CUTS! (Credit Unions Take Stock)

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Are you the kind of leader at your credit union who has the guts to create a place where fully impassioned people show up every day?

That was just one of many tough questions posed by an analyst who has studied category-leading businesses and written in-depth about them.

In remarks before CUNA's Marketing & Business Development Council, Kevin Freiberg, author of "Nuts" (about Southwest Airlines) and "Guts" (about numerous companies that have displayed excellence), said, "It takes guts to truly be insanely great and build a dramatically different brand for the credit union."

Branding, which has come to the forefront of many credit union discussions and which was a part of the CUNA Marketing and Business Development Council agenda, is not an ad slogan, stressed Freiberg. "Brand is the promise of a pending experience," he observed. He cited companies such as Southwest Airlines and Starbucks and added, "Successful companies have built branded cultures. Their work environments are almost as famous as the stuff they sell."

Frieberg asked credit unions what it is they say about the experience someone will have if they are hired. What will that prospective employee or new employee expect will be delivered?

After 20 years of research and three books examining brand-leading businesses, Freiberg said he and his wife, Jackie Freiberg, with whom he co-authors his books, have learned that, "You must embrace a dramatically different approach to getting smarter, faster. I would take pity on the credit union that gets lazy with learning." He pointed to Henry Kissinger's observation, "Each success only buys an admission ticket to a more difficult problem" as the challenge each CU must face.

"You're never more vulnerable to laziness and complacency than when riding the wave of success," he said, citing another quote that reads, "In times of drastic change, it is the LEARNERS who inherit the world and it is the LEARNED who live in a world that no longer exists."

One question credit unions should mull over, said Freiberg, is what is the next wave beyond the Internet? What's the next wave of connectivity for you and for your members, asked Freiberg. "You have to start to connect in a way that helps the member manage their financial concerns. It has to be more than just a nice financial statement and more than just a detailed report. It has to be, 'here is the information and here's how we at the credit union can help you.'"

For the credit union community in general, Frieberg had this advice: "You have to bind yourselves to one another and speak with one voice. If not, you're going to get creamed," he said. "The banks have a great deal more resources than you have, but I think you can hold off that onslaught and be successful. Your credit union should be a junction box of knowledge. This is how credit unions should brand themselves."

Freiberg had four questions for credit unions and their executives:

* What have you learned in the last three weeks that brings value to your credit union?

* When was the last time you seriously studied the winners in areas where you want to improve?

* What was the last best practice you adopted?

* Tell me in five minutes or less why we shouldn't outsource your position and the marketing function?

Another question he said every credit union must answer for members - "what have you done for me yesterday?" - is necessary before any member will ask what can you do for me today," he said.

What credit unions must understand, Freiberg advocated, is that they are not in the financial products business. "I would argue you are in the financial solutions and experience business," he said.

The issue becomes decommoditizing the financial services experience. "Anybody can quote me a rate and a fee. What makes you unforgettable?" he asked. "It is the experience around those financial products that makes you unforgettable. Who delivers that experience to your members? Does that member feel anticipated, do they feel welcome, and do they feel known?"

Freiberg cited an observation made by the authors of the book "Funky Business," who noted, "You and I operate in a surplus society with similar companies with similar people with similar educations who have similar ideas about similar products and services."

As an example of service becoming a brand, Freiberg cited Planet Honda in New Jersey where customers are given a yellow smiley face tag in which the facial features are actually the letters "JL" for "Just Looking." No sales person will bother a customer until that person removes the JL tag. That dealership sold more than 6,000 Hondas last year, but what is most notable, said Freiberg, is they sold those vehicles at an average of $500 more than competing Honda dealers. The reason is customers are willing to pay for the experience.

"To dramatically differentiate yourself you don't have to give it away," he noted, crediting credit unions for being the low-cost providers in most markets. "But if you are competing solely on price you are likely in the process of cutting your own throat. When I ask, 'What do you do differently?' you likely will answer, 'We give the personal touch.'" While Feinberg said he fully supports credit unions and the need to provide that touch, he added, "That's not a good answer, because some bank is going to figure that out, too. You must get members engaged and you must add value. You know how to create a radically different experience. Do you have the guts to do it?"

Before closing, Freiberg had another question for credit unions, which led to some nervous laughter and nods. "Eighty-five percent of financial decisions are made by women," he noted, before asking, "What does your board look like? Does it reflect that statistic and does it reflect the market you serve and are trying to reach?"

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In remarks before the CUNA Marketing & Business Development Council, author Kevin Freiberg, who with his wife is working on book No. 3, recommended a number of books and businesses from which credit unions could learn, including...

...his own book, NUTS!, which profiled Southwest Airlines and the "crazy recipe for business and personal success." That's former CEO Herb Kelleher on the cover at left....

...and Funky Business, which examines the role of human capital as the only means of differentiation when everything is similar at companies, including backgrounds and ways of thinking...and Planet Honda, a New Jersey car dealership that has a decidedly different way of doing business and selling cars.

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