Young and Free, this young people's social network Web site launched first in Alberta in June 2007, has jump started 2,600 new checking accounts and $3.4 million in new deposits for Servus Credit Union, a cooperative financial services company that offers most services like a bank.More encouraging data: an additional $17 million was lent to new account members, and $1.4 million is generating 15% yield from mutual fund. That is, using the Servus's 3-year bank loan rate 4.15%, there is an interest income of $705,500 and return from mutual funds of $210,000. The cost to run the Web site, including operating expenses and fees to the marketing company, is $630,000 for the last 19 months.
Return on investment: 45%.
Wonder why?
Imagine if all your friends have a pair of Nike sneakers, would you want a pair too? Very likely. This is what Young and Free does to its members. It takes an image of a social network, filled with fun activities. Members create blogs, share videos and exchange new ideas. Some members say: Young and Free is everything I want.
Once the members are there creating content and actively take part in the Web site, they are ready for a leader. This is where the spokesperson comes in. In each Young and Free Web site, respectively in Alberta, Texas and South Carolina, a month-long campaign started to search for an annual spokesperson, who is "the voice of Young and Free 2009." The winner is an overnight celebrity, a community star that every members like and trust.
His/Her job is to create five blogs a week to entertain the members. The content subtly incorporate the concept of Credit Union. What is it? How does it work? Why is it better than a bank? His/Her benefit is $36,000 annual pay, a free Mac Book, a HD video camera and a car with Young and Free logo.
Now the "peer power" comes into play. People want to hear advice from friends, especially the ones that they like and trust. The more members sign up to the Credit Union's checking account, the more people want to sign up.
The last but the key thing about Young and Free is, quoting its inventor, president of Currency Marketing, Tim McAlpine: "Everybody is talking about creating conversations online. When it comes to sell products, it is taboo. We have the product right in the Web site. I am selling the product, but very subtly."
Direct to the point, sell the product! And there they go, an old-school Credit Union is the new black. The name relates to youth, to fun, and to hip.
Only the members of Young and Free should be aware: The name of the Web site should really be Young and Not-Free.
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Hi Jodi,
ReplyDeleteThanks for the interview and for writing this review of Young & Free Alberta. I was confused with your ending "Young & Not Free." Are you concluding that the credit union is actually taking advantage of young people? If so, that is not true.
Credit unions are not-for-profit financial institutions and offer higher interest rates on deposits and lower interest on loans compared to for-profit banks. The problem with credit unions though is they are very under the radar and young people just don't know about the advantages. Young & Free is designed to get the word out.
Young & Free has three goals. 1) Giving young people voice. This is done through a Young & Free Spokesperson who's charged with listening to what young people really want and need from their financial institution. Over time, the partner credit unions will learn from this feedback and introduce new products and services for this group. 2) Giving young people a head start. This is done by offering a free checking account that is better than any other competing account in the local marketplace. It is in fact totally free with no hidden charges. 3) Giving young people useful information. This is done by demystifying finances through videos and blog posts.
Hope this clarifies things for you.