We are a $378 million credit union that finished 2005 growing 20% in deposits and 30% in loans. We have not been involved in mergers; all of this has been our own work. We are not flashy. We do not use techniques not available to any credit union. Here are the things I think we do that account for our growth.
Understand the Market
We are in a kind of unique market. It’s primarily Hispanic and blue collar. We have to have a good grasp of what it takes to be successful with Hispanic families. They are tight knit.
We understand that if we give outstanding service for a single family member, that person will recommend us to other family members, and those will tell their neighbors. Although we do use direct mail, media advertising, and customer analysis, our biggest source of new business is referrals.
Develop and Motivate the Staff
Our staff knows that when a member walks in, that person should receive the best possible service. We have three fulltime trainers whose sole responsibility is to continually bring the staff up to speed on all policies, procedures, products and services.
We do lots of cross training. When people have mastered the skills in one area, we train them with people from another department. We grow our own managers – more than 60% have been promoted from within – and all our managers are working managers.
We offer excellent incentives. We believe staff should have good base salaries, but everyone knows that to make better money they have to take on responsibilities and sell. Staff can increase their salaries close to 30% with sales. We believe there is a direct correlation between staff well-being and member satisfaction.
A few years ago when we wanted to diversify, we knew our business model could produce 1.5-2.0 ROA, so we decided to be more aggressive. We did so in marketing and in loans.
We operate in a credit-challenged market, but we know our market well. We looked for ways to make loans to persons and by doing so we gained new loyalties, which, as I have said, translated into referrals. We do risk-based pricing, but we also offer very good incentives for loyalty. If a borrower has direct deposit, automatic payment, a record of previous loans or other products of ours, that member can attain a discount of up to 150 basis points off the loan’s interest rate.
It might sound strange that we can succeed with such a simple strategy, but it’s true – it really is all about people, nothing else. In the consumer world, all a person wants is service at a high level and with a smile. Price is incidental; if you get the first priority right, growth and income are residuals. We feel fortunate to have 180 staffers that pull in the same direction and understand our mission, and despite the economic climate, we grow and grow.