Four Strategies to Maximize revenue and build Market Share
By Tony Rizzo
There are two words that have received more press in the past 90 days than in the past two years: credit union. With Bank of America charging a $5 debit card fee, the Occupy Wall Street protests decrying big-banks and even Senator Raichard Durbin advising Americans to “find yourself a … credit union that won’t gouge you,” now is the time to increase market share and solidify relationships with your current members. But as we near the 2012 planning season, a word of caution: be purposeful in your actions.
Given the current economic climate, the goodwill given to credit unions, and the competitive advantage granted (except for three credit unions) by Dodd-Frank, it is important to step back and define the focus of your business before you spend human and monetary resources touting a message of lower price. You first need to either define or hone the strategic purpose of your business.
Remember Economics 101 and Michael Porter? In his writings, he discusses four generic strategies any business must pursue to maximize revenue and build market share. Two of the primary strategies are differentiation and cost leadership. The third and fourth strategies discuss a combination of focus on either cost or differentiation. Unless your credit union has clearly defined whether it will focus on differentiation or cost leadership, it will become stuck in the middle. This is common for most financial institutions as they seek to serve all consumers with a dazzling array of products and services, each typically with a multitude of variations.