Credit unions that want to up-to-date data, quarterly performance analysis, and industry best practices turn to Callahan & Associates. But where do suppliers go to learn how to best serve their credit union clients? Turns out, they turn to Callahan & Associates, too.
Callahan held its 2014 Suppliers' Conference on Friday, Feb. 21 in its Washington, DC, office. This annual event takes place prior to the kickoff of CUNA’s Governmental Affairs Conference and brings together credit union executives and major vendors. The daylong session offers an intimate setting in which the two groups discuss and debate ways to build upon or improve vendor-credit union relationships.
“There’s no shortage of discussion,” says Jim Hayes, CEO of Andrews Federal Credit Union ($1.0B, Suitland, MD), who participated in the 2014 conference.
In addition to Hayes, this year’s credit union representatives included Jennifer Hancock, director of vendor management at BECU ($11.9B, Seattle, WA); Kendra Johnson, vice president of finance at Money One Federal Credit Union ($104M; Largo, MD); and Marty Wye, CEO of NARFE Premier ($150M, Alexandria, VA). In a panelist-like, Q&A setting, each representative talked about their institution’s vendor-relationship strategies, the factors that influence their buying decisions, and the request for purchase (RFP) process.
Contracts that include automatic renewals were at the top of the panelists’ no-go list. Instead, these credit unions want to work with vendors who earn renewals through due diligence and valuable services, not missed deadlines or one-off perks.
“Don’t try to win my business by taking me to golf,” Hayes says. “Maybe that worked in 2005, but it’s not working today.”
Additionally, the panel noted the importance of strong vendor-credit union partnerships that extend beyond a simple exchange of funds for service. The relationships that foster honest, open communication are the ones in which the credit union and the vendor grow together.
To ensure they are getting the most out of their vendor partnerships, the panel expressed a preference for shorter contracts. According to Johnson, Money One does not like to sign contracts that extend longer than three years. This enables it to terminate a contract sooner rather than later should a vendor fail to live up to expectations. Additionally, Johnson said credit union referrals play a large role in her credit union’s decision-making process — along with auto-renewal limitations, compliance capabilities, affordable pricing with capped increases, and fast, reliable service.
“We want cutting edge but not bleeding edge,” says Johnson, regarding the trade-off between service and price. And because the best price does not always represent the best choice, Money One reviews every competitive bid in search of the best individual fit.
NARFE Premiere requests an in-person demonstration for its vendor products and services. And to manage its existing contracts, it uses a web-based tool that reminds the credit union when it is time to renegotiate to avoid auto-renewals.
BECU looks for strategic partners that can see and help implement its vision for five or 10 years down the road, Hancock says. She lauded vendors that can help institutions attract new members by marrying an individual credit union’s infrastructure, products, and processes. After all, one size does not fit all, and it’s efforts like these that build an improved, distinct business model. That’s why when the credit union is considering a new partner, it asks a series of questions for which it expects answers tailored to its specific needs.
“Don’t just send me marketing materials,” Hancock said after relating an incident in which she received a form letter mistakenly addressed to Navy Federal Credit Union. “I’m not really interested in what you have to say if you’re not really interested in me.”
Initial outreach efforts are one of many challenges vendors face when trying to sell systems to credit unions without a pre-existing relationship. The panel agreed that email, not voicemail, is the preferred point of contact. Email often necessitates a quick response and spares uninterested credit unions from an unwanted and unproductive conversation. However, according to Hayes and Hancock, a swarm of incoming emails can overwhelm email recipients, who then neglect to answer all backlogged communications. If that’s the case, the message is clear: The credit union is not in the position to give the vendor its business.
“If we’re not being responsive, chances are we’re not looking for a re-bid,” Hancock says. “Let us come to you.”
Hayes agrees. “If I haven’t responded to you, you’re not on my radar screen. You’re not going to force your way on.”
When a vendor is able to make contact, the panelists say it is essential to prepare ahead of time. According to Wye, part of any sales process includes researching the target. “Understand the size of the credit union and its operation,” he says.
Hancock agrees. “If the tool or solution isn’t useful to me, then you are wasting both of our time. Bring us a solution, not a beautiful, glossy flyer.”
But even after the contracts have been signed and relationships have been built, miscommunication can still wreak havoc. Several vendors in the room asked what to do if a system fails but a credit union fails to notify the vendor. Nobody wins when a credit union chooses to suffer in silence. The panelists admitted they should know when their systems are not working at full force and should notify the vendor if that occurs. Such action on the credit union’s part is the only way to know vendors are both cognizant of and working toward fixing the problem.
Are you interested in attending the 2015 Callahan & Associates Suppliers’ Conference? Credit unions and vendors of all sizes are welcome. Click here for more information.