Maybe we should just call them “customers”

There’s a conversation going on over at the Everything CU blog about cu vocabulary and jargon that brings up an issue I think we should talk about.

One idea mentioned (in this and other posts and comments) is the thought that if credit unions refer to the people that consume their services as “members” or “owners” this will cause people choose credit unions over banks. While I understand both terms are correct references to the privileges granted to those at a credit union, and I agree both are neat, cool ways to think of these people, this notion ignores the role that drives the interactions of these people and the role they identify most with: “customer”

Story time

I really love the outdoors. Camping, hiking, and backpacking really get me going. In May, I was at a local REI picking up some gear. The cashier asked if I wanted to become an REI member for $15. There was a discount and year-end payout involved, so I signed up. I had become an REI member! Cool.

As I was leaving, the cashier also threw in this nugget of information. “REI is a cooperative and with your membership, you have become a part owner.” I had become a part owner of REI! Way Cool!

How many times have I been back to REI since? Zero. How many times have I visited their website: Only a couple.

What went wrong between me and REI? Am I an unhappy member and owner? No. I just haven’t had a consumer need that drew me back to REI. Have a bought other gear? Yes. I’ve just found it cheaper or closer.

My REI membership and ownership has NO BEARING on where I buy my gear. None at all.

The same is true for my financial needs. An older Seth Godin article talks about a “Customer Hierarchy of Needs” and while it looks to be geared towards more technical products, it easily extends to the financial world. Only after I become a satisfied customer can my interactions help me move to a level of considering what it means to be a member and an owner.

So what’s a cu to do?

1) Survey your members and find out which term (or definition of term) they most identify with and which one drives their interactions with you. Maybe one of the marketing gurus around the cu world can help us come up with something .

(My bold predictions: Most people don’t stop by your branch or website as an “owner” to check up on if things are running smoothly. Your member/owner actually sees herself as a customer first.)

2) If my prediction holds, abandon the talk about “members” and “owners” and try to provide the best “customer” experience in the financial industry. This is the reason people will choose your cu over the bank next door.

3) If you really want to stick with “members” (maybe you’ve printed t-shirts and mugs and branded toasters) make membership mean something. As Gene Blishen reminds us in one of his posts about the 7 principles, there is a “responsibility of membership” and I believe that this “responsibility” can be the key to moving a person from a customer to a member. Make a customer invest a piece of himself that is larger than just his money, and I believe you have a much better chance of him becoming a happy member and repeat customer.

4) If you’ve just made the decision to start using the term “owners”, I can’t say I know what to tell you. The thought of ownership seems so far up in the atmosphere that you will have a hard time getting people with feet on the ground level to understand, recognize, and appreciate it. Try to identify those that are already thinking at a “member” level and develop ways to help them to the next level.

I’d love to hear what you think.


35 comments so far

  1. Morriss Partee on

    Hi Mr. X! You may generate some interesting commentary with this one. I feel compelled to throw my two cents in.

    You make some great points here. Most people don’t FEEL like owners of a CU, because it’s grown so big. Most members weren’t there when the CU was formed, they don’t know the management nor the board. They don’t understand that profits are returned to them via lower fees, lower loan rates, and higher savings rates, instead of being shipped off to shareholders. It’s a pretty abstract notion that I should pay myself an extra $5 every time I make my monthly car payment to the CU, because that’s how much I’m putting into my own pocket vs. it going to a stockholder. When CUs were first formed, most of them actually returned a dividend to each member annually. That made the ownership FEEL much more tangible.

    The problem does not stem from CUs treating their “people” as members instead of customers. By using the term “member” instead of “customer”, CUs are reinforcing to BOTH the member AND the employee, that this RELATIONSHIP IS SPECIAL. It’s NOT the ordinary “customer” relationship. Yes, it’s true, you’re not going to buy an EXTRA jacket from REI because you are a member there, if you’ve just bought a jacket. The question becomes, the next time you need camping gear, are you going to return to a place which exists for a purpose larger than simply to enrich itself.

    Part of the problem is that in today’s fast paced world, the REI clerk didn’t have time to explain all of that to you. Just as CU tellers don’t have time to explain all of that. That’s where using the term “member” serves as a reminder that reinforces the difference.

