Posted by Lisa Hochgraf
Seth Godin posted this pithy statement on his blog recently.
"Maybe the reason it seems that price is all your customers care about is...
... that you haven't given them anything else to care about."
What I've been reading in CU land lately is that credit unions are getting beat out on price by the likes of ING Direct. CU executives even say they can't really compete on price in the long term. Yet we still see plenty of promotions based solely on price. Perhaps the budgets for campaigns based on price would be better spent on identifying and pitching unique products that really fill a market need?
As an example, Redfrog is an innovative mortgage product from $2.7 billion (U.S.) Envision Financial, Langley, British Columbia. While members get the current prime lending rate on every dollar borrowed, that's not the coolest part of this innovative product.
Each month members deposit their income into their all-inclusive Redfrog accounts. Each day Redfrog looks at a member's total financial picture--offsetting various borrowings against the money remaining in the Redfrog account. At the end of the month, Redfrog adds up these daily interest charges and debits the account. In other words, the longer Redfrog account money remains unspent, the more interest members save and the faster they pay down their mortgages. The Redfrog Web site helps members track how they're doing with both paying off loans and saving.
In other words, Redfrog is a product that actually helps members with their finances. Envision Financial has given members a great rate, but also something more that they can care about.
Poster's note: My colleague, Christopher Stevenson, also has been thinking about pricing lately. Read his "Deathly Hallows" post. And learn more about Redfrog in this article from Credit Union Management magazine. And about "money merge" accounts in general (Redfrog is an example) from this post on Robbie Wright's The Life and Times of a Credit Union Employee blog.
