Credit union name changes prove controversial
Posted by Trey Reeme on January 17th, 2007
Former FCC Commissioner and current Professor of Law at the University of Iowa College of Law Nicholas Johnson weighs in on the Optiva name change on his blog FromDC2Iowa.
On today’s post Professor Johnson writes, in part:
In short, this is not the case of a new start-up company searching about for a name into which it hopes it will be able, over time, to blow some meaning and positive customer response – such as Kodak did. The UICCU already has that meaning and customer response. What it is proposing to do is to shoot itself in the foot by hauling out to the city dump what has cost millions of dollars and nearly 70 years to build, and start all over from scratch with a new name.
I’m going to turn back the clock here and quote from Brent’s take a few months back. He wrote the following on the Stokefire blog where a riveting discussion occurred about the Optiva and Red Canoe name changes. Get caught up on that discussion, too.
Brent said:
Any name change has got to start with the membership. Is a change going to improve the member experience? Is the prospective name more reflective of the current brand than the current name? I’d agree with Denise that irrelevant naming strategies revolving around more eyeballs and pockets in the member roster is a bad call – it may create some quick growth and awareness, but its not sustainable. And if there’s one thing credit unions need to be thinking about right now, its sustainability.
I also agree that a ton of credit unions out there confuse growth with sustainability. Trying to “outbank the bank” is a fundamental error that’s going to jack a lot of credit unions up down the line. Seth Godin explains it better than I can in his blog post (and book) Small is the New Big. Big banks realize this, it’s way you see more human campaigns (WaMu making fun of big bankers, Citi’s “live richly,” Wells Fargo’s two blogs) and products/services (B of A’s “keep the change,” Citi’s “dial zero”).
By the same token, there are a ton of circumstances in which a name-change away from that of the initial sponsorship makes a lot of sense. Having two inconsistent brands built around one name can create some serious dissonance in the market. And while yes, a parent company name does have a strong emotional SEG connection built-in, there’s a strong case for a credit union building a strong brand and emotional connection independently that revolves entirely around who they are and what they do.
When does a CU name change make perfect sense and when does it make a mess?
V, I don’t know where I land on this. I think dropping “credit union” from a name definitely raises some awareness issues. That said …
Are credit unions being held up by keeping the words “credit union” attached? If consumers largely get confused by the words “credit union” (can I join? do they offer everything a bank does? what’s the difference? etc.) why are we married to the term?
Denise, Great example – I totally agree, Addison Avenue is one of the best name changes a CU’s ever undergone. It reflects the heritage in a witty way, and it was brought on by external events.
Name changes for any business are a mess when the purpose and goals of the renaming are not apparent.
Given no reason for the change the consumer base is going to react negatively.
Just curious – but do any of you enjoy change of any sort just for the hell of it? Sure it may make life interesting, but it also means that you’ve got to take the time to relearn something.
If the reason for a name change isn’t made apparent by the leaders of a company then someone somewhere hasn’t done their job. (It’s probably someone in my industry.)
Tate,
I LOVE your question about change. It smacked me up side the head to be honest. I don’t want to be one of those grumpy old folks pounding my fist on the table saying “Well, in MY day….”
I guess the difference between a name change of a credit union and say, a telephone company, is the emotional connection. There are grumpy old men that actually REMEMBER when the credit union was a shoebox in someone’s desk at the plant. And so you mess with that history and you’re gonna hear about it. Especially in Iowa.
You are exactly right on your last point. SOMEONE is not explaining in real terms WHY the name is changing and why the heck it’s changing to Optiva, or Kinecta or Unitus or Veridian.
I think we need to respect the history of these things called credit unions. They were unique in their day. It was true community and volunteerism. That’s why people’s panties are in a wad over this.
And back on the “does the name need to include Credit Union” question from Trey…
In my opinion: The “official name” can include “Credit Union” – it can even include “Community” if you want… But the trade name needs to be short & sweet…
In at least one example: “Federal Credit Union” in a town with a strong military population was found to imply that you had to be a federal employee, etc. to join… So cutting that phrase from the “trade name” used in advertising was seen as a good move.
Another example: WaMu may advertise as “WaMu” – but in their legal they are still “Washington Mutual Bank.”
To Tate: Yes, I enjoy change for the hell of it—when it happens to my competition, that is. Cuz it screws them up for months. (When it happens to me, well, that’s a different story).
But seriously, re: Brents comment posted by Trey: I wish he had been more specific when mentioning the “membership”. Namely, “today’s” member and “potential future” members.
If the CUs current name is a liability for attracting members in the future, then a name change must be seriously considered.
Does it have to include the words “credit union”? It depends—on the strategy and branding objectives of the firm. If you can’t articulate those… then you can’t answer the question.
I’m shocked! No update on the re-vote?
I was all set to link to your story, even. I’m mentally hoarding the hits you would’ve gotten from it.
Both of them.
And when does a “trade name” make sense..
I think part of the trend toward rebranding is the recognition that: as “WaMu” is understood to be a bank, can’t “Red Canoe” (and other CU trade names) be understood to be a credit union… Without having to say Red Canoe Credit Union in every tag line of every spot.
If you are a community chartered credit union – do you have to say “Community” in your credit union name, or can that too be understood by the consumer?
I know I’ve said this before—but what the heck, I’ll say it again.
In a nutshell (my views on CU name changes)—IF you HAVE to change your name, because of pressure from your sponsor or confusion in your marketplace AND you have a good reputation and a rich history and want to preserve it, a good naming agency should be able to come up with a name that has some meaning, some tie to your roots.
Best example: HP Credit Union to Addison Avenue. During the HP Compaq merger the credit union chose to sever some ties with the sponsor BUT did not want to erase their incredible history. Addison Avenue is the name of the street where Hewlett Packard started it all. To the general public it’s a good name, doesn’t mean much. To HP alumni it’s cool.