Breathing New Life Into Credit Life, Credit Disability
Credit Union: Potlatch No. 1 FCU
Nominated by: CUNA Mutual Group
Nominated For: Re-Presenting Its Credit Life-Credit Disability
New products aren't always the secret to increased profitability and member service. Sometimes, an existing service delivered more efficiently and effectively has a better chance of making a difference to credit unions and their members.
That's what Potlatch No. 1 Federal Credit Union discovered when it invited CUNA Mutual Group representatives Kelley Adamson and Tom Rice in to train the staff on ways to better present the credit life and credit disability insurance says Chris Loseth, Potlatch's chief executive officer.
"We had these products for years and years and years but had done little to explain their benefits and features," says Loseth.
That changed in December 2002 when the $154-million credit union began a concerted effort to cross-sell insurance protection with its loan program. The goal was to increase income but, more importantly, provide members with greater financial security in the event they faced a life-threatening event, Loseth says.
"There's nothing better than being able tell members their loan payments will be taken care of if tragedy occurs," says Loseth.
First, however, both the credit union and CUNA Mutual knew that staff needed training to see the insurance policies not as impediments to the loan-granting process, but as key member service components.
Adamson, CUNA Mutual's lending protection manager serving Potlatch No. 1, was the key to this understanding. All parties realized this needed to be more than a mere product orientation. "We needed to train staff to be successful," Loseth says.
Using the popular business volumes "Who Moved My Cheese?," and the "Fish! A Marvelous Way to Boost Morale and Improve Results," Adamson began changing the staff's point of view through her Lending Development Training Efforts.
After years of benign neglect, the insurance products needed some active attention, says Loseth. But before the members' viewpoints could be changed to see the advantages of credit life and credit disability insurance, those of the staff had to change first, he says.
Potlatch No. 1 is in the middle of what Loseth says will be an 18-month effort, but the credit union already is seeing excellent results.
Between April 1 and Sept. 30, Potlatch No. 1 has increased its fee income from these products by 87.8%. Loans covered by credit life insurance increased 51.5% and those covered by credit disability insurance by 11.8%. The credit union's average financial increase has been in the neighborhood of $11,800 per month since the start date.
The best thing about the program, however, is not the increased fee income, but the added protection it provides borrowers, Loseth says. The executive is so pleased, in fact, that he's applying the same methodology to other credit union products and services, including a member loyalty program.
"We're not interested in instant, short-term success," says Loseth. "We're interested in a long-term change on how we serve members."