Trust, Service, Savings – The Power of Message Minnesota Credit Union Day at the Capital February 3, 2011

1. Trust, Service, Savings – The Power of Message • Minnesota Credit Union Day at the Capital • February 3, 2011

2. Agenda • Introductions • Key messages – What they are and why we need them • Why key messages work/best practices for delivery • Conclusions/questions?

3. Today’s Speakers • Dave Heinsch – Director • Member of Padilla’s Investor Relations practice group • Nearly 20 years of experience with investor relations, trade and business media, analyst relations, integrated marketing and broadcast journalism • Paul Omodt – Vice President • Oversees Padilla’s Crisis & Critical Issues, Government Affairs and Media Practices • More than 20 years public relations and spokesperson experience Trust, Service, Savings – The Power of Message

4. The Power of Message… • Key messages – precursors to awareness, advocacy and behavioral change • Everyone connected to the credit union needs to be an advocate • Our goals today • Take a few pages from the integrated marketing playbook. Examine best practices for message development, delivery and distribution • Help arm you for articulating the value of credit unions to outside audiences Trust, Service, Savings – The Power of Message

5. Messages Create Focus Focus to meet challenges, capture opportunities • Lack of consumer awareness, unstable regulatory environment and struggling economy present significant challenges to credit unions • The banking industry has taken a big black eye, and the timeline for recovery is still TBD • Consumers and small businesses hold credit unions in high esteem – once they experience one! • Shifting generations, changing consumer purchasing behaviors and other broader trends impact the choice of financial institutions Trust, Service, Savings – The Power of Message

6. Messages Create Focus March 2010 Statewide Research • Many Minnesotans don’t understand the differences between a credit union and a bank • Significant disparity in reputation between credit unions and banks • Public perception is generally positive, but… • Opportunity to educate and market services without having to change public sentiment • Must consistently and uniformly communicate what a credit union is, and what sets credit unions apart Credit unions have opportunity to educate consumers, strengthen industry and gain market share Trust, Service, Savings – The Power of Message

7. Key Messages: What Are They? • The points you want your audience to remember • Calls to action – awareness is not enough! • Themes you can keep coming back to • Major types • Definers • Differentiators • Validators • Situational • Key Messages are: • Memorable • Easily repeatable • Supportable • Few! Trust, Service, Savings – The Power of Message

8. Where Do Key Messages Fit? – The Message Pyramid Trust, Service, Savings – The Power of Message

9. For the States CUs: Key Messages Are Rooted In… Trust: Minnesotanscan trust their local credit unions Service: Professional, friendly, experienced service Savings: Fewer fees, lower rates on loans, higher return on savings • Credit unions are part of today’s financial systemsolutionand are strong contributors to the communities they serve • Members will need to augment the above with additional messages related to their own credit union Trust, Service, Savings – The Power of Message

10. Building Out the Messages: Trust – Safety and Soundness Trust of credit unions • Consumers want their financial institution to be safe, sound and secure – especially in economic downturn • Reassure members that MN credit unions remain healthy, strong, viable and sophisticated financial institutions • Emphasize key messages of safety and soundness: • Operate with less risk • Exist to serve members, not profit from them • Money is backed by full faith and credit of the federal government • NCUSIF insures shares on deposit at credit union up to minimum of $250,000 • Still actively extending credit Trust of banks 29% Q18. How have the recent problems in the financial system affected your view of credit unions? Do you trust them more, less or about the same? Q17. How have the recent problems in the financial system affected your view of banks? Do you trust them more, less or about the same? Trust, Service, Savings – The Power of Message

11. Building Out the Messages: Service RESEARCH FACT: Both bank and credit union customers said that “professional and friendly service” is their #1 factor in choosing a primary financial institution When consumers look for a new financial institution, it is usually because they are: • Fed up with their current institution • Looking for a better deal • Looking for a better way to save and manage their money • Philosophically driven - interested in a cooperative banking model Emphasize key messages of: • Personal touch • Member care • Service to the community Trust, Service, Savings – The Power of Message

