Jan 01 1995

Marketing Credit Union Services: The Role of Perceived Value

Report  
Number  
15

This study examines important perceptions and motives that contribute to the relationship between a credit union and its members and discusses how credit unions can use these perceptions and motives to create stronger ties with their current membership and recruit new members.

Peter A. Dacin
Texas A&M University
Report Number 15

Executive Summary

Professor Dacin uses the concept of “perceived value” to show that consumers choice of financial institution is based on their assessment of the entirety of the benefits received for what is given, not merely on price or cost.

By focusing on the tangible attributes and intangible associations of financial institutions that influence individuals’ choice of a credit union over another type of financial service institution, credit union managers can create effective, targeted marketing campaigns based on the perceptions and motives of various groups. Identifying which unique dimensions are important to promote and how best to promote them can lead to marketing campaigns that are relatively resistant to attacks from competitive institutions vying for the same consumers.

What is this research about?

This study addresses three questions that are important to credit unions:

  • What are the important perceptions and motives that contribute to the relationship between a credit union and its members?
  • How do these perceptions and motives differ between members who actively use credit union services, members who use some other type of financial institutions as their primary financial institution (PFI) and potential members who use some other type of financial institution as their PFI?
  • How can credit unions use these perceptions and motives to create stronger ties with their current membership and recruit new members?

What are the credit union implications?

It is clear that credit unions are adequately fulfilling the needs of members identifying credit unions as their PFI but not the needs of members identifying other financial institutions as their PFI and nonmembers who know they are eligible for credit union membership. This presents a window of opportunity for credit unions. It indicates that there are many members and potential members whose financial needs are not being fulfilled and who might be convinced to switch to a credit union as their PFI if more attention is given to their concerns.