cu difference committee november 18, 2009 michigan credit union league livonia and lansing offices
TRANSCRIPT
CU Difference Committee
November 18, 2009Michigan Credit Union League
Livonia and Lansing offices
Web/Phone Conference Guidelines
Muting and unmuting• On the phone, participants can mute their own lines by
pressing *6 • Unmute your line by pressing *7• Please do not place your phone on hold
Other participants will hear on-hold messages/music
Agenda
I. Call to Order/Roll CallII. Minutes – August 25, 2009III. Reports
A. MCUL President & CEO/Committee Ex-Officio David AdamsB. CU Difference Chairman Darren Cameron
IV. Informational Items A. Invoices in Membership Package B. Creative Proposal for 2010 C. Research Results
D. Tentative 2010 Meeting DatesVI. Adjournment
Call to Order/Roll Call – Minutes - Reports
I. Call to Order/Roll Call
II. Meeting Minutes - August 25, 2009
III. Reports A. MCUL President & CEO David Adams B. CU Difference Chairman Darren Cameron
IV. Informational Items
A. Invoices/Membership Package• One invoice for MCUL dues, CUNA dues, CU Difference
contributions• Asking for 2010 contribution plus 2009 and 2010 MCUL
dues rebates• Due out early December
IV. Informational Items
B. Creative Proposal for 2010
TV Creative
Creative Messaging
1. GM TV spot GM offer/IIA
2. Chrysler TV spot Chrysler offer/IIA
3. New TV Spot CU Branding
• Better rates/lower fees
• Safety/Trust
• Commitment/stand behind members and communities
• Not-for-profit/people focused
Radio Creative
Creative Messaging
1. GM radio spot GM offer/IIA
2. Chrysler radio spot Chrysler offer/IIA
3. Invest in America radio spot Invest in America discounts
4. CU brand radio spot CU branding
• Better rates/lower fees
• Safety/trust
• Commitment/stand behind members
• Not-for-profit/people focused
Media• Campaign plan
• 10-12 weeks• March/April start• TV and radio• Statewide
• Other considerations• Web banners• Collateral• Web links to TV spots• Web content
IV. Informational Items
C. 2009 research results
Overview/Goals• Position credit unions as safe and secure
• Take advantage of unprecedented opportunity to step out as a safe, people-focused option
• Raise awareness of credit unions and programs• Invest in America• Increase membership overall
• Improve perception among consumers and lawmakers • Cooperative advertising, grassroots lobbying and the Community
Reinvestment Initiative (CRI) represent the MCUL’s three-tier approach to protecting and promoting the credit union difference
• Focus on what credit unions have in common• Everyone can join• Better rates, fewer fees• Nationwide free ATM networks• Great service
Timeline
Year Media Campaigns Research
2004 December (benchmark)
2005 $2M TV/radio December
2006 $1.1M TV/radio
2007$500,000 radio (Comerica)
$1.5M TV/radioJanuary (2006)
2008$1.5M TV/radio
$750,000 radio (Trust)
January (2007)
August
2009 $1.6M TV/radio September
2009 Spending Summary
DMAAmount Raised
Total Spent
TV/Cable Spots
TV Weeks
Radio Spots
Radio Weeks
Alpena $ 26,646.63 $ 22,635.52 260 6 620 8
Cass/Berrien $ 10,498.53 $ 9,646.02 n/a n/a 400 10
Detroit $ 545,962.23 $ 514,928.38 n/a n/a 7519 14
Lenawee $ 8,000.00 $ 7,772.18 n/a n/a 506 10
Flint $ 389,567.85 $ 342,379.99 1785 15 4559 15
Grand Rapids $ 344,872.04 $ 322,743.88 688 6 4798 10
Battle Creek $ 27,614.00 $ 27,569.72 n/a n/a 848 15
Lansing $ 161,015.53 $ 133,453.18 840 4 2442 13
Marquette $ 54,519.69 $ 48,691.01 333 6 1790 6
Traverse City $ 94,155.29 $ 94,244.58 213 4 2180 8
Total $ 1,662,851.79 $ 1,524,064.45
Participation by ChapterChapters CUs CUs Paid Nonaffiliates Affiliated Participation
Battle Creek 8 7 1 100%
Blue Ox 10 8 1 89%
Downriver 21 7 0 33%
Flint 14 5 2 42%
Grand River 32 19 5 70%
