Millennials know functional branding is more than just lip service

Perhaps you’ve seen the latest comedy video that skewers millennials for being overindulged. Comedian John Crist created the fictional Millennial International, a sponsorship program for needy young millennials that allows those more fortunate to provide them with the lifestyle they portray on Instagram. A spoof on sponsorship programs that provide food, medicine and other life essentials for hungry children overseas, the teary-eyed pleas for fundamental needs in the video include luxury beauty products for men and a new Audi.

This video carries an important message for credit union leaders, many of whom are scratching their heads wondering why idealistic millennials aren’t lining up to join their cooperative. After all, don’t millennials seek to make the world a better place? Don’t they consider corporate ethics when making purchasing decisions?

The answers to those two questions are yes. Sort of.

Millennials do care about making the world a better place and they do value corporate ethics. However, they typical won’t sacrifice an emotionally rewarding experience to achieve either. The Millennial International video makes fun of that distinction.

According to a Business Insider article published earlier this year, the most popular millennial brand is Apple. Yes, the same Apple that manufactures iPhones in China, where workers are subjected to numerous human rights violations, and sources African cobalt using child labor.

The second most popular millennial brand according to BI is Target, a notorious union-busting company that has been sued for forcing employees to work off the clock. Number three is Nike, another company with a longstanding reputation for ignoring human rights violations in its Chinese factories.

The point isn’t that millennials are hypocrites or don’t care about business ethics. Rather, they behave more like previous generations than we think, and as such, won’t be wooed to credit union membership on the basis of philosophy alone.

Credit unions need to consider the article’s conclusion: millennials value the functionality of how the brand serves them.

Brand functionality is still a relatively new concept, but it captures what credit unions have tried – and failed – to do for many years. Functional branding delivers a user experience that is not just positive, but also reinforces the company’s values. A key component is that the experience is more than just functional – it must also be emotional.

Take, for example, Apple. The company’s products are revolutionary, but they also have technological challenges (whatever you do, don’t ask OmniChannel co-founder John San Filippo about his Mac OS Sierra upgrade). And, although Apple is often first out of the gate with new technology, it takes less and less time for the competition to rush a me-too product to market that often works just as well.

So why does Apple have a cult-like following? Because it makes users feel cool.

A new iPhone is cool. A Samsung Galaxy gets the job done.

Why is Apple cool? Because whenever Apple creates a new device, campaign or event, it’s always sexy. Even Apple’s identity – the forbidden apple – is sexy.

Target has the cool factor nailed, too. Stores are always stocked with trendy, desirable merchandise. I’m always amazed at how quickly trends appear in Target stores. Holiday decorations look like a Pinterest board. They always have the latest cool beer, wine and liquor. (California Targets have an entire aisle devoted to liquor. Hooray for us!) Clothing choices are cheaper versions of what can currently be found in Vogue. The grocery section carries many of the same items that sell out at Whole Foods.

Shopping at Target doesn’t just make me feel happy – it makes me downright giddy because so many desirable yet affordable items are available in one store.

How can credit unions implement functional branding? The entire mindset of the organization must change. Credit unions focus on delivering products and services, not delivering an emotional cooperative experience. That most members don’t know what makes a credit union different from a bank speaks volumes about the community’s failure in this area.

Food cooperatives, on the other hand, do an excellent job of functional branding. They face the same challenges as credit unions, attempting to deliver similar products as a grocery store, but in a smaller space and with fewer resources. However, they do more than just sell produce and quinoa. Some require members to work a few hours per month at the store, which allows the co-op to discount food prices by as much as 25%. Others provide education on such trendy topics as drought resistant gardening, water harvesting, urban chicken farming and vegan cooking. These classes don’t necessarily sell more products, but they provide an emotional experience for members that reinforces brand loyalty.

Sure, credit unions also provide financial education, but the topics haven’t changed much over the past 40 years. Think back to when your credit union first offered a retirement planning or home buying seminar. Was urban chicken farming even a thing? And if your education only serves as a means to sell more products or services, you’re not any better than a bank.

One of my clients, CHROME Federal Credit Union, understands the concept of functional branding. CHROME doesn’t just sling checking accounts and HELOCs; it exists to help members meet their financial goals. Not the credit union’s goals, but members’ goals; there’s a difference.

CHROME’s mobile banking is state of the art, and includes a financial goal setting and achieving component. The credit union’s blog is excellent; a post this week helps members organize a dream wedding on a budget, using tips learned from a recently married employee. Last year, the blog allowed members to anonymously share the name of a family in need, so the credit union could provide the family with a Thanksgiving dinner.

Weddings. Helping needy families. These are emotional connections CHROME’s brand makes with its members that go beyond financial products and services.

This different mindset is crucial if credit unions wish to attract new members, especially young ones.