CU Difference Committee November 18, 2009 Michigan Credit Union League Livonia and Lansing offices.

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


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


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


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


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


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



Bank/CU Spending ComparisonDetroit media market8/1/2008 to 7/31/2009

• 2008 Fall plus 2009 CU Difference spend• $836,102


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



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

CU Difference Committee November 18, 2009 Michigan Credit Union League Livonia and Lansing offices.

Documents

Transcript of CU Difference Committee November 18, 2009 Michigan Credit Union League Livonia and Lansing offices.