RESEARCH METHODOLOGIES This study employs exploratory in-depth interviews, ethnographic field study with credit union customers at home and at their credit union branches, and questionnaires that examine the auto-loan decision process. Formal analysis (quantitative) of survey results, interviews and the field study reveal and triangulate results that offer actionable insights. Approach: Depth interviews with credit union members to reveal what leads to the choice of credit union auto loans rather than other service providers, development of themes. Distribution of a 7-minute online survey through seven partner credit unions (both open and closed membership, geographically and demographically diverse). The survey focused on the types of interactions and communications members have with the credit union (e.g. frequency of in-person branch visits, frequency of online logins, marketing message recall, SERVQUAL indicators), in addition to addressing themes that developed from the depth interviews (including sense of community). Interview of credit union staff about their perspectives of the auto loan process and about credit union customers auto loan needs.
THEME 1: TRUST Hannah, a 42-year old homemaker in an upscale community in Northern California talks about her lived experience with credit unions as compared to banks, and the trust that emerged and mattered to her in choosing a credit union auto loan: I trust them. One time when I was on vacation I forgot to take care of some autodeposits and transfers. A loan payment wasn t going to go through a lot of other stuff. They CALLED me. And fixed it! I ve been on the other end with a bank. A hundred fees and charges. It was like that s how they make their money. My credit union looks out for me, it really feels like that.
THEME 2: SERVICE Credit union members who choose the credit union for auto loans, indicate their appreciation for the personal service experienced at their credit union. Candy, a school principal in Southern California gives a good analogy for the feeling members have about their credit union service: Think about it. I like Nordstroms and Starbucks. My credit union is like walking into Nordstroms or Starbucks. Someone greets me. It s low-key, it doesn t feel stressful. I know I ll be taken care of.
THEME 3: RELATIONSHIP The relationship our respondents had with the credit union played a large part in their auto loan decision processes. As this member stated when asked why she chose the credit union for her car loan: It s just easy with them. My accounts are there, I can just call them and they have all my info and so I don t have to fill any extra information out. I don t know all my account numbers but they do! Why would I go anywhere else? They know me. Harriet, 30 years old, Southern California
CREDIT UNION COMMUNITY Many of our respondents articulated in one way or another their feelings of being a credit union person. For some, the credit union s mission resonated with them. For others, they felt the credit union s values aligned with their own. Still others liked being associated with the image of what the credit union stands for. For others, it was purely a case of wanting not to be with a traditional bank: I was having kind of a crisis about going from the Zip car low carbon footprint to my own. But I had to get a car to get to job interviews and internships since I m graduating. It felt better to talk to the credit union about auto loans. I don t know why. They aren t an evil bank. Jarrod, 22-year old, Orange County
DISTRIBUTION OF RESPONDENTS CHOICE FOR AUTO LOAN PROVIDER WITHIN LAST TWO YEARS: Bank 9% Car Dealer 19% Car Dealer Credit Union Bank Relative or Friend Other Credit Union 71% Credit union was the top loan provider choice, chosen by 71% of respondents (n=2,629) for an auto loan within the last 4 years. Car dealers were the second choice, chosen by 19% of our respondents (n=678), and banks were third at 8% (n=288).
COMMUNICATION MATTERS 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Mean 1-5 Importance of Communication Methods No CU Loan CU Loan Email and web site very important
CONCLUSIONS Work to increase the already high percentage of existing credit union members who choose credit unions for their auto loans, by targeting web site and email. Market credit union membership to the broader financial marketplace with a focus on the unique and valued qualities that resonate with credit union members: trust, service, and satisfying relationships. Market the co-created credit union community and the value of shared ownership. Prequalify members before car-shopping so that they do not have the anxiety of not knowing whether they will qualify or not. Partner with car dealers so that the choice to use their credit union is as easy as the car dealership s own loan application process Continue to both provide low interest rates, and market that fact.