To reach maximum potential, credit unions must identify and capitalize on fresh revenue streams. From getting a member to refinance a loan to encourage them to deepen their deposit relationship, there are a number of ripe lines of business. Credit unions around the industry are deploying innovative tactics — a few of which are outlined below — to enhance relationships and the bottom line.
Amplify Federal Credit Union ($543.9M, Austin, TX) understands relationships are central to thriving direct and indirect lending. The credit union’s staff gets on the phone with dealers to understand what’s going on. It uses outbound calling to gin up extra direct business. Outreach often brings in not only loans but also checking accounts. The first target audience was members who had been approved but not funded for an auto loan. Sounds like a good starting point for any credit union.
Credit card programs can be difficult to manage especially in times of economic uncertainty. Some people are hesitant to use them, and other people rely on them too heavily. Piedmont Advantage Credit Union ($211.9M, Winston-Salem, NC) noticed lagging card penetration and changed the marketing of the program. It used attractive rates (and a rate reduction) to generate $2.7 million in balance transfers and 695 new Visa accounts. Never underestimate the power of reintroducing a product to your membership.
Don’t overlook the simple solution. At Greenville Heritage Federal Credit Union ($42.1M, Greenville, SC), staff always make sure to inquire about where members have auto loans when they’re processing other loan requests. Lately, the credit union has shifted its focus to the deposit side of the balance sheet and intends to offer attractive promotions to attract interest. Make sure to ask members about the scope of their financial relationships; in all likelihood, you'll be able to help them and generate additional business.
There’s no harm in seeking face-time with members outside the credit union. What’s one way to do that? Merchant lending. Texas Dow Employees Credit Union ($1.58B, Lake Jackson, TX) has its own dedicated retail lending team and works with more than 80 merchants. At year-end 2010, the portfolio surpassed $14 million. Working with area businesses puts your credit union in front of members and prospective members, which can only help performance.
Rejuvenating your bottom line requires ingenuity and the ability to diagnose opportunity. Once you’ve done so, strategy is the next step. These best practices work, but there’s no reason to stop here. Use them as a springboard, and create value propositions members can't resist.