For Community Charters, Lessons Follow The Expansion
Credit unions should be careful what they wish for, because they just might get it.
That was the message from Larry Jones, vice president of marketing for ORNL Federal Credit Union, in remarks before the National Association of Community Credit Unions annual conference here.
"A lot of credit unions are not sure what to do now that they are community charters," he said.
ORNL FCU was founded in 1948 by employees of Oak Ridge National Laboratory. In 1982, it began adding select employee groups. The ranks of those SEGs eventually grew to more than 3,000 groups, and the CU converted to a community charter in December 2002, and now is open to the 1.1-million residents of 16 counties in eastern central Tennessee, with Knox County as the hub. ORNL has 16 branches, 100,000 members and $775-million in assets.
The conversion to a community charter brought many changes, Jones said. ORNL had to embrace business development, develop strategies for marketing, advertising and the media, and it had to shift resources to promote community involvement activities.
"We're still struggling a little bit with business development," he said. "The first thing we focused on was an effort to maintain our relationship with our former SEGs. We developed a 'CU@Work' program and placed ATMs on work sites to compete with workplace banking programs. The problem was, we already were giving members a great deal, so to give something on top of it was giving away the store."
Knoxville is a single media market, Jones noted, which made ORNL's task of targeting a lot easier. On the other hand, the area is highly saturated with financial service providers, ranging from large and regional banks to start-up community banks, and there is intense CU competition.
The primary goal of the marketing strategy was to rapidly build membership throughout the area. Jones said ORNL was one of the first community CUs, which gave it a window of opportunity for a short time.
The credit union expanded accessibility by adding four branches in its first year as a community charter. ORNL installed numerous ATMs, and it participated in a statewide reciprocal, no-surcharge network of ATMs. It promoted one phone number for all branches, with calls being routed to a single contact center.
"We increased staffing in the contact center. We also receive e-mails there, plus we have a live chat function on our website."
ORNL used its promotions to emphasize all of its remote access services. Jones said the need for a brick-and-mortar presence still exists, but it is important to let people know they can join online.
The CU does not have any branches in grocery stores, but it did open a branch inside a Wal-Mart before the conversion. The branch handles mostly transactions, not loans, and it is a "victim of its success in a way," according to Jones. The long lines at the CU's teller windows sometimes block the store's checkout lines.
For most converts to community charters, dealing with the media and the general public is a strange new world. Instead of a built-in audience-employees of a company who generally understand what their credit union is and why they should join-CUs must prepare press releases, host press conferences and do more to get the word out.
ORNL created a public relations coordinator position as part of its increased emphasis on PR and media management. Jones said the credit union embarked on a mass media saturation advertising campaign that included television, radio and newspaper ads. The PR coordinator called on media outlets to learn what they are looking for to increase the likelihood of getting coverage.
"We get as much feedback as we can from member surveys to test the effectiveness of our advertising. The effect is not immediate, and is somewhat intangible. It is difficult to pinpoint why someone comes to the credit union."
As a credit union grows, especially if it has multiple locations, internal communications are vital, Jones said. "Every employee must be part of the process and aware of all promotions."
Part of the community involvement strategy was corporate giving and scholarship programs. Jones recommends sponsoring high-visibility events, such as arts festivals, which can mean prestige and free publicity. Credit unions can maximize publicity opportunities by coordinating information with the groups or organizations they partner with.
Overwhelmed By Requests
The problem is, the number of requests ORNL receives for community involvement is mind-boggling.
"Credit unions have to know what to expect. Giving generates an increase in requests for more giving, as does the publicity. Guidelines for giving are needed-decide how much to do and how much to give. Develop an application procedure. Be careful not to snub somebody: it can really turn on the credit union and become bad publicity."
ORNL created a community involvement representative position. However, Jones said once the program was up and running, the duties probably could be handled by the PR coordinator.
In addition to awarding scholarships to students at the University of Tennessee in Knoxville and local community colleges, ORNL is involved in area elementary and high schools. For younger children, employees read to classes. For older kids, the CU provides money management instruction.
"All of this is part of a formalized public relations plan, which is part of our overall marketing plan," said Jones. "The cost is dollars and man-hours. There is a need for continuous monitoring to make sure we are not so involved in the community, member service suffers. But, the return on investment is publicity and the enhancement of our corporate citizen reputation."
Publicity and reputation are intangible, he added, but ORNL had 14% member growth in its first year as a community-chartered CU, and 12% so far this year. Loan growth was up a net 21% in 2003, thanks to an emphasis on indirect lending. "Indirect lending gives a credit union an opportunity. Indirect lending made us the No. 1 lender in our 16-county area," Jones said.