Biz Development Straight Up-& With A Twist

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Credit union business development is like a martini-it can be delivered straight up or with a twist, according to Delynn Daniels, senior marketing manager for First South CU.

The "straight up" portion, she said in remarks before The Credit Union Journal's SEG & Business Development Conference, includes practical steps such as strategic and tactical planning, benchmarking, tracking, and goal setting. The "twist" refers to incentive programs, motivation, training and non-monetary compensation credit union management might offer to its business development staff.

"You must have a sales and service culture," Daniels said. "This means motivated people who believe in the credit union. Training is a key motivator. It tells employees the CU thinks enough of them to invest money in their career."

For the straight-up" aspects of developing new business, especially via SEGs, Daniels recommends that the credit union not be in a hurry, and instead gather as much information as it can.

What's Important To You?

When planning for business development, she said the first step is to look to the CU's strategic plan. "Determine what is important to your CU; and what are its goals. Marketing and business development need to work together."

Develop a tactical plan from the strategic plan, she suggested, adding that the tactical plan must be a "living" document-don't create it and forget it.

She urged every business development officer or department to create benchmarks as a baseline for goal and incentive planning. Analyze what you can measure, what historical data you have, and how often you can get data in the future, she said.

"Goal setting is like the ingredients of a good martini: they must be smart goals, they must match the CU's overall direction and they need to use historical data as a baseline," Daniels said. "Work backward from a goal to determine the activity level needed to achieve the goal. If you want to add X number of SEGs per month, determine how many mailings or phone calls it will take." When a credit union is ready to add the twist, Daniels recommended it begin by adopting incentive plans that are linked to organizational goals. The goals and the incentive plans must have an impact on profitability, she said.

"It is best if there are a variety of activities to reward. A good salesperson is used to a base salary plus incentives," she noted. "Don't place too many restrictions or conditions on what qualifies for an incentive. Incentives must be achievable and measurable."

There is no need to reinvent the wheel if you don't have to. Daniels suggested looking within the credit union, or asking other CUs to share their plans.

The tracking and rewards aspect of incentive plans depends on if historical data is available. If no data is available, Daniels advised using specific timeframes for tracking and rewarding behavior performed. If the credit union has the data, it should create tiered goals with an incentive for each tier.

A sample transactional incentive plan would include: base salary plus money for new members, new accounts other than savings, direct deposit, and bill pay. A sample tiered incentive plan would include: base salary plus tiers on percentage of growth over baseline production, with payment at year-end based on achievement of tier levels. Typically, the four goal areas would be: penetration rate, new companies, new members, and checking accounts.

Other incentive ideas include: loan goals, deposit goals, retention goals (by number of members or companies), and product penetration rates, either by SEG or by member segment. "Each type of incentive plan has its pros and cons," Daniels acknowledged.

Types Of Incentives

First South has had success with transactional incentives, loan incentives, a checking tier, and a new company tier. These worked, Daniels said, because the board was able to track and control all of these factors.

Motivation-outside of money-can include award nominations, "brag e-mails" and other vanity awards, and mention in press releases.

"Goofy or unexpected incentives work well," Daniels told the conference.

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