Purdue FCU created two new programs to better engage business members.
Educational seminars and business coaching programs aim to turn business members into business partners.
CU QUICK FACTS
HQ: West Lafayette, IN
Data as of 09.30.19
12-MO SHARE GROWTH: 5.2%
12-MO LOAN GROWTH: 10.4%
The extra mile is the loneliest stretch of road you’ll come across, says Sam Burns, the vice president of member business services at Purdue Federal Credit Union ($1.3B, West Lafayette, IN). But as the head of business lending, he sees firsthand how that extra mile benefits both the credit union and its business members.
For most of the financial services industry, serving business members requires three things: loans, deposits, and high-touch customer service. If that’s the standard, how can a credit union stand out?
“If your differentiator is providing the same level of service as everyone else, then the business member knows no difference,” Burns says. “You have to find a way to step up your game.”
Purdue Federal steps up its game by deepening its relationships with business members. The smaller pool of business members allows the credit union to more easily maintain a human touch and ultimately build what it hopes are strong business partnerships rather than transactional relationships.
MEMBER BUSINESS LOAN BALANCES
FOR U.S. CREDIT UNIONS > $1B IN ASSETS | DATA AS OF 09.30.19
Purdue Federal’s member business lending balances have historically been larger than those at asset-based peers.
“Your business lender can be an extension of your team,” Burns says. “They can be involved in your budgeting and financial reviews. They can help you understand when your margins have slipped or are strong and what you can do with that information.”
In 2019, the credit union has introduced two new strategies to further strengthen its ties to business members and the business community at large — a partnership with the Greater Lafayette Chamber of Commerce and the launch of a business executive coaching program.
The Chamber Partnership
On the retail side, one of credit union’s key strategies as a cooperative is to provide financial literacy to members of its community. More than a year ago, Purdue Federal’s CEO, Bob Falk, tasked Burns with extending this program to the business side as well.
Sam Burns, Vice President, Member Business Services, Purdue FCU
In early 2019, the credit union partnered with the Greater Lafayette Chamber of Commerce to offer free quarterly seminars for small business owners. The chamber and credit union invites every member of the Greater Lafayette Chamber of Commerce as well as all Purdue Federal business members for one morning of programming focused on a specific business-related topic.
Burns and several representatives from the chamber booked topics a full year in advance while selecting speakers as much for their knowledge and expertise as for their ability to hold an audience’s attention. Topics have included strategies to scale up, data security, and more.
For the most recent seminar, which attracted some 100 community business owners, a former small business owner — and current salesperson at an area company — gave a presentation on how to develop a sales pipeline. The speaker was a former professional magician, so in addition to providing great content, he entertained attendees.
“The content was great, but the whole presentation was creative and entertaining,” Burns says.
The credit union will hold its next seminar in January 2020 and plans to cover cash flow analysis. Attendance has grown with each seminar, Burns says, and he expects the success to continue across the coming year.
“We’re bringing the right subject matter at the right time to these businesses,” the VP says. “The fact they’re fun, well-run, and well-marketed makes them even more successful.”
A good business executive coach can run into the mid-to-high hundreds of dollars a month, according to Burns. For a small business operating on tight margins, that can be a tough cost to bear. But business coaching is also a valuable resource to a new or small business, which is why the credit union devised a more affordable way to offer quality coaching.
Purdue Federal identified 20 high-potential, coachable businesses that might otherwise struggle to afford coaching and divided them into two groups of eight to 10. For these businesses, third-party executive coaching is available in a group setting to help participants in both groups think more strategically about their businesses. That’s an important component of business ownership. Because small business owners often wear many hats, they spend more time focused on day-to-day decisions that keep the lights on rather than on long-term strategy.
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“We hope to show the importance of devoting time and thought to the strategic side of their business,” Burns says.
The general program will review business operations from soup to nuts, starting with formalizing a strategic plan before moving into building a culture, setting pay, growing at scale, and retaining employees. It’s a detailed curriculum, Burns recognizes, but these are concepts successful business owners must understand. The program's cost structure is more affordable option for small business owners, when compared to other executive coaching rates, says Burns.
And for business owners who want more concentrated direction, one-on-one executive coaching sessions will be made available that are tailored to an individual business's needs.
The business executive coaching program was slated to launch in late 2019; however, Purdue Federal realized the end of the year was too busy a time for these participants to step away from their businesses. So, the credit union will launch its first cohort in January 2020 and has planned 12 sessions across the year.
According to Burns, business owners want more than a loan or a checking account. They’re looking for a partner, someone that will empower them to run a successful business, someone to help in the good times and have their back in the lean. And when business members can be won or lost on a quarter of a percent, Purdue Federal recognized it was better to compete based on goodwill instead of margins.
“That’s why the extra mile is so lonely,” Burns says. “Most people provide a product or proposal and sees how it goes. Our mission is to be a trusted financial partner for life, not just a lender.”