PrimeSource Credit Union ($49.8M, Spokane, WA) wants to be the prime source for financial information for its members. The mid-sized credit union started in 1935 in the basement of the Pacific Northwest Bell Telephone Company but has since converted to a community charter that focuses on recruiting membership from the neighborhoods surrounding its two branches. The credit union, which changed its name in 2005 to reflect its new charter, reaches more than 10% of its potential market. That’s more than double what its asset-sized peer group of $20-50 million reaches, according to Callahan’s Peer-to-Peer software, but PrimeSource’s leaders say convincing members to make the credit union their primary financial institution can be a challenge.
“Many credit unions [in Spokane] are community chartered,” says Ren’ee Robertson, vice president of finance at PrimeSource. “Most people can belong to three, four, or five different credit unions.”
When members use multiple financial institutions it can be difficult to rise to top as their primary provider.
“We recognize a lot of people don’t have a primary financial institution anymore,” adds CEO Margaret Burkholz. “People look at where they can get the best rates, but we manage accounts and our cross-sales toward the idea of becoming their primary financial institution.”
That includes persuading members to use products and services such as checking accounts, debit cards, eStatements and online banking and bill pay. As of first quarter 2012, the credit union’s members held 1.95 share accounts per member with an average share balance of $7,483 compared to 1.64 accounts with an average balance of $6,422 for its asset-sized peer group. For loans, the credit union’s members held 0.50 loan accounts per member with an average balance of $12,872 compared to 0.42 accounts with an average balance of $8,450 for its peer group.
The credit union offers rate incentives to open share drafts and loan discounts for members with direct deposit. The credit union also rewards its employees for identifying opportunities to put a member in a product that would help not only the member but also the credit union.
“We just switched to a different data processing system so our front-line staff has our members’ needs and wants at their fingertips,” Robertson says. “They’re not force selling something just because it’s a number we want to achieve. Our focus is taking a look at that member and saying ‘What products and services are going to help this person?’”
Operating a sales culture that balances service with performance expectations can be tricky. PrimeSource uses frequent updates and face-to-face communications to ensure individual staff members feel like part of the team.
“We share our goals with the staff so they know what they’re working toward,” says Vice President of Operations Annettee Babb. “Each department has monthly reviews, so staff is involved in not only the campaigns but also the big picture. That plays a big part in what makes us successful.”
The credit union also tasks the staff with educating one another about its products and services during a weekly meeting. Management assigns employees a product or service offered by the credit union, generally one with which the employee is not familiar, and asks them to give a 15-minute presentation. For example, a teller might present on GAP insurance or mechanical repair coverage. The method encourages staff members to use those interrelationships and creates local experts.
“Our staff needs to know these products and services to fill members’ needs,” Babb says. “They’ve got to feel comfortable talking about them before they can convince the member they need it.”
To make sales more enjoyable, PrimeSource has instituted “hot call nights,” in which staff members participate in a sales and service calling campaign. The credit union chooses a product – such as a holiday loan – and staff members volunteer to stay late to call and talk with members about the product. The credit union distributes a list that contains members who have been pre-approved based on certain criteria, and the callers receive a monetary incentive, typically $10 to $25, for making the sale.
“The incentives are meant to support the goals we’ve set for the year,” Burkholz says. “But our staff can get into some of those incentives, and, at times, they can also be a bit competitive.”
Hot call nights last from 6 to 8 p.m., so the credit union buys dinner, snacks, and refreshments. Callers share their successes as they make sales throughout the evening, and the two branches take part in a friendly rivalry.
“It wasn’t necessarily intended to be a fun event,” Babb says. “But staff had success stories to share, which motivated them.”
The staff members that participated in the first hot call night enjoyed talking with members and some even asked to continue calling members they weren’t able to get a hold of during the evening hours. Enthusiasm like that spreads, and employees whose strong suit is not in sales volunteered to step up for the second hot call night. Despite fear and nerves, they made the calls. According to management, participation in events like this helps make employees better front-line staff members.
“Because we have a smaller membership base, there is a familiarity,” Burkholz says. “That’s inspired staff to come back and do it a second or third time. They’re not just selling something to somebody. It’s their member.”
The credit union has hosted two hot call nights to date with a third planned for July.
This spring, PrimeSource launched a two-month auto loan promotion that contributed nearly a dozen sales to a local dealership. The credit union worked with a locally owned, smaller dealer to offer a special rate for PrimeSource members. In return, PrimeSource booked $116,994.93 in direct and indirect auto loans.
“It was important for us to be involved in the local economy,” Robertson says. “We wanted to keep it local, keep it direct, and keep it somewhere that it’s going to benefit the Spokane area.”
PrimeSource does not participate in member business lending. However, it views campaigns like this as an essential way credit unions can drive their local economies.
“More than half our loan portfolio is in autos, so that’s a lot of dollars put in the economy,” says Kevin Spoerl, vice president of lending.
Like most credit unions, PrimeSource is having no difficulties growing shares — its 12-month for first quarter 2012. However, more atypically, its 12-month loan growth, 7.10%, exceeded its share growth.
“We try to manage our share growth so we’re not growing exorbitantly and unable to lend it out,” Spoerl says. “We pride ourselves in lending to our members rather than investing. Our loan-to-share ratio is about 85%. We like to be well above our peers [54.8%] in that.”
All Work And A Little Play, Too
Because it is a smaller credit union, the staff members at PrimeSource Credit Union wear multiple hats and shoulder many responsibilities. There is always something new or something more to learn. It’s an environment that can take a toll on even the most upbeat staff. To add a little joviality and help create bonds that extend beyond the walls of the credit union, PrimeSource hosts social activities that bring together the workers and their families.
“We get out of the building,” Babb says. “We get people from both branches. Employees talk all day long via the phone, but it’s different when it’s face-to-face.”
Every quarter the credit union takes its staff and their families to an event such as a Spokane Shocks (arena football) match or a Spokane Indians (minor league baseball) game.
“This is not just a job,” Burkholz says. “We’re here longer than we are at home. It’s important for me to know both sides of their [employee] lives. We’re fortunate we’re still a size that I am able to do that.”