Members 1st Federal Credit Union ($2.2B, Mechanicsburg, PA) has grown its membership at a double-digit rate each quarter for the past two years. It has done this despite spending a similar amount on marketing as its national asset-based peers. One way to measure marketing spend across different institutions is to look at expenses as a percentage of average assets. At mid-year 2012, Members 1st had spent 10 basis points of average assets on marketing. Measured relative to each net new member, this calculates to $85. Nationally, credit unions with more than $1 billion in assets spent nine basis points; however, with fewer member gains this calculates to $237 spent per net new member. What’s more, Members 1st isn’t just adding numbers — the credit union posts higher penetration rates than its asset and state peers in checking accounts, auto loan penetration, and credit card penetration.
George Nahodil is the executive vice president of retail delivery, marketing, and public relations at Members 1st Federal Credit Union.
Tell me about your market area.
GEORGE NAHODIL: There’s a diversity of business here, and we’re fortunate that the state government employs many people. It’s a conservative area that’s economically stable, which I think has been good for us from a lending standpoint because housing values have stayed consistent. We haven’t seen the ups and downs in housing like other markets have.
What have been some of your favorite promotions?
GN: We had a 10-year and a 15-year home equity refinance program that revolved around doing the right thing at the right time that generated a significant amount of business. A lot of marketing is being able to identify what’s happening in the marketplace and then appropriately reacting with the right promotion.
We have a lot of people that are active in the community, so we get a sense of what is happening. If you sit in your office and you never leave, guess what you know? Nothing. We talk to our members and come back and say, “We need to fix this promotion or try these promotions.”
If you sit in your office and you never leave, guess what you know? Nothing. We talk to our members and come back and say, 'we need to fix this promotion or try these promotions.'
What are some of your best practices for getting out in the community?
GN: Community outreach is one of the more significant things we do. That exposure has helped our brand and helped us to generate business. But you’ve got to be consistent and be out there on a regular basis. We have community outreach coordinators that are similar to event planners in that they coordinate sponsorships, arrange check presentations, and set up booths at our charitable and community events throughout the year. We require every associate to do two community or charitable events every year. In 2011, we participated in more than 250 community events, from street festivals to charity walks to Chamber of Commerce functions.
How do you decide what events to do or keep doing?
GN: We want to do more than the year before so our market area grows, but we don’t want to do an event if it’s not successful. If we go to the event and it’s not good, then we take it off the list.
How do you evaluate events?
GN: We have a score sheet. We look at the number of participants, how many people visited the booth, and how many people put a slip in the box to win a prize. Some of it is more subjective, meaning we’re just getting people to answer, “Would you go again? Was it worth us spending $500?” Events that are two or three days long we typically try to stay away from because they take too many resources and not enough people come.
So what are some of the more popular events you attend?
GN: There’s a ton of them. One is the Business Women’s Forum. It’s a great event because it’s for professional women in this market area, and there are about 800 businesswomen that come to this event. Usually our people are clamoring to go to because it’s a good event. You make a lot of connections and generate a lot of new contacts.
Then we have charitable events. There’s a polo match for the MS Society that’s called Denim and Diamonds, where we’re able to meet 200 to 300 people that are influential in the community. We are there with our tent and we also invite prospects and clients. Typically our relationship managers or vice presidents attend the event.
What's a relationship manager?
GN: We have business development people whose job is to generate both commercial and consumer business referrals. They don’t underwrite that business or even take applications as much as they’re there as a referral source in the specific markets that we have them in. I don’t know that a lot of other organizations have that kind of business development sales and infrastructure.
Members 1st holds monthly training sessions to clearly review expectations and standards for employees representing the credit union at public functions. The credit union reviews everything from how to man a booth — don't sit, stand and talk with passerby, take contact information from people with questions — to wardrobe and behavior.
What do they do to generate business?
GN: They attend Chamber events, Chamber breakfasts, Chamber lunches, Rotary, Lions Clubs, charitable organization events, women’s programs. These people are not working 9-to-5. If you’re working Monday through Friday, I don’t know how you could be successful in the banking business. They’re doing things in the evenings and on the weekends. They’re meeting with key people in their marketplace. They’ve got a list of people they’re targeting for business development purposes. I don’t know that a lot of other credit unions have sales people on the street doing those things, and I think that has helped us to be successful.
You’ve got a sales-focused culture. How do you get buy-in for that from your front-line staff?
GN: We want to make sure we’re educating our members about something we offer that they don’t have. The initial phase of doing this is about getting people to have a conversation and become advisors to our members and not just be transactional-oriented. It’s an ongoing process. We have new people that come in and need to acclimate, and we’ve got to constantly remind our staff of what we want them to do. It doesn’t just happen. There’s constant encouragement and recognition.
What kind of encouragement and recognition have you found to be successful?
GN: We have sales awards. We have competitions among our branches. We’ve had competitions between the lending team and the branch team on who’s going to sell the most products. We have incentive programs and goals. When we hire people we tell them, “This is our expectation,” and then we hold them accountable.
What’s an example of a goal?
GN: Our tellers have goals for investment referrals, and we sent more than 4,000 investment referrals last year to our investment reps. In our host system, Symitar, we have a propensity model that shows what product the associate should be educating our member about. So there’s a constant push for our associates to provide education.
Does your marketing reflect your focus on education?
GN: Yes. Our president, Bob Marquette, is called “The Advice Guy.” We have TV commercials where Bob is doing something funny like flying in to help someone move who just got a mortgage with us. If you’ve ever had a mortgage, you know how nerve-wracking it is. And when you’re getting a credit card or anything related to finances, it can be very stressful. The humor has helped make people realize we’re not like a bank. We’re not stuffy. We’re just regular people and we’re trying to help. It has created a buzz in our community.
Whose idea was the advice guy?
GN: Ten years ago we were thinking about how to identify with the marketplace. So we went through this branding process and looked at popular campaigns such as Geico where it uses the gecko as its corporate spokesperson. We looked at animals. We looked at different figurines. We looked at all kinds of different ideas. Giant Foods had this humorous campaign with its president, Allan Noddle, as its spokesperson. I said to Bob, “What if we use you as our mascot and brand Members 1st around you?” He was willing to dress up as a super hero, and that was the beginning of the whole thing.
You have a lot of different programs, products, and services. How do you decide where to focus or how you’re going to position one product?
GN: Any time we’re marketing, especially in the environment we’re in now, everything is focused on lending. We’ve done pre-screen offers for Visa. We constantly do email marketing blasts. We’ve got propensity pieces in our marketing system that we use to do mailers. We send mailers if someone’s car loan is coming due. If someone just bought a house, we’ll send something about a home equity loan. From a direct-mail standpoint, the simpler the mailer is, the better. When we’ve done fancy mailers in conjunction with some basic mailers, the basic mailers have had higher response rates, which is interesting.
How do you know when to target someone for a mailer?
GN: We have lists that are uploaded into the marketing system. We have new mover lists, and there are local programs, like the Welcome Wagon, that we participate in. We maximize the networks we have.