12. Building Out the Messages: Savings Best terms and rates on credit cards • In today’s economy, rate shoppers abound • Choice between a bank and credit union can boil down to a “pocketbook issue” • Credit unions appeal to many bottom-line sensibilities • Consumers want financial institutions to be honest and clear about fees and rates Two thirds of Minnesotans don’t know they can get a better rate on credit cards from a credit union. Q20. In general, where can you get the best terms and lowest interest rates on credit cards? Trust, Service, Savings – The Power of Message

13. An Important Messaging Dimension – “Local” as a Proof Point • Remind your customers that you’re part of the solution, not part of recent financial services industry problems • Talk to members and potential members about your track record of helping people like them – their neighbors • Appeal to those seeking personal, friendly service from the “hometown hero” – without the “bank” label • The “farmers market” effect Trust, Service, Savings – The Power of Message

14. Key Messages – Why do They Work?

15. Diffusion Theory Awareness • Before consumers make any decision, they go through a process called diffusion • The goal is to move people through the process as quickly as possible • Different communications tools are more effective in different stages • Current members and potential members may be at different points in the process, so a multi-channel marketing program is critical • Well-developed and supported key messages provide the fabric Information Evaluation Trial Adoption Reinforcement Trust, Service, Savings – The Power of Message

16. Effective Message Delivery The Way We Think Evidence The point, or conclusion Trust, Service, Savings – The Power of Message

17. Effective Message Delivery The Way We Listen “Get to the point!” Evidence (Support the point) Trust, Service, Savings – The Power of Message

18. Here at the Capital – A Messaging Crucible • Authenticity is key • Variety is important • Personalization is imperative • Respect is a must • Office • Time • Different opinions Trust, Service, Savings – The Power of Message

19. Delivering Messages When You Get Challenged • Innocent (aka “dumb”) question • “Left Field” question • Softball • The setup • The absent party • Non-question Trust, Service, Savings – The Power of Message

20. Tactics for Addressing Them • Bridging • I don’t know, but I can say … • Let me underscore the important point … • Let me clarify … • There’s a broader issue … • Strip and Flip • Recognize/acknowledge legitimacy of the question • Remove the negative part • Respond with key message/statement of fact Trust, Service, Savings – The Power of Message

21. Trust, Service, Savings – The Power of Message

22. Trust, Service, Savings – The Power of Message

23. Deliver Your Message More (Not Less!) • Your messages must consistently populate all communications channels, which work together to attract and retain members • Newsletters • Statement stuffers • Presentations • Signage • Collateral • Advertising • Publicity • Social media? • A blended approach is best • Customers need to receive messages from multiple sources before they act Trust, Service, Savings – The Power of Message

24. Projecting Messages Across Channels: A Few Facts… • 26 percent of consumers rely on third-party media for financial information • More than 20 percent of customers age 21-34 go to online news sources for financial information • Nearly 40 percent of all credit union members rely on their credit union newsletter for information • All these channels need to be infused with your key messages Third-party media Q11A. Which source do you rely on most for information about personal financial services, such as checking and savings accounts, loans and mortgages? Which source do you rely on most? Trust, Service, Savings – The Power of Message

25. Word-of-Mouth Marketing Still The Holy Grail • Existing members need to hear/adopt your key messages, then project them • Members are twice as likely to recommend as their banking counterparts • Significant number of consumers rely on friends and family for advice on financial institution • Majority of credit union members have been members for 10+ years Trust, Service, Savings – The Power of Message

26. Conclusions • Key messages matter – you need to have them, and stick to them. It’s up to each credit union to develop its own messages – but from a common framework that supports the industry • Look for the proof points that support your messages within your organization • Understand the basics of how messages are received, scrutinized and adopted • Awareness and Education come first. Differentiation comes second. Call to action comes third. • Repetition, Repetition, Repetition! Trust, Service, Savings – The Power of Message

27. Questions?