The Power Of One

A Nebraska credit union deepens relationships by aligning institutional resources behind the efforts of a dedicated salesperson.

 
 

Bringing in new members may provide an immediate boost to key performance metrics, but it's the ability to deepen those relationships consistently over time that keeps a financial institution on top in the long run.

Wallet share is an area of increasing importance for all credit unions, yet many institutions with a single select employee group (SEG) have already become especially adept in this area, including Family Focus Credit Union ($27.3M, Omaha, NE).

Chartered in 1931, the cooperative serves the financial needs of employees at the city's gas and water company, Metropolitan Utilities District. Share draft penetration — a strong indicator of how many members consider the credit union their primary financial institution — has increased significantly over the past few years at Family Focus, reaching nearly 40% in 4Q 2012, according to Callahan & Associates' Peer-to-Peer software. In addition, the credit union's average member relationship — the total value of share accounts and loans — was $16,076 at year's end, roughly four times the norm for peers in that asset size.

SHARE DRAFT PENTRATION
DATA AS OF DECEMBER 31, 2012
© Callahan & Associates | www.creditunions.com

share-draft-penetration

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

While staying true to its roots, the credit union has made several strategic adjustments over the past few years that, along with a key hire, have kept it in tune with the ongoing needs of its SEG.

Creating Ownership Of A Sales Culture

The credit union currently has six full-time employees and four part-time employees, but its recent increases in wallet share owe much of its success to the efforts of a single, dedicated salesperson.

The credit union first decided to hire someone for an exclusively sales-oriented role three years ago, after senior executives identified the need to educate members about the value of available products and services, without the distraction of other operational and service-related tasks.

"We've essentially thrown out that model of trying to make somebody be everything," says Amy Brodersen, CEO of Family Focus. "A good salesperson is not generally the same employee who can balance the cash drawers. Instead, they're more focused on developing relationships with people and are really not so into the detail-oriented side."

While the front line at Family Focus still plays a vital role identifying possible sales leads, the credit union now prefers to hand off the development of these relationships to the sales-oriented representative as soon as possible, rather than having other staff pursue them.

"All the front line is responsible for, regarding the sales process, is getting members to sit down with that one employee," Brodersen says. "Then it's the job of our salesperson to make those interactions opportunities."

There's no ceiling on the salesperson's earning potential, but his compensation is on commission so that if he misses set benchmarks, he gets nothing. Although there are no formal benchmarks for the number of sales leads that other employees must pass along, they too are incentivized with a small dollar amount for identifying leads. There are abundant cultural drivers to motivate them as well.

"When you have an active, aggressive salesperson, they're going to keep those other employees accountable," she says.

Maximizing Collective Efforts

Although the credit union has not altered its products significantly in recent years, the 2007 addition of a formalized marketing committee — a model that the credit union now employs in many different areas, from asset liability committee discussions to new building projects — as well as an enhanced website and the introduction of an email marketing strategy all helped increased member awareness of the credit union's offerings.

The marketing committee itself consists of vice presidents from various departments, key representatives from Family Focus's SEG group, and members from other committees and the board.

"Our SEG is a strong union organization, so we looked for a volunteer from the local union to join the marketing committee," says Kari Rager, vice president of sales and lending. "This helps us form better relationships, and ensures we are aware of what these employees are really looking for."

Since 2010 the credit union has also partnered with a marketing firm, and these individuals attend the committee's meetings to help ensure the credit union's message and priorities are conveyed in its outreach materials.

In addition, the transition of branch operations to a new building that will be completed this June and a planned data processor conversion in the fall will broaden Family Focus's technological capabilities, including electronic documents that will allow loan or membership applications to be completed entirely online. The new core system will also enhance the credit union's marketing customer information file (MCIF) database capabilities and boost cross-selling opportunities for its loan-focused employee.

"When you have a talented salesperson working for you, you don't want to make them dig through the system to find the information they need," Brodersen says. "We want this process to be as simple and as automated as possible, so that this employee can focus on interacting with members."

Making Balanced Growth The Goal

In 2010 the credit union experienced a significant influx of 10-year fixed-rate first mortgage products that were driven primarily by the low rate environment and eventually necessitated a shift in its portfolio growth goals.

"From an asset and liability management standpoint, we decided to turn that around and are now incentivizing our salesperson to focus on driving consumer loans rather than real estate," Brodersen says. "We didn't want to lose that business altogether, but we were pretty extended in that area."

Boosted by strategic campaigns such as a recapture program that rewards members 1% of their loan amount in cash, up to $250, if they transferred their auto loan from another institution, Family Focus was able to roughly double its auto penetration from 2008 levels to 29% in 4Q 2012.

AUTO LOAN PENETRATION
DATA AS OF DECEMBER 31, 2012
© Callahan & Associates | www.creditunions.com

auto-loan-penetration

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

Although it currently has a good portion of borrowers in the upper credit tiers, Family Focus wants to capture more of the C, D, and even E paper that larger financial institutions and other lenders in the region frequently overlook.

"Our underwriting abilities, combined with our close ties to our SEG group, access to the borrower's employment history, and optional requirements like automatic payments let us look beyond the credit score at the member's whole financial picture," Rager says. "We like to lend in all credit tiers, and we're able to do a lot of auto loans that other places may not."

Capturing these auto products right off the bat has also helped Family Focus open the door to a host of other loan activity, including the 25.4% credit card penetration the credit union currently enjoys.

 

 

 

May 13, 2013


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