“Membership growth trends are definitely in decline,” said Filene Research CEO Mark Meyer. “Also, as the definition of 'community' has changed, from employer to city and now to like interests or social network, credit unions have been slow to adapt on how to reach these changing communities.”

Reports of membership growth from state CU leagues vary. The Michigan Credit Union League showed a 0.1% gain in total number of credit union members in the state from December 2010 to March 2011; the Kansas Credit Union Association reports a 4.03% membership increase from the first quarter of 2010 to the first quarter of 2011 (along with a 1.94% decrease in the number of credit unions).

Credit union membership in California declined by 3.63% from the end of 2009 to the end of 2010 and by 6.74% in Nevada during the same time frame, the California and Nevada Credit Union Leagues reported. The New Jersey Credit Union League cites a membership decline of 2.6% from March 2010 to March 2011.

One key to Municipal CU's success was a back to basics marketing campaign, the CU said.

“We let people know that we can help them save money, and that it's a no-brainer,” said Ken Currey, Municipal CU's vice president of business development. “With the economy being so bad, we had to get back to basics. We just really spoke the truth about what members needed to do in this tough economy.”

Municipal CU's promotional campaign focused on how its products could boost members' savings, especially in comparison to commercial banks, which began hitting customers with rising fees at the time. The CU's member growth efforts included placing television ads, increasing its involvement in the community and sending the message that its advertisements contained “no fine print.”

“It was about getting our name out there,” Municipal CU Vice President of Marketing Steve Kibitel said. “For our business model and for what we were looking to achieve, we've done really well with member growth.”

Another CU reporting positive member growth is the $1 billion, 86,552-member, Spokane, Wash.-based Numerica Credit Union, which doubled its membership from 2002 to 2010. From 2008 to 2009, the CU added 4,358 members, increasing membership by 5.4%, and from 2009 to 2010, it signed 6,381 members, increasing membership by 7.4%, Executive Vice President Jennifer Lehn said.

Lehn explained the CU made a number of changes to help increase membership as economic conditions evolved. For example, she said since the majority of new members join based on recommendations from friends and family members, the CU strived to maintain excellent service.

A diverse approach to lending has also spurred member growth. Lehn said Numerica focuses on four types of loans–consumer, indirect, mortgage and business services– and that mortgage officers succeed at bringing in long-term members. The CU also boosts membership by lending to consumers with less than stellar credit.

Lehn said the CU also has four business development officers who acquire and work with select employee groups and regularly measure new membership from each group. She also noted that since 2002, the CU completed eight mergers and increased its number of branches from six to 17.

“It's difficult to say what has worked the best,” Lehn said. “New branches work in tandem with select employee group efforts. Indirect lending can bring in large numbers, but these are difficult to make stick.”

Credit unions face the unique challenge of marketing to several hard-to-reach demographics. Myer said these include Gen Y, many of whom lack knowledge of credit unions, the “inertia stuck banking member,” who may praise credit unions but not actually join one, and baby boomers, who are moving their nest eggs out of credit unions upon retirement.

To reach these groups, CUs formulate targeted strategies. For example, Numercia CU created a section on its website especially for Gen Y, which features promotional activities such as a money-related video contest.

CUs that do succeed at membership growth enjoy direct impact on their bottom lines. Municipal CU's assets and member funds increased by $76 million in 2010, and earnings on its MCU Visa credit card increased by $8.8 million in 2010. Kibitel added that member growth resulted in increased revenue from mortgages and personal loans. Lehn said Numerica CU's return on assets since 2002 have been “strong to outstanding.”

Myer added that a slow, steady membership growth approach is best for a CU's overall health.

“Nothing else–not assessments, interchange or business lending–is more important to the long-term health of the credit union than membership growth,” Myer said. “But blockbuster membership growth is probably not the right goal. Instead, a strategy that produces 2% and 5% membership growth consistently every year is a good sustainable way to grow.”