Huron Valley 10 5 0 50%
Jackson 8 4 1 57%
Kalamazoo 15 12 1 86%
Lansing 13 8 2 73%
Metro East 42 17 5 46%
Metro West 30 17 4 65%
Mid-Michigan 30 17 3 63%
Moon 22 13 0 59%
Oakland County 35 16 5 53%
Paul Bunyan 16 3 5 27%
Southwestern 6 5 0 83%
Upper Peninsula 31 18 0 58%
TOTAL 343 181 35 59%
Methodology
• Telephone survey of financial decision-makers in Michigan• 800 interviews• Members vs. nonmembers tracked: 55% of Michigan residents are
credit union members Among nonmembers, 58% had been members in past
Members Nonmembers Total
Detroit 200 202 402
Grand Rapids 75 75 150
Other DMAs 125 125 250
Total 400 402 802
• To understand if consumers are “getting” the CU Difference message
• Surveys look at campaign impact in several areas• Awareness• Usage/satisfaction• Is everyone eligible?• CU vs. bank attitude comparisons• Invest in America discounts (new in 2009)
Research Objectives
Key Findings
Advertising Awareness
Respondents were asked about their awareness of advertising for “financial institutions” in the past six months
• 26% mentioned credit union, vs. 18% in 2004• 49% mentioned bank• We still have some work to do, but have made great progress
Advertising Awareness
18%
18%
45%
15%
21%
42%
18%
26%
47%
20%
21%
44%
17%
27%
48%
11%
26%
49%
Investment Institution*
Credit Union
Bank
2009
2008
2007
2006
2005
2004
Advertising Awareness• Interestingly, gaps in awareness (bank vs. CU advertising) were largest in
Detroit DMA and among CU membersDetroit DMA
22%
50%
24%20%22%
18%14%
53%51%51%
45%47%
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009
Total CU Members
27%
54%
28%
22%
30%24%23%
49%45%
48%46%49%
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009
28 points 27 points
Advertising AwarenessTotal Non-members
25%
42%
24%20%20%18%
13%
47%43%44%
37%40%
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009
• CU advertising awareness by nonmembers shows a significant and steady increase since 2004
Advertising Awareness
2008: 55%2007: 49%2006: 51%2005: 56%2004: 48%
Unaided26%
Aided29%
Not Aware Of Any CU Advertising
45%
Total 2009 CU
Ad Awareness
= 55%
Answered “Yes” to “Do you remember seeing or hearing any advertising about Michigan credit unions within the past 6 months?”
Mentioned “Credit Union” when asked “For which types of financial institutions do you recall seeing or hearing advertising within the past 6 months?”
2009
Advertising AwarenessTotal hits on lovemycreditunion.org increased significantly over months that ads did not run on TV and radio
CU vs. Bank ImageThe gap between the CUs and banks grew in favor of CUs on many attributes
2008
CU Bank Difference Difference
7.7 4.7 3.0 Have low fees 2.3
7.3 4.4 2.9 More likely to approve a loan 2.6
7.4 5.0 2.4 Have low interest rates on loans 1.9
7.4 5.3 2.1 Consider customers' unique situation for mortgage app. 1.7
7.9 6.0 1.9 Offer superior customer service 1.5
7.5 5.6 1.9 Pay very competitive CD / money market rates 1.2
8.2 6.6 1.6 Treat customers with respect 1.5
7.4 6.0 1.4 Are very involved in the community 1.0
7.0 5.7 1.3 Make very few errors 1.0
7.3 6.1 1.2 Can provide solid financial planning 0.6
7.4 6.4 1.0 Are financially sophisticated, provide expert advice 0.5
8.3 7.4 0.9 Are a very safe place to keep my money 0.3
7.7 7.6 0.1 Have a full range of financial products 0.1
7.4 7.7 -0.3 Are convenient -0.4
8.2 8.9 -0.7 Deposits are federally insured -0.6
2009 Comparison
CU Image<-- Avg. Rating Of Credit Unions -->
2008 2009 2008 2009
9.0 + 9.0 8.7 Are a very safe place to keep my money 8.3 7.7
8.5 - 8.9 9.0 8.6 Treat customers with respect 8.5 7.7
8.0 - 8.4 8.9 8.6 Deposits are federally insured 8.4 7.6
7.5 - 7.9 8.8 8.4 Offer superior customer service 8.1 7.3
