Process Insights • Context • Competition • Customers

The Process

Early on, we recognized we must embrace a challenger mindset that

transcends financial service. We want to give people a reason to care, to elevate

beyond category restraint and to move from a local credit union to a sought

after partner unleashing individual and collective potential.

As with any research project, we sought to reach new conclusions through a

systemic process and to find answers to a set of fundamental questions:

Why do we matter? Why should you matter to me? What do we do? What difference do we make in the lives of those we serve?

Recognizing our skill limitations and our desire to seek experts in the field of research

and strategy, we engaged the services of Corona Insights to become our partner in this

extraordinary journey. The Master Planning process progressed through four phases.

To kick off our process, we engaged in conversation with staff and the board of

directors during October 2019 to hear what we should be attentive to during the inquiry

of our efforts. Several overarching topics emerged.

• The rising expectations among customers for instant communications, security, and

convenience often made possible through advancements in financial technology.

• The new and novel ways in which our customers’ needs are being met by disrupters

outside our industry like Amazon, Uber, DoorDash, and Airbnb.

• The macro-level changes in how people approach the financial health of their

lives, including the growth of the sharing economy as well as the increasing role that

cryptocurrencies play in our lives and the global economy.

The Process Cont’d

2030 Master Plan

A few overarching findings of this exercise include:

• Customers will expect to be able to learn and grow through virtual experiences.

• The short-term future is likely to be heavily driven by changes that occur as a result of

COVID-19. We believe the pandemic will likely drive change in two key areas: customer interactions (through technology) and a poor economy. The former will place an

increased level of importance in interactions and connections with customers outside

of branches, and the latter will drive an increased need for organizations to help their

customers weather the storm.

• The mid-term future is likely to be driven by new competitive entrants finding

innovative ways to serve customers. As the idea of a financial institution continues to

be blended with FinTech solutions, we will need to find ways to either partner with new

entrants to expand our service delivery model or develop solutions of our own.

• The long-term future could be driven by shifting perceptions between generational

cohorts. Younger generations have grown up with technology solutions and have an

expectation that their service providers will supply solutions that can be accessed

anywhere, any time. While this will certainly manifest itself in financial services directly,

it will also impact adult education and financial literacy as well.

2030 Master Plan

After our staff and board of directors helped us shape the foundation of our process, we

realized we would have to look outside of ourselves if we wanted to truly push us into

a purpose-driven future that is relevant, vital, and uniquely Blue. We called our 2019-

2020 master planning process “Leading the Legacy” to link our future to our roots. We

knew the outcome of this process would need to stay true to who we are while inspiring

us to stretch for more. To hold fast to who we have always been, we held the following

statement as the guideposts of our process:

To ensure we maintained an expansive view of our strategic possibilities, we oriented our

process around illuminating Blue’s differentiation—what makes us both different and

special—as an organization in relation to our:

• Context – the trends with the power to influence member decisions and drive

competitor actions

• Competitors – those contending for the heart, mind, and wallet share of our members

Our values unite us Our purpose sustains us The future calls us

• Customers (Members)– the people whose lives we promise to impact through mission

delivery

Insights

The lessons we learned from the unexpected challenges of 2020, as well as the

insights gleaned from our process, emboldened us to foresee a future as the sought-

after lifelong champion our customers value most. As a leader in 2021, we were called

to push beyond our comfort zones and envision a Blue that is data-driven, empathy-

based, customer-centered, and purpose-filled. We gleaned powerful insights and fresh

ideas about Blue’s customers, competitors, and context from these 13 studies:

DEMOGRAPHICS ANALYSIS RESEARCH REVIEW BOARD INTERVIEW MANAGEMENT ASSESSMENT VOICE OF CUSTOMER SURVEY COMPETITOR PROFILES & ANALYSIS INDUSTRY ANALYSIS BEST IN CLASS COMPANY ANALYSIS FUTURE FORECAST FOCUS GROUPS THOUGHT LEADER INTERVIEWS BUSINESS OWNER INTERVIEWS TARGET MARKETS ANALYSIS

Context

Customers and competitors respond to increasing trends and changing conditions. We

focused on those most likely to influence behaviors and drive decisions, with an eye

towards the future. The external context of the world changed drastically and quickly

with the onset of COVID-19 in the spring of 2020. To stay attuned to customer needs,

we hyper-focused our research on the trends and conditions that most influence

customer behavior, such as:

