CUJ Reader Question #1

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Have any of your credit union clients seen a demonstrable boost in lending when they have put a car or boat on display in their lobbies?

Tom Lombardo, HBE Financial Facilities, St. Louis

A recent remodeling and expansion program for our client, the Anheuser-Busch Employees' Credit Union in St. Louis, features a large display area for cars, boats and other major consumer products. Although the expansion was completed only six months ago, the credit union reports that the display area has already been successful in building awareness about their auto loan products, especially when a special loan promotion is also being offered. The bright yellow sports car currently on display has prompted many member inquiries, and that has provided member service representatives with the opportunity to promote the CU's loan products, as do video displays in the lobby and merchandise display area.

The ABECU indirect lending partner-local automotive dealer-has also indicated that it has done business with CU members based on the lobby display. ABECU is also considering using the display area for home improvement products as a way to promote home equity loans.

In addition to promoting specific loan products, the display area serves another important purpose. It supports the ABECU's overall goal of creating a dynamic, retail "destination" that will build member interest in visiting the CU and learning more about its entire range of products and services. The newly remodeled lobby also features a complimentary coffee bar, online computer stations, lighted signs and other features.

Cynthia Grow, DEI, Inc., Cincinnati

Absolutely! DEI helped Seaboard Employees Credit Union create an ideal environment for increasing loans. There is a display area in the lobby to show off the latest model vehicles or other consumer products that may be purchased by getting a loan through the credit union.

Typically, Seaboard Employee's loan increases were approximately 8% before the addition of the display. Within one year, their loans increased 20%. There was an additional loan increase of 23% the following year. The vehicle display in the lobby seems to have been a contributor to this trend. SECU member service reps talk to interested individuals and provide more information on the vehicle and options available for purchase.

The dealers are now more willing to give them loan opportunities in exchange for valuable floor space in the credit union's showroom. The display definitely generates both interest and loans.

Ralph La Macchia, La Macchia Group, LLC, Waukesha, Wis.

In the past, we have been involved in a number of projects where this concept was designed into the space. There are a couple of options for display. An outdoor display is less expensive and provides significant value. The design and location of the pad will affect the success of this approach and we strongly suggest the pad be slightly elevated and well lit. Building it close to the entrance and drive-ups is also a great way to maximize interest in the product and corresponding loans.

Some of our clients have decided to allot space for displays within their buildings, which can be effective in generating interest, but more costly due to the space needed to display large items. No matter which option you choose, we encourage marketing this idea to local or nearby dealers of these vehicles. Not only to get the display item but also to send approved buyers to them, and good referrals for loans to you.

Another good marketing strategy is to post payment and lease options on the item with perhaps graduated payments- the more accounts the buyer has with the credit union, the lower the payments. This paints a clear picture to members and encourages more accounts. It may be a simple home equity loan to you but to your member, it's a new boat!

The bottom line is we have asked credit union presidents about this feature specifically and we have been told they would do it again.

Gene Lock, Design Build Concepts, Atlanta

The most important consideration in a decision like this is how to best use your space to serve all of your members' needs, both now and in the future. The challenge with a boat or car promotion is that it is just that-a promotion. It is not a permanent fixture, and after the promotion is over, you are left with a wide-open space.

There are a variety of ways to generate demand for loan business without affecting the long-term space planning and workflow of your new facility. A better approach would be to integrate retailing solutions into your new credit union. With good zoning, a lobby can become a financial mall with stores defined by color, finishes and signage. This is a great way to direct members to your diversified offerings of products and services, and educate them about your loan services.

A comprehensive marketing plan that integrates retailing and merchandising techniques provides greater flexibility than a boat or car promotion. Merchandising displays and artwork, like wall murals, kiosks, and banner stands, not only capture member attention in a high traffic areas, but they also complement the interior design scheme by offering visual impact. In addition, well-placed signage featuring photos of boats, cars, vacations, homes and other big-ticket items can generate demand for a broader spectrum of items and a wider variety of services than a boat or car display. One major advantage of the merchandising approach is that it is dynamic-it allows your key messages to change as your products evolve over time.

Merchandising can raise awareness about special promotions and reinforce your credit union's brand image at the same time. A well-designed marketing campaign, including your website, direct mail, and in-store retailing, sends consistent messages to your audience that allow you to differentiate your offerings from the competition. By crafting a marketing plan that conforms to your changing needs and objectives, you will benefit from an aggressive strategy that promotes cross selling while making the best use of your facility resources.

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