7.0 - 7.4 8.5 8.1 Have low fees 8.0 7.0
< 7.0 8.3 8.1 Have a full range of financial products 7.7 7.2
8.3 7.8 Pay very competitive CD / money market rates 7.9 7.0
8.3 7.7 Have low interest rates on loans 8.0 7.0
8.2 7.8 Consider customers' unique situation for mortgage app. 7.9 6.9
8.1 7.8 Are financially sophisticated, provide expert advice 7.6 6.9
8.2 8.0 Are convenient 7.3 6.6
7.7 7.7 Are very involved in the community 7.4 7.0
7.9 7.6 More likely to approve a loan 7.5 6.8
8.0 7.6 Can provide solid financial planning 7.4 6.8
8.3 7.3 Make very few errors 7.7 6.4
CU Members Non-members
Deposit Account Considerations
• Respondents were asked what type of financial institution would first come to mind if they wanted to open a deposit account
• Consideration of credit unions for a deposit account increased significantly while consideration of banks decreased significantly. The gap has closed from 22 points in 2004 to just 8 points in 2009
Total Michigan
64%
72%
62%57%59%60%
56%
76%76%77%78%78%
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009
Lender considerations
• Respondents were asked what type of financial institution would first come to mind if they wanted to get a loan
• Total CU consideration is 57% vs. 68% for banks
37%
49%68%
57%
2%
2%
3%
4%
Stockbrokerage
Auto Finance Co.
Thrift / S & L
Mortgage Broker
Credit Union
Bank
Top Of Mind
Other Mentions
Don’t know: 10%
Credit Union Eligibility
29% 62% 9%
39% 52% 9%
39% 48% 13%
40% 45% 15%
45% 43% 12%
55% 28% 17%
0% 20% 40% 60% 80% 100%
2004
2005
2006
2007
2008
2009
Everyone is eligible Restrictions exist Don't know
• Reached a new and statistically significant high in 2009• Consistent increases since 2004
Credit Union Eligibility
Understanding that everyone can join increased in each market as well
2004 2005 2006 2007 2008 2009
Total sample 29% 39% 39% 40% 45% 55%
Credit union members 33% 40% 43% 47% 48% 62%
Non-members 23% 38% 34% 33% 41% 46%
Detroit DMA 28% 39% 35% 34% 39% 49%
Grand Rapids DMA 29% 31% 39% 43% 50% 63%
Other Michigan 29% 44% 46% 49% 52% 60%
Can Join A Credit Union:Believe Everyone
Invest in America Discounts
• Based on a new question added to the 2009 survey, more than one-third said they had heard about Chrysler and GM discounts to credit union members
• 14% of those respondents used the discount• 67% of those financed their new vehicle through a credit union
% Yes By Area / Subgroup:
Total Michigan 36%
CU Members 42%
Non-members 30%
Detroit DMA 31%
Grand Rapids DMA 41%
Other Michigan 43%
Don't know5%
No59%
Yes36%
Invest in America Discounts
How Did You First Learn About This Discount? TV 28%
Credit union 20%
Friend / relative 13%
Dealer 11%
Newspaper 11%
Direct mail 6%
Radio 6%
Web 4%
• More than one-quarter of respondents who heard about the discounts first learned about it on TV
• Study results suggest that CU Difference TV/radio ads were noticed by many consumers
General Opinion of Credit Unions
• Overall CU favorability was solid at 80%• Non-members significantly higher in 2009 vs. 2004 66% vs. 58%
Very Favorable
55%
Neither / Can't Say
15%
Somewhat Favorable
25%
Somewhat Unfavorable
3%
Very Unfavorable
2%
Overall Satisfaction
• 69% of CU members are very satisfied with their PFI• For banks, 43% are very satisfied
44 28 22 6
51 21 23 5
51 25 20 4
44 25 26 5
43 28 22 7
69 20 9 2
71 21 6 2
70 16 12 2
65 22 11 2
69 20 9 2
0 20 40 60 80 100
Bank PFI - 2004
Bank PFI - 2005
Bank PFI - 2006
Bank PFI - 2007
Bank PFI - 2009
CU PFI - 2004
CU PFI - 2005
CU PFI - 2006
CU PFI - 2007
CU PFI - 2009
Very Satisfied (9-10) Satisfied (8) Neutral (5-7) Dissatisfied (1-4)
Implications
