VanCity makes itself part of the community

Few credit unions have stood up to battle the major banks for the retail banking customer.And even fewer have implemented an integrated marketing campaign as vast and as well-meaning as that of VanCity.VanCity sponsors and organizes hundreds of events aimed at...

Few credit unions have stood up to battle the major banks for the retail banking customer.

And even fewer have implemented an integrated marketing campaign as vast and as well-meaning as that of VanCity.

VanCity sponsors and organizes hundreds of events aimed at improving the lives of individuals in the Lower Mainland, many of whom one day will become depositors.

Public forums

These events include everything from public forums on public housing to seminars on women’s financial planning, and sessions on how to set up community investment deposit accounts for disadvantaged borrowers.

A subsidiary organization builds affordable housing in lower-income neighborhoods. VanCity also organizes scores of charitable events and funds corporate sponsorships of worthy causes.

The credit union is one of the few organizations to maintain an environmental department which sponsors community projects aimed at improving and benefitting the environment.

While this social role has created a widely favorable image of the credit union in b.c., the image has also been good for business.

Largest credit union

This past summer, VanCity became Canada’s largest credit union, with 200,000 ‘stakeholders’ or depositors.

With 30 branches throughout the greater Vancouver area and serving one in eight people in the region, VanCity posted its most successful year-end in 1992 with $3.6 billion in assets (a 61% increase) and $29 million in pre-tax earnings.

Growth

The credit union has shown a consistent deposit growth of 20%, and a loan growth of 15%. Both its term deposit market share and mortgages increased between the third quarter of 1992 and first quarter of 1993.

Much of the credit union’s success has come during the last 18 months, a period in which the credit union has repositioned itself against major financial institutions.

In honor of its highly successful marketing efforts, VanCity was awarded the province’s highest marketing award from the B.C. chapter of the American Marketing Association – 1993 Marketer of the Year.

Credit union ‘lifer’

The architect of VanCity’s emergence in the retail banking community is George Scott, VanCity’s vice-president of marketing.

Scott is a self-admitted credit union ‘lifer’ and avowed market research advocate.

He took over the job at VanCity in 1991 just as the major banks were beginning to pay attention to the retail customer.

‘Traditionally, the banks did not care about the retail customer,’ Fox says.

‘However, we saw they were beginning to compete with interest rates, long-term mortgages and personal business planning, all aspects of the business that would make ours a tougher business,’ he says.

Effective image

Scott found that up to 1990, VanCity had built an effective image through its corporate social role as a place that provided credit for people who were not being served by the traditional banking sector.

VanCity’s ‘good guy’ image took aim at the traditional banks’ lending policies, which included lending money to international big business conglomerates and foreign governments.

VanCity, by comparison, lent money back to the community in which its depositors lived.

Despite the good feeling that VanCity had generated, its membership was flat.

Scott was also alarmed by something he saw in the research conducted before his arrival.

‘We found that our sustainable competitive advantage – our commitment to the community – only worked when it was supported by a perception of technical competence equal to that of banks,’ he says.

The first step Scott took was to conduct an audit to determine customers’ selection criteria.

He followed this with a competitive analysis to watch the trends and gauge public awareness of the credit union’s principal competitors, including the cibc, Bank of Montreal and Royal Bank.

Scott then came up with a couple of positioning statements to be tested in the market, adding it was, as it often is in research, an arduous process.

‘We wanted to make sure the message was credible,’ he says. ‘If you’re wrong, it’s likely to have no effect, but it could have a negative and damaging effect.’

Scott’s research found out there were four image barriers the credit union had to overcome.

The first was that many potential customers revealed a perception that VanCity lacked locations for convenient banking.

There was also the perception that credit union employees and services were less efficient than those of banks.

Others were concerned about the security of their deposits, and did not understand what constituted membership in a credit union.

Also, people were uncertain that VanCity offered the same retail products as the banks.

In response, Scott and his team built the positioning theme: ‘Because you, as a member, expect it, at VanCity, we set and achieve higher standards.’ The tag line remained the same from the earlier campaign: ‘We’re VanCity.’

The task of taking the positioning and creating an integrated awareness campaign was given to Grey Advertising, VanCity’s ad agency in Vancouver since 1976.

‘Our image campaign had to work on two levels,’ Scott says.

‘First, it had to show potential customers the hard aspects of doing business as a financial institution, and then it had to show that we can live up to people’s higher expectations of us because of our corporate social role,’ he says.

Knowing that VanCity ‘owned’ the friendly image, the agency created a professional look and feel with its print ads and three 30-second tv spots to stress the accessibility question.

The spots feature VanCity’s many new services, including telephone banking, debit and credit cards, trust services, mutual funds, investment services and atm cards, which can be used at any location across Canada.

The commercials also addressed the competency of VanCity employees by stressing high service ratings and quality of service ratings, as well as mentioning its insured deposit insurance and its low loan-loss record.

The commercials strongly reflect the credit union’s social role.

The script for one spot says: ‘Imagine, if every time you made a financial transaction, you open doors for people, doors to community health care, housing for single parents, funding for the environment and special projects for new Canadians.’

The $3-million advertising and promotion campaign launched with an eight-week flight of commercials in the spring of 1992.

This was supported through a full media mix of outdoor, print and radio.

Post-run testing of target customer response assured Scott the right message was getting through.

Another flight of commercials was launched in the fall. Again, target customers revealed a 50% recall for awareness and content of the commercials.

When compared with an earlier survey in 1988, VanCity had markedly improved its position against Royal Bank, Canada Trust and the Hongkong Bank of Canada.

At the same time, VanCity is stepping up its media relations efforts by publicizing the many community projects its undertakes.

While the image-building and positioning of the credit union has been successful, Scott stresses that image is something that cannot be left untended.

‘Every time you send out a message – assuming it is received – you are saying something about your company that confirms or denies what the recipient perceives to be true,’ Scott says.

‘Or, as we did, you may find out you are not addressing the key issues at all,’ he says.