How DECU Has Combined Tech With Touch To Grow
MOLINE, Ill.-A business model that combines high tech with personal attention has helped credit union double assets in the last five years.
Deere Employees CU, which serves employees of John Deere, believes in the human touch for meeting certain member needs-such as joining the credit union and financial advice. Otherwise, it relies primarily on online channels and its call center.
But the current business model was not in place seven years ago, at a time when the CU's growth paced slowed. DECU realized it needed to add a stronger presence at its sponsor locations to assist online channels, and began adding one small office a year, bringing its total number of sponsor locations today to 16 nationwide. In that time, assets jumped from $200 million to $471 million.
"Our growth really comes when that member joins the credit union," said CEO Bill Stangler, who said its offices at sponsor companies are one-person shops. "Our main goal is to get as many products into members' hands as soon as they sign up. We are very much the sales-driven organization."
The credit union has incentive programs for those managing the sponsor-site locations, Stangler said. "We are ranked by Raddon in the 95th percentile among our peer group for services per household. We typically open three to fours services when a member joins."
Giving Members Incentives
Members are also given incentives to take multiple services, such as higher rates on CDs and lower loan rates. "When members come in for the first time and see a friendly face, that's where we get our growth," stated Stangler, who noted the CU's membership has been a steady 4% since adding the extra offices at sponsor companies. "Online is a great tool, but members want to speak with a person when they join-and that is a sales opportunity."
The heavy emphasis on online channels and the limited staff at the rent-free branches have enabled DECU to post an operating efficiency ratio below 3%. "At the start of each year our goal is to earn 1% ROA, and we work in a manner that makes that achievable and sustainable, even with NCUA assessments," said Stangler.
While staff at the sponsor sites can handle most any transaction, Stangler said that team is in place to build relationships, often acting as a personal banker. "These employees are the face of the credit union. A lot of our new enrollment comes from word of mouth. And I don't think we'd get that if employees within John Deere could not refer coworkers to a CU staff member at their facility. That common name and face is so important to growth."
Having someone on site also creates a stronger bond with the employer and gives advertising a boost, Stangler said. "Part of our staff's duties is being a liaison between the employer and the credit union. I think our advertising programs would not be as effective if we simply e-mailed them to the employer. I think they would be as effective as a billboard on a highway."