No More Doughnuts And Key Chains

Are your SEGs getting the branch-quality blitz of financial insights and resources they deserve, or are you just going through the motions?

 
 

When done right, SEG outreach can be an effective stand-alone business model or a prolific component of a multi-bond charter. But like any type of relationship, these partnerships cannot survive long term if left on autopilot — they need to change and adapt along with the times.

Chartered in 1940 to serve Norfolk & Western Railroad employees, Member One Federal Credit Union ($586M, Roanoke, VA) still has strong ties to its original SEG and is headquartered just 40 yards away from its original location by the railroad yard.

But in the 73 years since its inception, Member One has also successfully expanded its partnership roster to include more than 560 additional SEGs and MSAs.

Roughly 28% of these relationships were developed over the last four years, the result of a new five person business development unit branded “One Mobile.” Headed by Chief Development Officer Mark Hudzik, One Mobile aims to re-envision what modern SEG outreach could and should look like.

While Member One is a multi-bond institution that also serves members who live, work, worship or attend school in multiple Virginia counties, the One Mobile team is exclusively SEG-oriented.

“Serving SEGs is a key factor that drives our market share here,” Hudzik says. “That is our competitive edge over the larger banks and community banks.”

This additional investment in SEG outreach has helped drive double digit growth in almost every area of the loan portfolio at Member One, including fixed first mortgage and new and used auto. 

“We averaged 7.1% net membership growth last year, with roughly half of that growth coming directly from SEGs,” Hudzik says. “And another 20% of that growth is attributable to family members or associates of employees in our SEGs.”

MEMBERSHIP GROWTH
DATA AS OF SEPTEMBER 30, 2012
© Callahan & Associates | www.creditunions.com

members-growth

Generated by Callahan & Associates' Peer-to-Peer Software

Bring The Branch To The Break Room

In a time when many cooperative institutions have switched over to a community charter, some have begun to rely too heavily on brick and mortar to bring the community to them, Hudzik says. In many ways, Member One is taking the opposite approach.

“We stepped back to look at what we were doing, and really began to put value into new and existing SEG relationships to help grow our membership,” he says. “Banks today are piggybacking off of credit union strategies, so you’ve got to be willing to do something different than just handing out donuts and key chains.”

To help the credit union stand out from the herd, Hudzik’s team was designed to function like a mobile branch, with employees spending 80% of their time out on the road and onsite with employee groups.

“Bringing the branch to you is what makes us different,” he says.

Using branded vehicles wrapped with the credit union’s logo and other identifying information, One Mobile reps are armed with intensive product knowledge, marketing collateral, and iPads that allow them to do everything from present financial seminars and product demos to open new accounts.

These team members are typically onsite at area businesses as early as 6 AM. They open accounts throughout the day and hold lunch and learns at noon and once again in the evening. For some of these evening sessions, the families of employees are also invited to attend.

Because of the team’s state of constant activity, individuals in the community often assume Member One has a whole fleet of branded vehicles out on the road, rather than the five vehicles it actually has.

“We change the wraps on the vehicles with each new campaign to keep things fresh, and we have messages like ‘Ask me about financial education’ on the back of the cars.” Hudzik says. ‘When individuals and other companies see our vehicles parked somewhere, it makes them wonder ‘What are they offering in there?’”

Think B2B

Another differentiating factor for Member One is how well the credit union demonstrates the positive effects of its presence on employee production levels.  But this goes beyond just saving employees’ time by eliminating some branch visits, Hudzik says. It also requires proactively identifying and helping to solve personal financial burdens which, if left unchecked, can carry over to the employees’ professional lives.

“There’s a business to business component to these relationships,” he says. “The number one stress factor for people today is their finances, so if we can help employees with that, they’re going to sleep better, have less sick days, perform better, and be happier on the job.”

A majority of the financial education system used during SEG outreach was created in-house, but Member One has also partnered with a credit counseling company Money Management International to enhance some of these efforts.

Serve Long, Sell Long

“Over the years, the SEGs we serve have grown more diversified,” Hudzik says. “Now we have everything from Ma and Pa retailers with less than eight employees, to large employers in the healthcare industry, to local arts and educational institutions.”

This diversity means that Member One must take a long view with SEG relationships, using both external and internal resources to constantly anticipate the particular nuances, challenges, and opportunities associated within each partnership.

“We like to look at things like the average age of employees and the number of employees with children to find institutions that can help us move toward our own membership goals,” Hudzik says.

When a proper candidate is indentified, the first step for Member One is to meet with their different representatives and departments, including individuals from operations and human resources, to paint a holistic picture of employee needs long before any actual business occurs.

Then, the business development team meets with the credit union’s other departments to see where existing solutions can be adapted or new ones developed to best meet those needs.

For example, in healthcare SEGs where employees must pay for things like accreditation and the renewal of licenses out of their own pocket, Member One offers a targeted line of credit to help employees deal with those upfront costs. In other cases, the credit union may offer a reduced rate on an existing product or service that is deemed important to that specific SEG, or promote a second chance checking account to help bring employees with marred financial histories into the fold.

LOAN ACCOUNTS PER MEMBER
DATA AS OF SEPTEMBER 30, 2012
© Callahan & Associates | www.creditunions.com

loan-accounts

Generated by Callahan & Associates' Peer-to-Peer Software

The One Mobile team also works closely with company managers and the credit union’s own marketing and operations units to find the best methodology to connect with those employees, be it via email blasts, printed collateral, or in-person visits.

Make It Mutually Beneficial

Hudzik does warn that credit unions need to be very diligent in what they do with their SEG dollars and in tracking their return on investment. For example, any relevant employee information collected by reps during onsite visits is also funneled back to the branches and other contacts points, which can make future interactions with those members in non-SEG environments more fruitful.

Hudzik’s business development unit also handles community sponsorships for Member One, and while there are exceptions, most businesses must be SEG partners in order to secure event resources or sponsorship.

“Everything has value to us and we’re going to be there for these events, but we need to be able to track it,” Hudzik says. “These efforts have to be a ‘we’ thing. We’re all partners at that point.”

 

 

 

Feb. 11, 2013


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