Find Your People: Targeting Niche Lifestyles to Grow Membership

For most of you, when you think about where you live, only one city comes to mind. It’s where you work, rent or own a home, see your family and friends, and engage with your community. For a long time, I assumed my life would fit into this traditional, “settled” mold as well, but I was wrong.

Due to a set of professional and personal circumstances, I decided to embrace what I’m calling a “multi-city” lifestyle, where I rent an apartment in a “home base” city, and take frequent trips to other U.S. cities, where I can visit long-distance friends and family, get a major change of scenery and continue to work remotely. It’s still a new concept that not everyone understands, but it’s starting to catch on. Go on social media and search hashtags such as #digitalnomad and #locationindependent, and you’ll see accounts of remote workers who spend their free time traveling (side note: most of their photos were taken in Bali or some other exotic location, and sadly my travel plans have not become quite that sophisticated). Many industries, such as IT and software development, are hiring full-time remote workers, and the state of Vermont just announced it will pay remote workers $10,000 to move there and make it their home base.

This of course is a biased example of a growing niche lifestyle, but it’s one that credit unions can consider catering to as they look to grow their membership. Every consumer group (potential untapped market for credit unions) has a unique set of financial needs that CUs can meet. The remote worker community, for instance, needs access to their money anytime and anywhere, and may need extra help with their taxes. Some may be seeking a loan to open a co-working space, or even a combo co-working/co-living space (yes, this is a thing – global workspace company WeWork launched WeLive, a shared, communal living space for remote workers. I’m on the fence about it though; a critical Jezebel article called it a way to “trick adults into living in dorms.” No thanks.) Nevertheless, is your CU equipped to keep up with these unique needs?

When we think of an “emerging market,” we typically think of an underserved group, such as immigrants or minimum-wage workers. But it means much more than that – an emerging market can be any group of consumers who share a unique lifestyle or other commonality, and can benefit from a unique set of financial products and services. In a 2017 CU Times article from the Filene Research Institute’s George Hofheimer, groups that credit unions might consider catering to include the LGBTQ community, gun enthusiasts, recreational marijuana businesses, and Lyft and Uber drivers.

For credit unions to survive and thrive, they must continue to acquire more members and increase market share. This issue’s Focus Report on Membership Growth is filled with examples on how to do that, from revamping your brand and boasting about your community involvement, both of which are detailed in “Pros Offer Eight Secrets for Boosting Membership”; developing a tried and true member referral program like BECU’s (see “Test, Learn and Evolve: BECU’s Member Referral Program”); and serving more prime and super-prime borrowers through underserved area expansions, as described in “Credit Union FOMs: What You Think You Know Is Wrong” by CUCollaborate’s Sam Brownell.

And, in “A Side-Effect: Growth by Living Our Mission,” Filene’s Lauren Culp argues that growth happens organically when credit unions embrace their identities. I certainly agree, and would add that it should be part of credit unions’ mission to serve groups that are overlooked by other institutions. If credit unions can really show some of these niche markets that they understand their lifestyles and are there to help, growth can follow.

As Brownell noted in his article, expanding membership doesn’t have to mean serving more underserved consumers. But the underserved – especially those really struggling to make ends meet – still deserve your undivided attention. I recently watched the Netflix “Dirty Money” docuseries episode “Payday,” which focused on the payday lending empire built by racecar driver Scott Tucker, who ripped off millions of Americans through his predatory and deceptive lending tactics and is now sentenced to more than 16 years in prison. I can’t remember the last time I felt such anger and devastation over the actions of a company as I did while watching this episode. The victims of this scheme were simply trying to put food on the table or pay their utility bill, and they were tricked into a cycle of debt through loans with terms that were not intended to be understood by the average consumer. It made me sick to think about what they went through, but it also made me think about credit unions’ mission to offer genuine help to struggling consumers.

The episode also inspired me to take a closer look at the additions to the Payday Alternative Loan program proposed last week by the NCUA. The revised program would do four key things: Increase the maximum loan amount to $2,000 and not establish a loan minimum, increase the maximum loan term from six months to 12 months, require no minimum length of membership to obtain a loan, and eliminate the rule that allows a federal credit union to make no more than three loans to a member in a six-month period.

The first three points – and especially the third – appear to allow credit unions more flexibility and to better meet the needs of consumers. But the fourth raises some alarm bells, as allowing an unlimited number of loans per six-month period could potentially put borrowers into the very cycle of debt they were hoping to avoid at a traditional payday loan shop. The bottom line is, credit unions that offer these types of loans must do so in a way that puts the members’ needs – not theirs – first, be totally transparent about how the loan works and ensure borrowers fully understand the repayment terms.

Whether it’s an underserved or financially well off one, there’s likely a niche group out there that your credit union can add to its membership base, and it’s your job to get the word out about why you should.

Natasha Chilingerian is managing editor for CU Times. She can be reached at nchilingerian@cutimes.com.