By Tim Daley
How many credit unions could confidently say they employ a common approach to their new product decisions? I’m inclined to think not many.
While many credit unions have ventured into new retail and business services over the past several years, there’s a good chance these new undertakings are not getting the attention and focus they need to be truly successful. This could be, in large part, because the ventures were not sufficiently analyzed prior to launch to accurately gauge whether there was, in fact, a market need and whether the credit union could, in fact, effectively support the effort once it was in place.
Entering a new market is a two-step process. First, the credit union decides in which segment, or niche, it will compete. Then, it develops products and services aimed at the needs of that market. Sounds easy, right? It is important to keep in mind, however, that these products must fully align with the credit union’s strategic goals and philosophy or they will never ring true with new members.
Although finding a niche may sound difficult, answering three questions can help a credit union assess the viability of a new market opportunity.
Now that the niche market has been selected, it’s time to develop products and services to meet that market’s needs. Applying a series of filters will ensure the likelihood of success for the new products and services.
- Is the product in line with the credit union’s philosophy and strategic plan?
- What is the expected adoption rate of the product? Have those expectations been tested?
- What is the competition doing? Is the proposed product a differentiator or a "me too" product?
- What is the profitability of the credit union’s current products? Will the new product replace or complement an existing product?
- Will the credit union’s sales force be able to sell the product? Is the product too complex?
A new niche opportunity should fully coincide with a credit union’s strategic direction. Some careful up-front planning will greatly improve the venture’s chances of success.
Tim Daley is a senior consultant with CUES Supplier member and strategic partner Cornerstone Advisors Inc., Scottsdale, Ariz.
Cornerstone will speak in detail about product management at the new CUES School of Product and Channel Management, Sept. 28-29 in Chicago. To save $50 on registration, scan this QR code with the free i-nigma reader on your smartphone:
