Most credit unions find their business development efforts lacking because those CUs don't have a business growth strategy, and they fail to recognize what business development is, according to Doreen Burton, senior marketing consultant with CUNA Mutual Group.
When Burton asked the audience at The Credit Union Journal's SEG & Business Development Conference how many of them have a business growth strategy at their credit unions, few hands went up. And that, Burton said, is a big part of the problem.
To start, Burton talked about what business development isn't. "Business development isn't a marketing function. It's a sales function," she offered. "When we talk about cross selling, there's always someone who says, 'We don't do that, that's not our philosophy.' Fine, don't cross sell. But make sure that your member service reps are having engaging conversations. If they do that and really reach out, then the products and services will come. Marketing is a support function, it is not the driving force. Business development is the engine and marketing is the chassis."
To create a strong business development program, a credit union must get buy-in from the entire staff, even those who don't "appear" to be doing any business development, but whose job function supports those efforts, even indirectly. "Everyone owns business development," she suggested.
One of the primary mistakes a credit union can make is to center BD efforts around certain products and services. "Your strategic direction must be organized around accounts and members, not products and services," Burton advised. "The relationship is the end, not the means."
The next step is to define the credit union's competitive position. "Shop your competition on a regular basis, and have your staff shop the competition," she said. "Give them some money to go open account. Once you understand your competitive difference, you'll know what your compelling message is. Your products and services can be copied, so dig deeper. Look at your credit union's personality, your organization's image."
Part of being member-centric instead of product-centric means not everything is about price, either. "Members are more likely to leave due to some service failure than price," she related. "Every touch has the potential to make a member leave. Every touch has the potential to win or lose that member."
That means employee training is key. "Your staff knows your members-they're neighbors, their kids go to the same schools," Burton offered. "You can't buy that kind of marketing."
Why do credit unions need to build these relationships? Burton listed the primary reasons:
* Improve current relationship
* Gain new SEGs
* Increase walletshare
* Create growth opportunities
"The largest growth opportunity is family membership development," she commented. "By having engaging conversations, you get the information you need. You can track their life cycle, learn how satisfied they are with you, identify your highly-profitable members."
To get to that point, a credit union needs to determine what it really knows about its members, what it needs to know, what resources are available, and where are the gaps.
"When a credit union uses service as its strategic competitive difference, this is a compelling message," she said. "But is this supported by our members' experience?"
Burton related how State Employees CU in Lansing, Mich., realized it had to revamp its SEG recruitment strategy. "They would acquire a SEG just to pick up one person. They did it all the time, and anyone could sign up a SEG," she related. "The had about 11% penetration in their 350 SEGs."
The credit union wasn't making the most of its existing SEGs and wasn't being strategic about which SEGs it was going after. "They had to change the entire mindset of the credit union and bring business development to the forefront," she noted. "They targeted about 30 of their top SEGs to really focus on and brought that penetration rate up to 50%. They went to a community charter and filled the voids they had in their product and service lineup."
Telhio CU in Columbus, Ohio, created a Casino Night to wow its "top" partners. The CU identified its top 300 partners and invited them to just have fun at the event with no hard sell. All 300 people who were invited showed up.
The goal, Burton said, was to develop 10 good leads, increase SEG penetration and develop relationships with some of the dealers in the indirect lending program.
The results: leads were generated for investment services and mortgages, the CU increased the penetration of two new SEGs, three new dealer relationships were setup, the CU met its budget and multiplied goodwill because members loved it.