  2. Nathan Demous on

    This is a conversation that seems pretty superficial, but touches on why CUs are not getting much traction these days. Consumers have changed since CUs first started. Banks have recognized this and adjusted their practices, but CUs seem to want to relive the Glory Days. We need to wake up, realize that to our members/customers/owners we are no different than any other financial institution. Unfortunately, for the consumer, the technical differences between a bank and a CU is just too esoteric, and the days of lower fees, higher dividends, etc at CUs are quickly disappearing. If CUs are going to thrive, we need to reevaluate our fee structures, work towards helping our members become more financially stable, and show the banks that if you care about the financial well being of your consumers, provide them with tools to make good sound financial decisions, you can become a prosperous financial institution.

  3. Matt Dean on

    Nathan, I agree with your assessment that the only way CUs can thrive is by adapting to the needs and wants of their members (the idea of fulfilling “needs” vs. “wants” might require a separate discussion). However, I still find value in the term “member” for much the same reasons that Morriss outlined.

    I don’t think that we’ll ever get to the point where 100% of members care about being “members” or “owners.” And I’m ok with that. The person who cares about being a “member” is the one who has the potential to be a passionate advocate (an evangelist, if you will) for your credit union.

    For example, it seems like a new personal finance blog is popping up every day, and several of them have a huge reader base. These people are devoting their time to helping their friends and complete strangers spend less than they make, save for emergencies, and get out of debt. These bloggers are much more likely to care about membership and have their opinions about credit unions shaped by the ownership structure, even though they’re probably not going to present it to their readers in those terms. And bloggers are just a small subset of the world of evangelists.

    Like Morriss mentioned, the other group the name “member” is important to is employees, and not just front-line employees. I’ve only been involved in a few credit union management meetings, but “how will this benefit our members?” is a recurring theme.

    So it’s not important to everyone and never will be. But it’s important to some and doesn’t detract from the rest. I say we keep it.

  4. Travis Carnahan on

    Skeptic, I understand what you are saying and agree that you are describing how things are right now. But I think it is the responsibility of each CU to find a way to make membership relevant to as many members as possible. I have heard of a CU marketing campaign that is, “Walk into our Credit Union like you own it….because you do!” Making members aware of what they have is a large part of credit unions problems IMHO. Great thought provoking post; I appreciate what you have started here and hope that your blog flourishes in its open, honest, and anonymous spirit.

  5. […] October 17, 2007 Posted by rshevlin in banking, marketing. trackback The CU Realist, oops, I mean CU Skeptic, recently wrote: One idea mentioned (in this and other posts) is the thought that if credit unions […]

  6. James Flores on

    A good way of looking at this issue is through the eyes of our future members: consumers under the age of 25. From what we’ve seen with this generation, exclusivity plays a huge part of their lives. Think of the cool night clubs that are difficult to get in. The more you restrict something, the more intriguing it is to get in.

    Now one of the challenges that CUs face today is that exclusivity is rapidly diminishing. With community charters, it seems like everyone has access to at least 2 local credit unions, or probably more.

    Just like anything else, what we do with this differentiating factor is key. Figure out how to translate this key difference in a way that resonates with a younger audience and the word “Member” becomes a strength.

    In regards to the REI example, they haven’t done this. Obviously they haven’t given you any reasons while membership matters, or what’s in it for you or the causes, issues or activities that are important to you. For example, if you knew that your money helped support a cause close to your heart, you may be more inclined to shop there. Maybe.

    This all reminds me of a funny story of when one our clients was conducting a youth market focus group. When we asked a 16-year old girl if she knew what a credit union was, she responded: “Kinda, my friend told me that not everyone can be a member, so that if I can join one, I should.”

  7. Morriss Partee on

    Responding to Nathan’s excellent comment: You say that consumers have changed since CUs first started. Yes, you are absolutely right. And CUs need to change and keep up with the times, and what their customers expect of them today.

    But because broad things change slowly over time, we often miss the bigger picture. Here’s the bigger picture: The first credit union in the United States was started in November of 1908, and the majority of CUs were founded during the Great Depression. During all of that time, life was hard for average working people, where men worked in mills for 10 hours per day, six days a week, and took home one dollar per day. Banks did not make loans to these workers. If you were very prosperous and somehow could get a bank loan, the rates would be through the roof, in some cases 25%.