Overall the research indicates that the cooperative advertising effort is effective and meeting its defined objectives• Awareness: Continues to increase• Deposit consideration: Gap between credit unions and banks closed
from 22 points in 2004 to 8 points in 2009• Everyone is eligible: Significant gains in all media markets in 2009
that anyone can join• Call-to-Action: Hits to www.lovemycreditunion.org increased
dramatically
Implications• Credit unions have made significant progress relative to banks
• Awareness• Image• Deposit consideration
• 2009 campaign was successful in “breaking through” to many financial decision-makers
• No proof that increase was caused by MCUL cooperative advertising alone. • It is unlikely that a “statistically significant” difference between 2004 and 2009
would have surfaced without substantial advertising activity• Statistically significant high of 55% understanding that everyone is
eligible to join suggests that our advertising message has been “sinking in.”
• Credit union consideration for deposit accounts has been improving at the same time that bank consideration has deteriorated
Implications• The average ratings on most image attributes were higher for credit
unions than for banks• This has been true each year the study has been conducted• Credit unions did suffer declines on many image attributes, but banks suffered
worse declines• The gap in image between credit unions and banks grew significantly in favor of
credit unions• Despite image declines, 80% gave a “very favorable” or “somewhat
favorable” rating for their overall opinion of credit unions• CU members remain significantly more satisfied than bank customers
• With recent decline in image, credit union advertising should continue to encourage trust and to reassure consumers about the safety of credit unions
• The financial crisis is the likely culprit behind the abrupt and significant deterioration in image
• The average consumer does not necessarily distinguish which types of financial institutions were connected to the crisis
Implications
• Banks, with their much-larger advertising budgets, cannot be expected to sit still• Future bank advertising is likely to attempt to heal
recent damage
• It makes sense to invest as much as possible in cooperative advertising • Maintain progress • Strive for further gains
Bank/CU Spending ComparisonGR/KA/BC/MN media market
• 2009 CU Difference (TV/radio) spend• $349,546
• Bank comparisons• All financial advertisers
2008 TV/radio spend: $1,621,798 All advertising: $4,467,299
• Huntington National 2008 TV/radio spend: $205,722 All advertising: $407,465
• Fifth Third 2008 TV/radio spend: $294,719 All advertising: $645,824
This is what we are competing against!
Here’s our impact.
Bank/CU Spending ComparisonFlint media market 2008
• 2009 CU Difference spend• $342,380
• Bank comparisons• All financial advertisers
All advertising: $1,356,592• JP Morgan Chase & Co. (Top spender)
All advertising: $310,796• Fifth Third (2nd highest)
All advertising: $241, 247• National City Bank (3rd highest)
All advertising: $203,048
This is what we are competing against!
Here’s our impact.
Bank/CU Spending ComparisonDetroit media market8/1/2008 to 7/31/2009
• 2008 Fall plus 2009 CU Difference spend• $836,102
• Bank comparisons• All financial advertisers
2008 TV/radio spend: $13,525,867 All advertising: $31,683,737
• National City (Top spender) 2008 TV/radio spend: $2,164,448 All advertising: $4,174,460
• Fifth Third (5th highest spend in market) 2008 TV/radio spend: $1,010,129 All advertising: $2,810,965
This is what we are competing against!
Here’s our impact.
D. Tentative 2010 Meeting Dates
• Tuesday, February 16, 2010• Tuesday, May 25, 2010• Tuesday, August 17, 2010• Wednesday, November 10, 2010
VI. Adjournment
Informational Items