Cost-Effective Cross Sales

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ATLANTA-Cross selling to build deeper member relationships was an important goal during 2009 planning sessions. Now for 2010 strategy meetings, it is imperative.

Gee Gee Kaufman, director of consulting solutions for the Lombard, Ill.-based Raddon Financial Group, asserts that increasing revenue pressures make it much more critical for CUs to look inward for growth. "Why spend thousands of dollars to acquire new members when you have tens of thousands of members you have already acquired? That is the most cost-effective way to grow, and you are building loyalty."

The first step, he said, is to determine if there's a sales and service culture. If not, it should plan to introduce sales training and incentives, which also focus on selling the "right products and services-relationship banking types of services where members can aggregate deposits and loans and avoid paying certain fees. You are selling a value proposition."

Kaufman said the strategy ensures sustained profitability at a time when some many are focused on cutting costs than driving revenue. "In my 30 years of credit union consulting, the typical way a CEO looks at profitability is reducing expenses. You cannot reduce expenses to become profitable, not on a sustained basis. At some point you [have to] ask, 'How much more expense can I drive out of the organization without impairing franchise value?'"

NCUA assessments are also a problem. "The NCUA is forcing CEOs to say 'I have had it,'" said Kaufman. "I expect more CEOs will give up, throw the keys over the teller line and say, 'Take my credit union please. I can't make progress and I am tired of fighting the economic, regulatory, and interest rate environments.'"

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