In 2014, craft beer accounted for 11% of sales volume and grew by 22% taking a giant chunk from big brands like Budweiser.

We face a similar market share battle. Right now, the largest 100 banking institutions account for 74.8% of the nation’s total banking assets. Community Banks have 18.2% and Credit Unions 7%.

Lets be artisan banking!!!

I have a new mantra, “Not being an asshole is good for business.”

A good friend, and quite possibly this blog’s most loyal reader, sent me an article this morning and suggested that I write about it. The fact that the article was about beer caught my attention … that the focus was craft beer got me excited … the obvious tie to what YOU do made it a must-write.

The article is Don’t Beat ‘Em, Join ‘Em: Why Brewing Together Works Better in the Craft Beer Industry, written by Corie Brown, Contributor. It first appeared in the September 2015 of Entrepreneur.

My new “good for business” mantra was so eloquently crafted by Lenny Mendonca of Half Moon Bay Brewing Co.  He’s talking about the fact that craft brewers work together, collaboratively, to be successful and provide a better product.

When I graduated from the University of Kentucky in 1995, I went straight into a MadMen style ad agency (another direct tie to drinking, but that’s a story for a different time). For six years, I molded the brands and increased sales for practically every kind of industry … except banking. When life’s wandering road brought me to a credit union office with “VP, Marketing” on the door, I wasn’t quite ready for the culture shock. I soon met other CU marketers and they started sharing information: “How did that checking campaign go?” “What group is getting the most car loans for you?” “Have you done anything that works for Home Equity?”

My mind was blown. These people, all working in the same industry, in the same damn town were sharing vital information. In ad agency world, this was treason! I would have my tongue ripped out by the root and my lips sewn together to make an example of my stupidity if I had shared this intel.

There are similar stories in craft beer world, too. The following is a direct excerpt from the Entrepreneur article:

“When Adam Avery of Avery Brewing Co. in Boulder, Colo., and Vinnie Cilurzo, owner of Russian River Brewing Co. in Santa Rosa, Calif., discovered they both produced a beer called Salvation, they joined forces to create one they called Collaboration Not Litigation Ale. Such joint craft beers are common.”

I love it! Collaboration Not Litigation! Perfect!

And this is why it’s important to you.
In 2014, craft beer accounted for 11% of sales volume and 19.4% dollars in the beer market. That same year, it grew by 22% taking a giant chunk from big brands like Budweiser.

We face a similar market share battle. Right now, the largest 100 banking institutions account for 74.8% of the nation’s total banking assets. Community Banks have 18.2% and Credit Unions 7%.

With craft beer, it is the cooperation that fuels the growth, not the other way around, and we need to do a better job of following their lead.

The article details that, “Scale, discounts and uniformity are the hallmarks of successful big brands.” As smaller, more nimble, more personal alternatives, we can all do better.

We have a common enemy, folks! Those of us in the bottom 25% of market share need to stop nibbling off of each other’s pies and start carving from the top 100 banks. If a little info and resource sharing is what it takes, so be it. Let’s focus the fight.

Credit unions seem to have the jump on cooperation, but it certainly is not across the board. We recently helped to rename Central Florida Postal Credit Union. With their reliance on postal workers, their community charter and their dedication and reputation for service, the obvious name choice was Priority Credit Union. It links to Priority Mail and it promises a level of member-service. We performed our due diligence and found Priority CU, a $9 million institution in Russellville, Arkansas – that’s it. We also noted that there were three Priority One Credit Unions, one was in Florida, but 208 miles away, a three-hour drive from footprint overlap. And being only $81 million in assets we saw little chance of Priority One migrating three hours North to cause brand confusion. But sure enough, soon after launching the brand, a letter came form an attorney. They didn’t seem concerned about the other TWO Priority One’s, in California and Texas, with identical names, just us. So much for “Collaboration, Not Litigation!”

Cooperation and Millennials
Millennials, we all need them. They are the one’s undergoing the most significant life changes: new careers, first homes, getting married, having kids, buying cars every few years. We need them and they need us … smaller, community-oriented financial institutions that can helped them better save and borrow money.

The good news, they love the idea of us …  though they may not yet know it.

“Local, craft, cooperation, individuality—these are Millennial values. They see their personal values reflected in craft beer and every other small-scale artisan product on the market. It’s not so much anti-corporate as a search for authentic products that speak to them. Knowing who made what they eat and drink—that’s craft.”
~ Mike Kallenberger, a former Miller Brewing executive who now consults with craft brewers

Mike’s right. If you want Millennials, you need to keep it real. Adriot Digital conducted a study of 2,000 consumers age 18-33 in January of 2014. Among their finding:

  • 38% of Millennials will switch brands if a company is found to have bad business practices —ethics matter to Millennials. Outside of financial factors, a business found to have bad business practices is the number one reason that Millennials will switch brands. This carries the same weight as a recommendation from a friend, at 38%.

We have the edge on big-brand-banks:

  • Most community banks and credit unions are, indeed, authentic
  • We operate under better business practices than most big banks
  • We will change based on consumer opinion
  • We are more about the consumer than the brand itself

The only reason we’re not drowning in Millennial new business is because they simply don’t know about us.

When Filene Research asked the perception of credit unions among Millennials in a recent survey, nearly 46% had no reasonable answer: “I don’t know about them.” “I don’t use them.” “Why bother?”

Only 18% had a rational, but mostly inaccurate, perception of CUs as less convenient or less sophisticated.

The study also suggests:

  • Technology isn’t enough to impress
  • Social media is crucial for engagement
  • Focusing on price will cost you the game

So, we know they need us, we know they want our values and we know that they don’t know about us. We need to stop focusing on the “we’re cheap” story and take a sip from the craft beer mug: We’re local, we’re individual, we’re authentic.

When I walk into a restaurant, my first question to the server is always, “What craft beers do you have on tap?” And I’m clearly not alone in this. If a band of super-small breweries can gobble-up market share from Anheuser-Busch, we can certainly band together to take from the top 100 banks.

My suggestion to you? Get out today and “sample” a craft beer. Then determine what story you want to tell about your community bank or credit union.

Lets be artisan banking!!!

In addition to being a bank and credit union strategic consultant, MarketMatch also has nationally and internationally requested speakers. Contact us to bring our marketing ideas to your institution or next conference.

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