Don't Just Define Your Market: Dominate It

One of the areas most credit unions misunderstand is market segmentation. Having exclusive SEGs or a community charter-type boundary isn’t enough of a market segmentation approach. You don’t just want to be a player in the market you want to dominate a segment of the market.

Important point: You don’t want to satisfy every member and you don't want everyone to be a member.

I'll bet you read that at least twice because you couldn't believe your eyes. You can't be all things to all members successfully. As I mentioned in a blog entry last week I've seen credit unions offer up to 80 different products and services, no doubt in an effort to try and satisfy every need of their members. This is a wonderful idea in giving great member service but it begs the question: How can you be great at all of those products? The real answer is you can't. It's best to decide which products and services you can excel at and hit the market hard in those areas.

Which is better, to be an adequate option on a wide range of products thus making you a commodity, or to be the best at a select number of options where everyone sees you as the best at those things?

If your members shop your credit union as a commodity then they have little or no loyalty and will shop everyone else as well, which means your members only see you as an option.

When you dominate a market segment through proper positioning as the best in those products, your members and prospects will seek you out as the best in this area. Loyalty is high when members seek you out for specific services. This is how you get to be the PFI for those members.

Good market segments are usually made up of members who think about and buy your products and services the same way.

Ask yourself the following questions:

What are they buying?
Who is Buying
Why are they buying?
How do they buy?
How will they use what they buy?

How you answer these questions will point you in the direction of market segments you may want to hone in on so you can be the dominant player in the market.

-- Russell