger folks much less expensive to service than their older counterparts.

And so, a children’s account was born — ‘The Fat Cat Account” — with special fun features that appealed to a more youthful audience. Account passbooks, print ads, I-shirts, slickers, calculators, coloring books, growth charts and buttons, all sported the Fat Cat cartoon character (Fig. 1-4). “The kids love the name. They relate to it,” explains McKay. “It makes them feel special.”

Feeling special came out loud and clear as something children were missing in their dealings with other financial institutions. “The little folks in our interviews said that they had been treated as if they didn’t exist,” comments McKay. So service formed a key part of the VanCity Fat Cat campaign. Youngsters received assistance in the finer points of deposit slip writing and coin rolling, and moveable steps were available in all branches to allow these diminutive new members easier access to the teller counter.

The company also had some fun with the Fat Cat idea. Recalls McKay, “We gave away tickets to ball games and hired people dressed in Fat Cat costumes to put on performances outside our branches.”

The target audience for VanCity’s children’s account went beyond the kiddies themselves. Chances to win in a “Fat Chance” sweepstakes cajoled expectant mothers, aunts, uncles, parents and grandparents into opening accounts for their little relatives. One ad suggested the account as a super idea for a Christmas stocking stuffer. “We tried to make it a family thing,” says McKay. Print and radio ads played off the credit union’s overall corporate message — “You belong with us.” McKay explains. “We found that children liked the idea of belonging too.”

VanCity’s Fat Cat campaign certainly fattened the firm’s coffers. Within 15 months, the company had doubled its junior account population to 14,000, with total deposits rising to S8.5 million — an average of $700 per account. By June 1988. that total had grown to SI 1.5 million, plus junior members now represent 109r of VanCity”s customers, double the 1985 figure.

This is the first in the Recap Checklist series. You’ll find one at the end of each chapter to aid you in checking off the key steps to building an effective financial marketing plan, and to provide a quick review of the chapter’s highlights. The companies interviewed in this book were surveyed on their participation in each of the recommended steps; the results of this survey are also included.

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