“ Providing Strategies for Success ”. Growing Against the Grain: Best Practice Credit Union Thrival Strategies Utah League Annual Meeting March 14-15 th , 2014 Presented By: John A. Vardallas CAE,CUDE Professional Speaker/Business Strategist
Growing Against the Grain: Best Practice Credit Union Thrival Strategies
Utah League Annual Meeting
March 14-15th, 2014
Presented By: John A. Vardallas CAE,CUDE
Professional Speaker/Business Strategist
Founder/CEO TheAmericanBoomeR Group
The Green Bay Packers
The Green Bay Packers
UW Credit Union
Uncertain Future Times
Total Credit Unions: 6,500+
Total CU Branches: 21,000 +
Total Membership: 96,000,000+
Total Assets: Surpassed $1 Trillion Milestone
Lingering Bank Transfer Day effect?
Pull back by the competition?
Credit unions’ approach to serving their member owners?
Consumers using different criteria when selecting a different kind of financial institution?
Data as of December 31
Source: Callahan’s Peer-to-Peer Analytics
LETS TRAVEL DOWN THE COMPETITIVE FINANCIAL SERVICES HIGHWAY
10% Market Share out of $63 Trillion Total Fin Services Industry
-- Banks/Prosper.com/Lending Club/KEVA.com (PTP online lending/borrowing .coms) Western Sky Financial/Cash Net.com
-- Finance/Insurance Companies (GM/Ford/State Farm Bank/Allstate/USAA).
-- Mutual Funds/Brokerage Houses/H&R Block.
-- Retailers/Card Companies/Wall Mart/Home Depot.
-- .com Orgs (Lending Tree, National Mortgage, Car Quest, My Card.com, ING Direct, etc).
-- Pawn Shops/Quick Cash/Pay Day Lenders/Campus Cash/ Check Cashers/Money Stores.
What Do They Want? Your Members Business!
Let us Count the Ways….
by Members (Wallet Share)
(Sales from Insurance/Fin Products)
Theodore Levitt management expert
Can we create our “Blue Ocean” for…..
The Lifeblood of Strategies…Credit UnionsFocus on being a Member Centric CU because Members are the Source of All Prosperity
More Customized Products– I want to see products designed/crafted to my needs!
Personalized Marketing– I’ am tired of zapping through the same old information. Send info about products I want via e-mail, web site,cross sell, newsletter, I don’t care. If its news I can use I’ll pay attention.
No Excuse Service– Train your people to respond to my concerns as if they were the most important things in the world. Ban the phrase “Its not my dept”. Wow me at every chance you get to serve me.
One Stop Shopping– Make it easy for me to interact and do business with you in person and online 24/7/365.
Rapid Change– Don’t wait to make these shifts….
I’ am already shopping your competition!
Offer A “CU Welcome On-Boarding Packet”:
-- Welcome to Our CU Family Letter signed by CEO/Chairman (Member Advocates Connect with new members First 90 days)
-- Product/Service Information Brochures
-- Hours of Operation (7x24x365)/Web Site info
-- Member Card/Discloser Forms
-- All in One Member/Loan Application
-- Department/Staff Listing/Concierge Services
-- Certificate of Member Ownership/Member Care 800#
-- Teach Members to Self Serve Themselves via Tech
-- Set up Outbound Call Center/ follow up personalized calls to build more profitable relationships with members who join through remote channels.
We Need Some Income!
With Tight Margins/Flat Yields in Financial Institutions… we need to consider:
Fee Income as offsetting this situation.
40% of Banking Income is from Fees
CU Fee Income Up 30% last ten years.
10% of Credit Union Income is from Fees
Strategic Q: Are you leaving $ on the table?
Suggestion: Have Good Waiver Policies
(Loose approach leads to missed $)
(30+ million immigrants in USA/$Bill Remittances)
$12 billion spent on Cosmetic Procedures in USA
Break Down Members into Cluster Groups and Market to those needs
3 Key Groups/Areas to Focus on:
1) Young Adults 2) Boomers 3) Small Business
Age Demographic: Born After 1980
Characteristics: Born with Internet, experiences beyond their years, older parents, may not have to work, independent earlier .
(80% unaware they can join a CU)
Looking to Credit Union for help with:
Getting started, establishing credit, checking acct, education loans, first car, credit/debit cards
Reach Them By: Clubs, Student CUs, I-pods/phones/I-app with Loans, Kool cu web page, put on Youth Task Force/Committees, Provide Scholarships/Offer Brass Magazine .com
Age Demographic: Born 1945-1965
Characteristic: Known as “Sandwich”, Me Generation
(Stand to Inherit $10 Trillion/ Will Pass On $30 Trillion 2 Gens X/Y)
Looking to the Credit Union For help with:
--Trusts, Luxury Cars, RV/SUVs?/Harleys?
