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Orange County Teachers FCU CEO Rudy Hanley, for instance, urges CUs to go back to elementary school recess to illustrate the two primary methods of achieving growth.
According to Hanley, credit unions have two methods to grow: increase products and services, or increase the markets served. Combining the two creates a box akin to the children’s game of “Four Square.” The box is formed when both new and existing products meet new and existing markets.
SQUARE A
Existing Products in Existing Markets
Existing products can grow in existing markets if CUs enhance or differentiate their offerings, market or promote in a new way, or cross-sell more effectively, according to Rudy Hanley.
“Cross-sell is not a dirty word,” Hanley declared. “It can be good if done in a way that informs the members and allows the members to select what they want to do. But you can’t push people too hard–members don’t want to hear the same offer three or four times.”
There are many ways to enhance products and services, but Hanley warned CUs to be cautious the enhancement does not cost more than the resulting benefit. “If expenses cannot be controlled, think long and hard about the benefit of the new product or service. Some credit unions have high expense ratios but still are successful.
SQUARE B
New Products In Existing Markets
To Rudy Hanley, this is the most logical step towards stimulating growth. “Credit unions already know their markets, so introduce new products and services.”
For credit unions to differentiate themselves, they must develop something innovative, he continued. “It is easier for us because we serve school employees, which is a unique group. If something was so easy to do, we could do it every night and everybody else would do it. It takes a long time for new products and services to bear fruit.”
SQUARE C
Existing Products In New Markets
This square includes field of membership expansions, including adding employer groups or converting to a community charter. It can be the correct strategy, when all elements are properly valued and positioned, said Hanley. “Credit unions must focus and align everything. There are many different ways to expand, but remember expanding the field of membership changes the way a credit union serves its members. If we were to go community, our underwriting standards would have to change dramatically because the general population is very different from school employees.”
SQUARE D
New Products in New Markets
This square has the advantages of Squares B and C, as well as the challenges of Squares B and C, Hanley explained.