    That’s the environment in which most CUs were founded. So the larger picture is that this crazy idea that we could pool our money and make loans to each other, bypassing for-profit banks… well, it WORKED. The banks HAD to become more competitive in order not to lose ALL their business to credit unions. Without credit unions, far fewer people could get loans, and those that did would have to pay far higher rates, thus slowing down our entire economy. So THANK YOU Credit Union Professionals who go to work every day to make this country stronger by helping all of us help ourselves. Membership/ownership in credit unions is REAL and truly makes a difference to all of us, whether or not we know it or fully understand it.

  8. tinfoiling on

    Lots to has been said but I would put it this way. As a general manager of a credit union one of the most important things that I can do is create a culture where all the staff treat each member as an owner. That makes you, the credit union, relevant to those you serve.

  9. CU Skeptic on

    @Everybody: Thanks for the lively discussion and thoughts.

    Morris, Travis, and James: I’ve been hearing the “education is the answer” speech for a couple of years now and I can’t say I buy it. I’d love to hear of examples where an education campaign increased membership or member involvement.

    Morris and Matt: I understand “member” is an important internal term. I’ve got to ask though, would you rather have a teller treat you like an average member or a valuable customer?

    I’m not saying you can’t do both, but I do stick by my claim that you have to meet the need of “customer” before “member” means anything at all. If a cu can do both, more power and push on!

    Morris: I have the highest respect for where credit unions come from and the void they have filled in our nation’s financial history. I love the purity of the cu concept.

    Unfortunately, I don’t see many credit unions rooted in serving those that banks will not serve. If Currency Marketing can make a living out of converting bank customers to cu members, I don’t see how you can say the role of the credit union has been unchanged since its noble beginnings.

    (Totally not a knock on Currency Marketing. They are doing some bold stuff up there.)

  10. CU Skeptic on

    @tinfoiling: I have the greatest respect for you and truely believe you know your credit union better than any of us ever could.

    If your experience tells you that the people that walk through your doors daily should be called “owners” don’t think twice about doing it.

    Is is it best term to use across the industry, in every cu? I can’t say I would agree to that.

    That said, I do firmly believe in the “Autonomy and Independence” of each cu and I would love to see more GMs out here telling us why they choose one or the other for their cu.

  11. tinfoiling on

    Sorry maybe I am misunderstood here. I am not saying that we call them owners when they walk through the door. What I am saying is that we treat them like owners. As always it is more important as to what you do than what you say. There seems to be a healthy respect when that happens. Someone once said to me that every GM/CEO of a credit union should sweat a little before an AGM. If you don’t then something is wrong.

  12. Nathan Demous on

    I’m not sure I really see that internally calling someone a member/owner versus as customer makes a difference. CUs say that members own the business. Most customer training programs emphasize that the customer pays your paycheck. As an employee, who are you more likely to bend over backwards for, the owner of the company, or the person that gives you the paycheck? Now I will say, if you have cultivated a culture at your CU that truly treats members as royalty, that is great. However, most CUs I walk in to have bored tellers, distracted greeters, and branch managers that are just waiting for five o’clock to roll around so they can go home.

  13. Morriss Partee on

    Thank you, everyone, for the wonderful conversation, and thank you CU Skeptic for your skeptical voice. We definitely need your voice, especially today, because you are absolutely right that CUs face the very real danger of becoming irrelevant due to today’s competition.

    I think part of the disconnect between voices here in the comments is a difference in size. I have seen EVERY size credit union from a $1 billion CU with 8 branches in two cities, and I’ve met the CEO of a $2 million CU who has only one other employee and operates on a shoe-string budget. And scores of CUs in between in all parts of the country.

    A huge black eye in the industry are credit unions that are run as if they were banks. Naturally, a credit union CAN be run very much like a bank… leading to those bored tellers who could care less. What I think is a real shame is that the story that I shared earlier here, the history and purpose of credit unions, is not being shared with employees on DAY ONE of their employment. How can you not feel something once you understand that? How can you NOT feel that you a part of a higher cause, a nobler mission than simply making transaction after transaction?

    @CU Skeptic – Calling the “members” in NO WAY precludes that they aren’t treated as customers first. I don’t know ANY instance where treating someone like a member means they AREN’T treated as a customer too. Can you name any instance where that is happening? A member has ALL the same privileges as a customer, and is treated the same as a customer, but with the BONUS of being an owner also.