-- New Image (Nip & Tuck Lifestyle Loans)
-- College Fund/Bill Pay/Reverse Mortgages
-- IRA/Business Loan/Long Term Health Care
-- RETIREMENT PLANNING/Wealth Transfer Management
(Pensions Declining trend, shift to Personal responsibility)
Have Other Influences on their Kids/Parents
(they consider themselves mid lifers)
Is the Growing Small Business sector in Your Community an opportunity for your CU ?
-- 5 Million Small Businesses in US (companies less the 500 employees/45 % of private payrolls/created
60-80% of US JOBS the last decade)
-- 10 Million self employed persons +
(Restaurants/Salons/MDs/Dentists/Service Companies/Retail Stores/Consultants)
-- Fee Income/Merchant – Funded Rewards
-- Potential Employee Membership
1)Alabama Telco CU ($450M+) Birmingham AL
Deposit/Loan Balances up to 20%
New Loans/ New Households Up 60%
CU Strategy: How Did they do it?
-- Took A Strategic Marketing Approach
-- Use MCIF Analyzer (pull demographics/break down accts into profitability and trigger follow up calls/mail campaigns)
-- Sell more to each Member Household
-- Created Member On Boarding program for New accounts / Contact prospects into Members
2)Brewton Mill FCU ($21M) Brewton, Alabama
Five Year Average Annual Growth: 10%+
Five Year Average Membership Growth: 20%
CU Strategy: How Did they do it!
-- Moved to Community Charter, expand CU services, adding debit, share drafts, and CDs
-- Immersing CU in the Community Sponsoring local events/charities.
-- Converting Bank Customers focusing on CU Safety
-- Increasing Advertising activities/Re-Branding the CU with message CU is for Everybody
3) United Labor Credit Union
($9.7 M) Kansas City MO
Primary Membership: Construction workers
Auto Loan Growth Up 9%
CU Strategy: How Did They Do It!
-- Improving Relations with SEG/Get out in Front of People/Build Trust.
-- Go after Pent up Demand for Vehicles.
-- Less emphasis on Credit Score/Offer “Empower Hour”to learn more about members financial needs.
-- Offers regular Financial Education/Retirement Planning Seminars and looks for opportunities how the CU can help members.
4)Upper Cumberland Credit Union ($30M) Crossville, TN Achieved a 7%+ Membership growth/30% Loan growth.
CU Strategy: How Did They Do It?
All staff carry the title Member Advisor/All take time with members to cross sell/ all trained to contribute to the success of the CU has a institution –wide sales emphasis.
Rewards/Bonuses are spread across all CU business units.
5) Randolph-Brooks FCU ($5.3B)San Antonio, TX witnessed a 10%+ Real Estate Lending, 10% Auto Lending and 20% Credit Card Growth.
CU Strategy: How Did They Do It? Increased Marketing, Shorter term loans focusing on members in their 20/30s who need Core services, first home/car/checking account. Non interest income driven & diversifying income streams.
6) Offer Relationship Pricing—the more members use the CU s services, the better the deal. Bundle products (checking/debit cards) to maximize income.
7) Reach out to Boomers/Women via Small
Business Services/Lifestyle Lending products.
8) Exploit Cost Efficiencies/Control Expenses via
Eliminate waste: Practice “Kaizen”
“Process Improvement” Activities.
9) Make it a Strategic Imperative to Reach Out to
Youth/Young Adults (focus on FinancialLiteracy ) via their means: Schools/ I-Phone/Soc Networks. The under 30 demographic is your next generation of business for your CU.
10) Consider starting a CUSO offering DP/HR/IT/TravelProducts and Services.
11) Focus more on Non Interest Income: Debit Cards, (Insurance Products (Pet) GAP Coverage, Credit Protection) (Interchange/Over draft Fees) Investments/Brokerage Services.
12) Embrace Mobile/Tablet Technology and SocialMedia. Utilize innovative ideas to create Apps for this and that and do not Fear Facebook (1 Billion Members Worldwide!)
(7 Billion Smart Phones/70 Million Tablets Worldwide)
Consumers/Members are a Mobile Branch!
13) Get the Right Staff in the Right seats on your CU Bus and lead them in the Right direction to Serve Members more effectively and Teach members How 2 Serve Themselves.
Average Member Balances
Member ReturnFor Future Growth--I would like to see CU s Include Performance Measures to Be More Member Focused…
“ Boomers…Its not the strongest of the species that survives, nor the most intelligent, it’s the one that is most adaptable to Change”
Charles DarwinAnd Finally…As we“Think Outside the Box” and “Grow Against the Grain”… Remember
John A. Vardallas is an International Credit Union Business Consultant and Founder/CEO of TheAmericanBoomeR Group, a Madison Wisconsin based Speaking and Consulting Business. His work focuses on helping credit union leaders and organizations increase productivity and profitability.He conducts High Performance Leadership & Management Development, World Class Service, Change and Growth programs forstaff and directors. He also facilitates Strategic Planning sessions for a variety of credit unions throughout the US each year.
For a free E-Catalogue of Programs & Services you may contact John/ Office (608) 221-4621 Cell (608) 577-8707/e-mail [email protected]/ www.theamericanboomer.com
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