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
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.