Why Education is Critical

Credit unions are different from banks - how many times have you heard it? But it bears repeating over and over, and that the benefit of the difference is reaped by the member.

One big difference between credit unions and banks is that credit unions genuinely try to help their members. And this takes the form not only of putting more money in member pockets this month but also of helping members to understand how they can put even more money in their pockets over their entire lifetime. Credit unions do their best to educate their members in financial affairs.

 
 

Credit unions are different from banks - how many times have you heard it? But it bears repeating over and over, and that the benefit of the difference is reaped by the member.

One big difference between credit unions and banks is that credit unions genuinely try to help their members. And this takes the form not only of putting more money in member pockets this month but also of helping members to understand how they can put even more money in their pockets over their entire lifetime. Credit unions do their best to educate their members in financial affairs.

Take the following example. A member who is buying a car calls a credit union to learn if the credit union can match 0% financing. An employee might say, "No, we're at 3.9%," at which point the member hangs up. A helpful and alert employee would instead guide the member through a sort of education process by which the member would understand that taking the credit union loan would save him or her money in the long run.

The conversation might go something like this:

Employee: "And in order to get dealer 0% financing, do you have to surrender a 'cash back offer?'"
Member: "That's right. Four thousand of cash back."
Employee (after quick work): "You're better off taking the four thousand cash back and then using our loan. Over the life of a five-year loan, you'd have $1,800 more in your pocket."

So the credit union has saved the member money but has also taught a lesson: Work through the terms of loans and compare them to alternatives, because what looks good at first glance is often not the best money-saver over the long haul.

We call this kind of activity Education as Marketing. We believe that education - about credit unions and about family finance - has to suffuse everything we do. Education has to be both deep and broad. It has to touch the Board, managers, employees and members, and it has to spread out into the community, the financial services marketplace, and the legislatures.

But of utmost importance is the education of employees. If they don't understand credit unions they can't possibly educate members. Credit unions cannot afford to hire order-takers; credit union employees have to be pre-trained or be capable of education on the job so they can have intelligent conversations with members.

If a potential new member were to walk into a branch and ask, "What's a share?" only to have an employee answer, "Oh, it's not so important to know; it's really a deposit," then we haven't made a mark, we haven't advanced the ball.

Vital to the effort of an educated employee is the resource of an Intranet from which the employee can access information he or she needs in an instant, mainly information about products and about the credit union. Patelco's Pay for Performance system puts training on its Intranet; employees can self-educate at any time. Patelco employees also have all vital product and institutional information available at their fingertips. GTE Federal CU has manager training on its Intranet, as well as CUES University and more.

If the employee does not understand credit union philosophy and benefits, then the knowledge is very likely not going to get to the members.

Another resource for education is the Website. Here can be information about the nature of credit unions and credit union products. Mortgage calculators as well can have training materials about refinancing at lower rates. A good Website will demonstrate - without hype, because hype is not needed - to any member or potential member that a credit union is the best consumer choice.

Education and Public Policy

There is more to employee and member education than meets the eye at first glance. One day - and it is coming sooner than most credit union people think - there is going to be a public policy debate over the continued existence of credit unions. Americans will have to decide whether or not they feel it is important to support the not-for-profit financial cooperative way of doing business. Many interests will say that it was all well and good for little credit unions to do what they did in the Depression but now many are huge and full-grown and it is time for them to pay their taxes.

Ed is fond of saying, "Credit unions are the nation's best kept secret." It might also be said that "credit unions are the nation's least understood business model." Many critics will say we go too much against the grain of the American way of life, that we run contrary to "rugged individualism," and of work for profit. They would say that we are somehow "communistic," that working by cooperation for the good of all is somehow anti-capitalistic, anti-competitive, in restraint of trade and, in fact, somehow un-American.

When the day comes of the big policy debate, we'd better have millions of people who understand all that credit unions have done for the citizens of this country, that how credit unions do business is as American as apple pie and of immense service.

But it is not going to happen because we want it to happen. It is only going to happen if we educate our employees, who will then educate members. There is a great deal at stake: the survival of credit unions, and the survival of all the good that credit unions do for the people of America.

Educate your employees; educate your members.

 

 

 

Nov. 3, 2003


Comments

 
 
 
  • I AGREE WITH THE PREVIOUS COMMENTS. WE NEED TO GET OUR STORY OUT TO THE WORLD.
    Anonymous
     
     
     
  • I concur with the previous comment!
    Anonymous
     
     
     
  • Getting the word out in the form of Television, Newspapers, Billboards is an excellent idea. CEO's, CFO's, Board members call your associates and form a combined Credit Union Advertising Fund now.
    Anonymous
     
     
     
  • Getting the word out in the form of Television, Newspapers, Billboards is an excellent idea. CEO's, CFO's, Board members call your associates and form a combined Credit Union Advertising Fund now.
    Anonymous
     
     
     
  • I found the article interesting but as much as anything it causes me to resurface a common question: Why haven’t credit unions pooled their resources to work with a progressive ad agency to create the “credit union” brand. We should be seeing ads on the major networks during prime time that speak to the virtues of credit unions and why they are different than for-profit financial institutions. Individually credit unions should only need to be marketing the virtues of their particular CU rather than the CU brand. I realize that CUNA is doing some work in this regard, but it is time to put this effort in the hands of someone else who has a track record for creating national brands!
    Anonymous
     
     
     
  • Here Here! I'm in total agreement!
    Anonymous