Dec 11 2014

Developing and Executing a Clear Value Proposition: Six Credit Union Case Studies

Establishing a unique value proposition for your credit union is only half the battle. Delivering on this value proposition will require a well-defined execution strategy year in and year out.  As part of a joint research series, the Filene Research Institute and Credit Union Central of Canada decided to identify examples of credit unions with clear value propositions. We set out to understand the strategies infused in these credit unions and then identify the lessons from them that other credit unions seeking to implement a distinct value proposition could implement.

The underlying core of any value proposition lies in an organization defining whether it will seek to be a leader in operational efficiency (i.e., best total cost solution), product innovation (i.e., best products), or customer intimacy (i.e., best solution). A scan of credit unions in the United States, Canada, and Australia sought examples of those above $100 million in assets that had double-digit growth (or near it) every year on average from 2000 to 2013. From that list we chose six for their geographical, size, and operating model diversity.

While the credit unions studied in the report are just as diverse at first glance, there are remarkable similarities in their approaches:

  • Among the six credit unions there have been very few mergers in the past decade (none in most instances), yet they all operate in a market where credit union mergers are a daily occurrence.
  • With a limited exception, the CEOs have come from inside the organization. Most, and especially those with operational efficiency as their value proposition, keep capital very near the regulatory minimum or are in the process of bringing it down.
  • They are likely to use brokered deposits to keep up with loan demand, if needed.
  • Although each credit union has an incentive system in place, none seemed particularly unique relative to other credit unions. Rather, the incentives reinforced behaviors that supported the naturaltendencies of the strategy.

Filene thanks our generous partners for making this research possible. 

Report Number 348