Mining the Acres of Diamonds in Your Credit Union Membership

I have heard the old ‘acres of diamonds” story retold many times over the years. My favorite version is the one told by Earl Nightingale the late great radio pioneer and motivational speaker. The story goes like this, a farmer in South Africa hears about diamonds being found in different parts of the country so he sells his land and spends the rest of his life in futility looking for the elusive diamond fortune. Meanwhile, back at the ranch, or the farm in this case, the land the farmer sold in quest of fame and fortune turned out to be one of the most fertile diamond mines in the country. The original farmer went out in search of his fortune not realizing that if he had spent the time and energy on his own land it would have yielded acres of diamonds.

A recent edition of American Banker contained an article that told a similar story. While the article examined banks it could very well have described credit unions. It seems a survey conducted by Greenwich Associates revealed that cold calls take up 20% of bankers’ time but bring in only 9% of their new business. In contrast, they spent 42% of their time on referrals which yielded 21% of new business. These survey results reinforce what I am sure you already know which is “mining” our own membership base is more fruitful that outbound “cold call” type marketing. Of course, we have to do a certain amount of cold sourcing to supplement our referral efforts but the results tell us that a majority of our time should be spent mining our own “acres of diamonds.”

I recently spoke at a corporate credit union conference and related some of my personal experience with this concept. A former broker dealer that I worked for embraced the cross-sell concept within the broker dealer and financial institution. The end result was the financial institution reaped nearly 20% of its non-deposit revenue from its investment program and the average client who had a core checking account and was an investment client utilized an average of nine products with the financial institution compared to 3.73 products for the non-investment service customer. A core checking account was defined as the main checking account for the client i.e. they had direct deposit and wrote more than 10 checks per month.

Space does not permit me to elaborate on all of the strategies employed to get to these impressive results. The financial institution made the commitment to a sales culture throughout the company and also made the determination that investment sales were a key product within the overall product mix. Likewise, the broker dealer made a commitment to cross selling the financial institution products to complement the referral efforts made by the staff. There was an incentive compensation program for the tellers and new accounts staff and there was an incentive for the financial consultants to refer checking accounts, home equity loans, etc. The end result was an impressive 11.7% client penetration for the investment program and a contribution to the financial institution bottom line of approximately 17% of non deposit revenue.

What does this mean to all of us? At the risk of “preaching to the choir”, it tells us that members who are introduced to the credit union investment program are “stickier” members. They will stay with the credit union longer. They will also generate more fee income for the credit union as evidenced by their propensity to use more credit union products compared with a member who does not take advantage of the investment service. These “investment households” also tend to bring in new deposit dollars to the credit union. In this time of squeezed margins, the credit investment program can be a welcomed fee income contributor when it is integrated into the overall credit union product offering and backed by a cross-selling program.

The timing couldn’t be better for credit unions to examine their cross-sell and investment program referral systems. History shows us that successful integration leads to high revenue producing investment programs in the financial institution marketplace. I look forward to working with you to develop a plan to mine your own “acres of diamonds” as we work together to increase the investment program penetration success at your credit union. History can repeat itself when we work together to achieve the common goal of bringing optimum service to our members.

Credit Union Marketing Made Easy

If you work in credit union marketing – or any kind of marketing, for that matter – you’ve no doubt heard the argument that marketing is an art rather than a science. After all, there’s certainly no foolproof, straightforward formula one can follow to guarantee a campaign’s success. Nor is there any accurate predictor to truly gauge how an audience will respond to a marketing initiative or advertisement. And even when a marketing campaign does achieve success, oftentimes there’s no one who can really explain why – or what – made it work. Instead, people refer vaguely to “luck” or simply “being in the right place at the right time.”

Because of these kinds of attitudes, marketing has gradually taken on a somewhat magical, mystical quality. And so-called marketing experts (those who have experienced repeated success) are viewed as having almost supernatural powers. The good news, though, is that while it’s true marketing doesn’t come with a formula – there are some easy-to-follow guidelines that can at least point your credit union marketing campaign in the right direction. Just follow the tips below!

#1: Be consistent with your brand identity.
Obviously, your credit union’s logo should be on every piece you create, but keep in mind your brand identity extends far beyond just your logo. Work on creating a consistent set of design elements you can use on all your credit union marketing pieces to make them even more instantly recognizable. And don’t worry about becoming locked in to a certain look or feel, because portraying a consistent image is actually one of the best things you can do to make your credit union marketing pieces memorable for audiences.

#2: Provide an incentive.
Even the world’s most powerful, persuasive, well-written call-to-action can’t generate response rates as successfully as an enticing giveaway. Use this to your advantage when planning your next credit union marketing campaign. Whether you give out small gifts to each responding member – like a $5 Target® or Starbucks® gift card – or offer entry into a grand prize drawing for cash or an iPad®, you’ll find incentives can serve as a powerful motivator for your members.

#3: Joke around.
Don’t have a single funny bone in your body? Don’t worry. Your credit union marketing pieces don’t necessarily have to be laugh-out-loud funny to elicit the benefits of this trick. Instead, think of it as going for a lighthearted approach. Many people associate financial institutions with being uptight or even a little bit snooty, so chances are good that audiences will appreciate your efforts to instead market yourself as more of a helpful financial pal or partner. Plus, putting people in a positive mood when they view your marketing materials doesn’t hurt either!

So go ahead – use these top three tips on your next campaign and experience credit union marketing made easy!

Why Are Millennials Abandoning Big Banks and Turning to Credit Unions?

Millennials (those who are between the ages of 18 to 34 in 2015) are ditching their big banks and becoming members of credit unions. They want the convenience and technology that the big banks can offer but they also want to make sure their banks are paying attention to their needs, by offering customer-friendly service and simple, straightforward solutions that they are demanding.

Millennials know exactly what they want from their bank and everyone is chasing this potential new member. So, understanding their perceptions and needs will help credit unions compete for this sought-after audience.

Below is a closer review of some of the reasons why millennials are scrapping their banks and joining community institutions:

  • They are seen as more customer-friendly and can answers questions directly regarding financial security. They are very helpful when it comes to imparting information regarding car and home buying by offering members education services and solutions that are easy to consume and utilize.
  • Qualifying for a loan will be easier, because their requirements are not as rigorous. While banks tend to turn away millennials with a low credit scores, they roll up their sleeves and make it happen.
  • These younger members crave more high-touch and want to make sure someone is paying attention to their needs. They want to know there is a real person on the other side of the phone and get their questions answered quickly. They want it when they want it and how they want it.
  • Mobile banking is a necessity. Millennials manage their lives on the go so it is important that credit unions deliver a smooth and instinctive mobile experience.
  • Millennials are intuitive consumers and they quickly find deals and share opportunities including rates on car loans, credit builder loans and student loans. Maintaining the lowest and best terms will give the them a greater appeal over a traditional bank.
  • Credit Unions are superior in focusing and competing on financial health. Millennials view them as a trusted resource for financial advice and a partner that specializes in member service.
  • Millennials are also saying bye bye to their banks because of ATM-related reasons. There is either not enough of them, inconveniently located or high fees associated with using them.

There is a natural alliance between the values of Gen Y and the mission of credit unions. These modern consumers do not follow the financial path of their parents. They want to encounter a high-touch, high-tech brand experience by discovering the human side of banking provided by credit unions. By focusing on this age group credit unions are learning and adapting to ensure they are on the cutting edge of the banking technology.