Honing in on specific member segments has proven a winning strategy at many institutions. Now, cooperatives are also exploring new avenues — including online communities and specialized business training or certification programs — to strengthen member connections in ways a traditional marketing campaign would not.
Great Lakes Credit Union ($626.1M, North Chicago, IL), for example, is a high-performing institution that spent much of the early 2000s struggling with member growth. After posting negative or sub-baseline growth compared to its asset-sized peers, it started focusing on a niche market and dramatically reversed its member growth trajectory. According to Callahan & Associates’ Peer-to-Peer analytics, the credit union posted a 30.8% annualized membership growth rate as of third quarter 2013. In addition, loans are up 24.4% year-over-year, primarily driven by 62% growth in new auto and 104% growth in used auto.
“Without a doubt, a big part of our success here has been our niche marketing and outreach to women,” says Sue Malo, the credit union’s associate vice president of business development.
The credit union added 20,000 total new members in 2013. Although 14,000 did come from mergers, that leaves 6,000 new members the credit union can attribute to organic growth. And as Malo notes, its woman-centric positioning has been a driving force in that growth.
3 Reason To Focus On Female Members
Great Lakes Credit Union’s female-centric strategy has important implications for institutions looking to drum up loan volume. Here are three:
According to Experian research, women had less debt and used less credit in 2013, which indicates untapped borrowing potential. They also paid that debt more consistently than men.
According to Forbes, women bought more than half of the vehicles purchased in 2010 and influenced more than 80% of all purchases.
According to the National Association of Realtors, single women purchased 16% of homes in 2012 versus single men’s 9%.
A Foundation In Education
In October 2012, GLCU began hosting an annual ladies-only meeting to offer education and guidance on the retail auto market. Attendees — which come from the credit union’s membership as well as the general community — learn about purchasing, financing, safety, maintenance, and more from a panel of successful women in the industry. It’s a great way to pay special attention to potential female borrowers.
“We like to be cutting edge at our credit union and be the first, if we can, in certain things,” says Malo, who came up with the idea and organizes the event.
The credit union solicits community sponsors and partners with a local mall to underwrite the costs of the event. In 2012, the eliminated overhead allowed GLCU to contribute $1,500 in sponsorship proceeds and donations to the National Breast Cancer Foundation; it topped that amount after its 2013 event.
The Value In Outside Validation
Although a success in its own right, the ladies-only event got the credit union thinking about new ways to reach members and potential partners outside of the industry. For example, Jody Devere, CEO of AskPatty.com, was GLCU’s keynote speaker at its first auto event. Defined as a “website, blog, and marketing-to-women agency providing automotive education to women consumers,” AskPatty.com provides a community where women can find information about the auto industry and locate businesses — such as a tire, service, or collision center — tailored to their needs and preferences. It also offers surveys and training for partnering institutions that want to become more female friendly.
“Not much has changed over the years in the auto industry and things still aren’t as transparent as they should be,” Malo says. “But Jody is extremely knowledgeable and all over this subject matter, so we started brainstorming on what else we could do together.”
The answer, as it turned out, was to become AskPatty’s first certified, female-friendly credit union.
“Everyone is trying to get auto loans right now, but this certification strategy was different from everything else out there,” Malo says. “It really seemed like a natural offshoot of our earlier efforts.”
GLCU now has advertisements on AskPatty’s main website as well as a cobranded microsite that includes loan rate calculators, an online loan application, and more. Although new, the online tools have drawn hundreds of thousands of impressions and views on AskPatty.com.
“The microsite did require a little tweaking from [AskPatty’s] standard template, mainly due to the different nature of our business compared to its normal clientele,” Malo says. “Auto-oriented businesses are after more appointments, but we wanted to provide tools and resources to these women that they didn’t have before.”
The current ROI warrants continuing the AskPatty relationship in 2014, and GLCU is working with the site to facilitate the back-end reporting necessary to determine a hard dollar ROI on its electronic efforts via click throughs and loans closed.
Building A Better Business Together
Being the first to participate in this type of program offered a wealth of advantages but also a few challenges. For example, AskPatty normally collects its own customer survey data over a three-month time frame to assign company’s a satisfaction rating. A company must earn a score of 90% or higher for AskPatty to certify it.
But in GLCU’s case, the credit union worked directly with AskPatty to develop its own set of survey questions, tailored to its own members, business model, and desired service standards.
“We didn’t have to pay through the roof for a standard industry survey but instead could work with AskPatty to build our own, targeted, specialized process,” Malo says. “That was a huge upside.”
The credit union also provided AskPatty with a custom contact list of auto loans on which a woman was the main decision maker in the purchase, such as loans with a women as the sole signer or as the primary signer with a male secondary signer. From there, both companies spent three months gathering and analyzing comments and formulating new policies and best practices to help GLCU better connect the dots and reach that 90% threshold.
One best practice the credit union discovered was to have staff take the time to expressly confirm and explain the terms of a loan. Although these actions were already occurring to the degree required by law, loan officers who handled these matters day to day were simply moving through the items faster than the surveyed members preferred.
Other Niche Markets
GLCU participates in indirect lending and can attribute a significant amount of auto and member growth to that part of its portfolio. In the past year, indirect loans at the credit union have grown from $5 million to $13 million, and because it can make auto loans nationwide, GLCU initially focused on this part of the portfolio. But in the months and years ahead, the credit union will market to women and other niche segments for a wider spectrum of financial products.
For example, GLCU started making private student loans within the past few years. Such offerings seamlessly build on the foundation of the credit union’s CUNA MadCity Money Program — which provides brings real world financial education, tips, and training to high school students — and helps set the tone for later borrowing relationships.
“Young adults going off to school might not be ready for a car yet,” Malo says. “But this provides a great interim product.”