  14. Morriss Partee on

    Isn’t it a shame that I worked with this industry for about 7 or 8 years before I found any of this stuff out? And that I had to do my own research to find out? How many people know what Estes Park was? Why isn’t there a web page that contains the story of each person who made the trip to Estes Park in 1934? How about what the Federal Credit Union Act of 1934 meant to the movement? Anyone? Anyone?

    Here’s another crying shame: There is no web page that I can find explaining what Dora Maxwell or Louise McCarren Herring did for the movement. When I google their names I get page after page of award winners, but nowhere can I find their story. I tried to put what little I could find into wikipedia, but I want to know more, and their stories deserve to be heard. Dora Maxwell’s story founding CU after CU in New York despite the banking commissioner trying to intimidate her… this is WOW stuff… I want to know more.

  15. Chuck Van Court on

    IMO: I believe that a credit union can differentiate itself by emphasizing to its members that they are owners of the credit union as long as they clearly define the direct member benefits and do what they say. Just like any other word, “owner” is easy to say, but it can serve to quickly boil meaning in branding.

    More so than a bank that is largely obligated to their investors who often are not users of their products and services, the co-op model can create very different motivations in staff and better participation by members when executed as intended. Some credit unions execute a co-op model well and other don’t.

    I do agree that some credit union staff behave as if they have a higher degree of inherent loyalty from “members”, which is wishful thinking for the majority of folks. Either you earn the loyalty of each person with every interaction, and welcome and facilitate individual and community dialogue to help improve, or you will not sustain loyalty.

  16. CU Communicator on

    Ok this is creepy because it runs counter to the whole Communicator moniker, but here goes …

    “It ain’t what you call ’em, it’s how you treat ’em that they’ll remember most.”

  17. Denise Wymore on


    You are not REI’s target audience. Period. That’s why you don’t get the membership thing.

  18. Chuck Van Court on


    Skeptic represents a lost business opportunity for REI.

    It comes down to REI demonstrating that the membership is valuable relative to his alternatives.

    If the “membership thing” brings nothing new to the table, there is nothing to “get.”

  19. Denise Wymore on


    Why I say that Skeptic is NOT REI’s target audience was his comment on shopping for stuff that was cheaper and closer than REI.

    Going to REI is an experience. You either dig that or you don’t. You are either willing to pay extra for that experience (and know you’re essentially getting 10% off in the form of the patronage refund at the end of the year) or you aren’t.

    Membership brings TONS to the table for those that are members. True loyal members. It’s a community.

    My sister just got back from Mt. Killimanjaro – she and several other credit union professionals summitted to raise money for kids charities – the program and guide were from REI.

    Sounds like Skeptic is a casual camper – not a hard core outdoorsman. If you care about quality gear – your life depends upon it – you’re not going to get it at Dick’s or Joes. You go to REI.

  20. Chuck Van Court on


    I am pretty sure that Sally Jewell’s response to Skeptic would be very different than your’s.

    I understand that REI has a large group of consumers who are hardcore outdoors people. However, I do not agree with your unilateral dismissal of Skeptic and all other casual outdoors people for not embracing the benefits of REI’s membership…at least how it was executed.

    I also believe that such an approach by credit unions to only target folks who readily embrace their community is woefully short sided. A well communicated and executed value proposition will resonate with an audience beyond the core consumers.

    Just one guy’s opinion.

  21. Denise Wymore on


    Sally Jewell seems to get that REI needs to be different. That it’s not price that makes them competitive – it’s community. A common bond. I do not unilaterally dismiss all casual campers, but Skeptic said he saw no benefit of membership because he could get stuff closer and cheaper. That’s not how REI competes.
    They compete on their experience and level of expertise in their stores. When you are in the bike section, you are talking to people who ride bikes – not high school kids that need a job.

    YOU SAID: “A well communicated and executed value proposition will resonate with an audience beyond the core consumers” Give me an example of what you mean……because from a business modeling perspective that doesn’t make sense.

  22. Chuck Van Court on


    REI offers higher quality products that are supported by experienced staff who are good at helping consumers select and use their products.

    This is clearly a fundamental part of how they differentiate themselves and relevant to all consumers participating in outdoor activities, especially relevant I would think to people not very experienced in using and selecting outdoors equipment.

    REI has obviously not done a very good job at communicating and demonstrating to Skeptic how they are different and why he should value those differences.