• A paradigm shift related to what “membership” is and what about it matters most to

members

• An increasingly digital future reveals what technology makes possible: a customer-

centered experience characterized by convenience, value, and personalization

• A shift in perception due to COVID-19 that is challenging our assumptions about

the outlook of the economy as well as the ways in which we can meet the needs of

customers in times of greatest need

• An increasing expectation that companies deliver on a deeper purpose; one devoted

Competition

Blue’s competitive landscape is dynamic. Competitors focus on opportunities to

create unique solutions which fulfill customer expectations that rivals cannot match.

We scanned our competitive landscape and learned how competitors are positioning

themselves to customers and meeting their needs. We considered four types of

competitor from a customer’s point of view:

• Replacements -Your customer views your product or service as easily replaceable by

something similar. They may not be able to tell the difference between your offerings and

others, leaving them feeling a bit confused or complacent. Your customer may decide to

stick with what they know rather than try something unknown, until they are drawn to

something new or different.

• Alternatives - Your customer is evaluating their choices 24/7 and 365 days a year as

they explore options that address the thing that matters most to them. They are drawn to

alternatives. Direct-to-Consumer marketing is the domain of the alternative.

• Catapults - What matters most to your customer just landed in their lap, courtesy of a smartphone.

Catapults meet customer needs in new and unprecedented ways through previously unavailable or

unbelievable options. Catapults are a whole new possibility. Yesterday’s novelty is today’s alternative and is

on the path to replacement.

• Community Builders - Your customer craves connections and positive human interactions, especially

in times of anxiety and discord. As your customer seeks to address what matters most to them, they may

consider joining a community. What matters most includes a heart connection in addition to a head-based

logical solution. A sense of belonging expands the customer experience. Many competitors approach

differentiation from a branding perspective and position themselves around being “community-oriented”,

though few genuinely play a community-building role. 2030 Master Plan

We are a Community Builder

WITH A TRACK-RECORD OF GIVING BACK AND STRENGTHENING OUR COMMUNITIES, WE WILL REMAIN A TRUE BLUE COMMUNITY BUILDER WELL INTO THE FUTURE.

We’ve reached a tipping point in the last three to five years in terms of customer

expectations around digital delivery of products/services, and competitors are

responding. Competitors are anticipating customer needs, then crafting deliberate

strategies to imagine new and novel ways to meet those needs. Innovation, market

leadership, and data are cornerstones of their market growth strategies.

Customers

Customers expect comparable experiences, choices, and offerings from the

companies with which they choose to engage. Value-drivers abound from

trailblazers in technology and consumer goods. Companies that don’t keep up can

expect diminished brand loyalty and market share. We learned about the customers

of today: who they are as people, what their aspirations are, what they do and do

not care about, and how they prefer to define their relationships with financial

institutions.

• There’s a strong desire among customers for financial education that goes

beyond online articles and webinars.

• They want accessible and relevant resources to help understand the very real

financial challenges they face.

• In their relationships with a financial institution, customers are seeking

authentic human connections that demonstrate empathy and understanding, as

well as tangible coaching for making financial decisions. Customers are highly

attuned to whether an institution is genuinely connected to the local community;

they care deeply about the role organizations like Blue can and should play in

building and supporting local communities.

• While customers DO care about convenience, accessibility, and having a one-

stop-shop for all their financial needs, they DO NOT care as much about the type of organization that meets their needs (e.g. bank v. credit union v. FinTech application), tax status (e.g. nonprofit v. for-profit), nor the historical roots of an

organization. 2030 Master Plan

2030 Master Plan

Changes to adult education and financial literacy are very likely to happen and

are expected to have a high impact on us. While somewhat less significant,

changes to corporate social responsibility and philanthropy are also important

to consider.

Overall, changing consumer expectations in other industries are likely to shape

our future. The blurring of lines between industries is real and there is much

to be learned from trends in other industries. As consumer expectations shift

across these industries, our strategies will need to shift to serve members

effectively. In summary, our core industry is not expected to drive customer

preferences to the same extent as moves in other industries. Opportunities to

reimagine, reinvent, and rediscover can be found outside the financial services

industry.