Yogi Berra once said of an upscale restaurant in New York, “Nobody goes there anymore. It’s too crowded.” His remark sums up one of the paradoxical elements of branding, which is that brands seek a delicate balance of being exclusive and inclusive at the same time. Rolex charges thousands of dollars for its watches and is certainly an exclusive brand, but they would like more and more customers each year to include themselves as Rolex wearing loyalists. Dunkin Donuts (America runs on Dunkin), charges less than Starbucks, and wants to be seen as the brand for millions of average folks.
In 2012, however, look for some brands to shift the balance a little more toward the Dunkin side of the equation, as in the 99% versus the 1%. This vaguely defined political rallying cry is already having a ripple effect on the marketplace. But rather than the vast middle class versus the wealthy elite, the lines are being drawn to reflect the consumer versus the faceless corporate brand. And brands that find themselves on the wrong side of the consumer army will literally pay the price.
Ask Bank of America. In 2011 their attempt to begin charging a $5/month fee for debit card use was shouted down faster than Donald Trump hosting a political debate. Despite this cautionary tale, last month Verizon revealed just how tone deaf they can be to the mood of the consumer and tried to sneak a $2 convenience fee past its customers for paying their bills with a credit card. The response was a collective, “I don’t think so!” from their customers. Hey, Verizon, can you hear me now?
But for some brands this is a huge opportunity. And I can’t think of a better category to take advantage of the shift in consumer self-perception than credit unions. Once exclusive by definition, now about a quarter of the state’s population or 3.3 million Pennsylvanians are members of not-for-profit credit unions, according to pacreditunions.com. But by no means do those credit unions control anywhere close to 25% of the assets in the state’s banking industry.
And why is that? Credit unions offer lower interest rates on loans of all types, lower cost (or free) checking accounts and higher rates of return on savings accounts and CDs. We can only assume that their tellers and loan officers are just as nice as those of for-profit banks. They may not have as many locations, but many will credit back foreign ATM transaction fees. So what’s the difference? Why do big banks eat credit unions for lunch? I suggest that the difference is almost entirely in the strength of their brands. The average banking customer pays more for the security of a large established bank brand and little else.
Only now, big banks have damaged their own brand integrity by being something less than secure and reasonable in their judgment. Many local and national banks accepted TARP bailouts and have been caught up, rightly or wrongly, in the general distrust of large financial institutions as we assign blame for the state of our economy. Credit unions, though, have a chance to be a shining star in this scenario. They can be the un-banks, an alternative to the callous big banks that try to charge for previously-free services. Credit unions can leverage their inclusiveness to fit the current consumer mood and position their for-profit competitors as the bad guys.
Heck, they don’t even have to do that, because we already think it. Just remind the consumer out there that credit unions have always been the good guys who offer better value, plus you get to be a “member” not a “customer.” The credit unions that like this opportunity will have a great chance to sharpen their brands and grow their business. Ironically, they can succeed at beating the big banks by being less like them, instead of more. In a sense, the credit union becomes the exclusive brand, for the smart (and a little ticked off) bank customer.
The political climate that may drive some companies or organizations to play up their appeal as an everyman brand is just getting out of the starting gate. And I will fearlessly predict that no matter what your political affiliation, you will have had enough of the whole process by October, if not sooner. But within this turmoil lies opportunity for some underdog brands to step up and take advantage. Consumers still vote with their wallets, and in some categories like banking, it will be interesting to see who wins.