    Some REI consumers indeed believe that they are part of a unique community with like-minded people. Others just think REI has better quality stuff and people who will make sure they get the right stuff for them and their particular needs.

    You said: “You are not REI’s target audience. Period. That’s why you don’t get the membership thing.” I just think you’re wrong.

    REI value proposition extends beyond the hard core outdoors people and they need to ensure that potential consumers aren’t left with trying to extract their particular value from nebulous concepts like “membership” or being part of REIs “community.”

    I know that Denise will fire back, which is good….but what do you others think?

  23. […] was over at CUSkeptic’s site. He picked up the mantle of how you address the people who give you money and what they would […]

  24. Tony Mannor on

    WOW! I wish I got this kind of conversation at my house!

    There was one idea that seemed to bother me. The idea of how I want to be considered – a member vs. an owner vs. a customer.

    I typed up a whole long post here but realized that I havent posted on my site in a while. So I posted – Owner vs. Member vs. Customer. What do your members want? Personally, given the option, I would prefer to be a customer.

  25. Credit Union Warrior on

    I don’t care what I’m called…I just like getting a good deal and being treated right. It just so happens that being an owner/member/advocate/fanboy/evangelist of my credit union provides me with both. I’ve been a bank customer, and simply didn’t like it.

  26. Chuck Van Court on

    So Skeptic, what’s you’re opinion regarding the comments made to this post?

    I am also curious if anyone supports Denise’s position that “you are not REI’s target audience. Period. That’s why you don’t get the membership thing.”

  27. CU Skeptic on

    So here’s my take:

    Denise, as much as it hurts me to say, makes a good point. I am all about niche/specialized markets, and from that view, I really don’t fit the outdoor extremist that REI is and should be after.

    However, to think that me being outside this target group limits my ability to “get the membership thing” in regard to REI is a little elitist. I understand what is being offered. It’s just that the value of that offer is so small in my eyes that it doesn’t impact my purchasing decisions.

    But let’s do what this blog is meant to do, bring this back to credit unions. Are there some people that just don’t “get” membership? There are, but I think they are few and far between. I think a more accurate description may be that few people value credit union membership enough to allow it to impact their financial decisions.

    Why? It’s popular to point to expanding fields of membership as the reason, and I definitely lean that way. I hope to post more on this before the end of the week.

  28. Chuck Van Court on

    Skeptic: I agree with what you are saying. Niches are important for all companies but your elitist characterization is spot on.

    In the end, it always comes down to what specifically each person gets from the relationship. What you call the consumer is pretty meaningless unless the term is backed by differentiated delivery that gives legitimate meaning and consequence to the terms used in messaging.

  29. Nathan Demous on

    Chuck, to take that a step further, the differentiated delivery has to be conspicuous. If the consumer can not readily see the benefits of “membership”, then the consumer is less likely to feel any loyalty.

  30. CU Skeptic on


    I think it’s important to remember that “value” does not always mean “benefits”. Exclusivity can build value, but I don’t know if I’d call it a benefit.

  31. Nathan Demous on

    Skeptic, I think what frustrates me the most with CUs today, is that even from the inside, it is sometimes difficult for me to see the concrete reasons that the average CU is better for the consumer than the average bank. And if I am having trouble seeing it, how can I expect the man on the street to see it.

  32. CU Skeptic on


    I can’t help you there. I’m of the opinion that an average credit union is not better than an average bank. They are both average.

    The key for the credit union, stop being AVERAGE!

  33. Chuck Van Court on

    I could not agree more. Credit unions are not all created equally and many offer nothing better than the bank down the street.

    However, I do believe that the co-op model inherently creates different motivations and accountabilities that are beneficial for consumers and difficult for banks to achieve because of their short-term responsibilities to investors.

    Credit unions must also be focused on profitability, but the focus should be on advancing their value proposition to members rather than providing a good return to investors.

    The investors in credit unions are their member owners who use their products and services. That’s why I still believe that when executed correctly and branded accordingly, ownership in a credit union can have real substance.

  34. Morriss Partee on

    Your story matters. Period. Now I have proof. $600,000 of proof.

  35. […] it’s very clear that “owner” is a term that is appropriate. (Though I believe thinking of participates as “customers” is the more effective, there are those much more experience than I that would choose the word […]

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