Posted by Christopher Stevenson
For years, folks have talked about applying the pain/pleasure principle to marketing and business development. The idea is that consumers must recognize that the pleasure of using our products or services is so great that it makes the hassle of switching service providers worth it. On the flip side, consumers may switch from ineffective service providers to end the "pain." The pain/pleasure principle has always seemed like a sensible concept, but this week I realized just how tough it is to effectively apply it. Here's my story.
I listen to Pandora nearly every day at work. It's a personalized Internet radio service that allows me to listen to my favorite music and find other music I'd never listen to otherwise. I love it. I never realized, though, that Pandora imposes a 40-hour per month time limit on free listening until I ran out of time the last week of July. Bummer.
I did the only sensible thing a guy could do--I went on Twitter and asked if anyone had recommendations for other Internet radio sites. A few friends recommended jango.com, last.fm, and Yahoo! Music. Each day for the remainder of the week, I tried different sites. Most of them had comparable features and easy-to-navigate interfaces. All the suggested sites were well done and I enjoyed each of them.
Then July ended and I went back to Pandora.
Why? I trust Pandora to play music I'm likely to enjoy. It has introduced me to artists I wouldn't have heard otherwise, like Harry Manx, Sun Kil Moon, and Doyle Bramhall. I have a list of about 100 stations that I selected and can listen to individually or as a QuickMix (which is kind of like listening to your iPod on Shuffle). It's comfortable.
It wasn't really a pain to switch. It wasn't a hassle to create my stations on the new sites. But the substitute sites didn't feel quite right to me. Apparently, I have a low tolerance for pain.
I can't help but think that if it's that hard for me to switch Internet radio service providers, how much harder must it be to get consumers to switch FIs for the long term? The current banking crisis has created something of a burning platform for many people. Credit unions have seen an influx of deposits and growth in their loan portfolios, but what happens when everything calms down. Are those new members and existing members who moved their money over during the crisis going to return to the comfort of their banks? Will credit unions be the FI equivalent of jango.com to the banks' Pandora?
It seems to me that this is an ideal time for credit unions to figure out their QuickMix, their secret sauce, and communicate it as clearly and repeatedly as possible. What's your niche that banks can't touch? Maybe it's providing the financial counselling so many people need today. Maybe providing services to members who have been laid off. Perhaps it's your community service or showing how the cooperative business model really benefits the member. Whatever it is, now's the time to make sure your members get it. If they don't, the tremendous growth opportunity of 2009 will be a one- or two-year spike in the credit union's long-term performance rather than a launching pad for future success.
Author's note: After writing this post, I saw this post by Nancy Folbre on The New York Times Economix blog. It looks like in Ms. Folbre's case, she may be a long-term CU convert, resulting in great press for UMassFive College FCU.
