CUNA Mutual Group Leaves Credit Unions Behind in Shift to Direct-to-Consumer Strategy
Over the past several months, one of the credit union movement’s longest tenured and historically trusted partners has initiated a quiet shift towards competing with the very credit unions it built its brand on. Via its TruStage Insurance Agency, LLC (TruStage) platform, CUNA Mutual Group has deviated from its focus on its traditional credit union partnership distribution model and launched a competing direct-to-consumer marketing strategy. The move leverages decades of free advertising through 4,000+ credit unions to deploy a new direct-to-consumer model that competes against the very credit unions it has long partnered with. As threats to the credit union movement from consolidation, regulatory burdens, & fin-tech competition continue to grow, CUNA Mutual Group has broken the trust of the credit unions it owes its very success to, putting profits before long-term partnerships.
When Things Were “Good For Your Members and Good For You”
In 2011, CUNA Mutual Group hired Susan Sachatello as the Senior Vice President for their “Direct to Consumer” initiative. Sachatello, a former direct marketer with Lands’ End, quickly effected a change in CUNA Mutual Group’s member-facing strategy for credit unions with the launch of TruStage, a solution “created as a consumer brand positioned to build recognition of the quality, trusted insurance protection made available exclusively to credit union members” (emphasis added). In the five years since, CUNA Mutual Group has deployed the TruStage brand throughout its national network of over 4,000 credit unions, leveraging the endorsements of their credit union partners to build awareness with the credit union movement’s 100M+ members across the country. Even today, hundreds of credit unions across the country are promoting TruStage products as “only for credit union members.”
While CUNA Mutual Group claimed the TruStage program was designed “to continue building deeper member relationships,” Sachatello apparently had other plans. As Jeff Chesky, CEO Of Insuritas noted, “while credit unions selflessly exposed their trusted relationships with their members to promote TruStage products, there was always an inherent risk that in giving a third-party vendor their endorsement, they might to one day enable that third-party to compete against them directly. For credit unions nationally, the thought of CUNA Mutual Group breaking that trust was, until recently, unimaginable.”
Abandoning the Notion of Solutions “Just for Credit Unions”
So what changed?
In short, having spent years mining and leveraging your member data, digital & retail channels, and most importantly, your trusted brand equity, Sachatello understood that the brand recognition you built for them would be powerful enough for them to launch a direct-to-consumer marketing strategy and solicit consumers and members outside of the credit union market.
This direct-to-consumer strategy has rapidly evolved into a national campaign encompassing a variety of digital and physical channels, recently even expanding into local advertising on gas pumps via GSTV.
Why does this matter to you and your credit union?
TruStage has recently carefully added language throughout their consumer-facing website noting that many of the products they offer are no longer tied to credit union membership, yet have allowed their credit union partners to continue to promote the TruStage program as an exclusive benefit for credit union members. In fact, the website you may be directing your members to today educates your members on the fact that they can take advantage of TruStage products regardless of their current or potential membership in your credit union. A recent telephone survey of 20+ senior credit union executives currently partnered with TruStage revealed that not one of them had received any notice from CUNA Mutual Group that TruStage was no longer an exclusive benefit for their members.
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TruStage Leverages Your Member Data for Their Use – Not Yours
This shift represents a breach of trust between CUNA Mutual Group and the credit union movement. The success of their business over the past 80+ years would not have been possible without the active engagement and endorsement of the credit unions they serve. Sachatello has never explained why she has introduced a solution that directly competes with their credit union partners, at a time when, as CUNA Mutual Group notes “competition for your members has never been fiercer.”
And as a final break with the long relationship CUNA enjoyed with Credit Unions, Credit Union executives are now reporting a new shift in their TruStage partnerships; TruStage allegedly is no longer providing detailed monthly reports on the products a Credit Unions’ members buy from TruStage, no longer providing purchaser names, policy purchase details, policies in force, claims made, critical premium, commission and revenue information so a Credit Union can better understand member share and household share, leverage that data with next generation data analytics, and in the spirit of full transparency, understand each party’s split of revenue. Under Sachatello’s leadership, CUNA TruStage has simply chosen to walk away. Consider requesting a complete digital copy of your entire member shopping and purchase data now.
A Better Way Forward – For Credit Unions and Members
The days of legacy third-party product partnership models are over. Every second of every day, you and your employees work to provide your members with best-in-class service, advice & resources for the financial benefit of them and their families. Historically, you may have been dependent on third-party vendors to provide certain products and services to your members that you didn’t have the resources to provide yourself, and you were willing to accept the risk that those partners might not uphold your reputation, or worse, that they might work to supplant your relationship with your member with that of their own.
While this may be the largest (and most visible) example of a third-party “partner” of credit unions doing just that, it is surely not the first, and won’t be the last. Your credit union exists to serve your members, if your partners can’t or won’t embrace the responsibility to exclusively focus on helping you achieve that goal, it may be time to reevaluate whether that partner is a good fit for you, or more importantly, your members.