MILWAUKIE, Ore. — Being a top-rated credit union isn't for the faint of heart.
Just ask Ron Barrick, CEO of Advantis CU, which took the top spot in three of the four Return of the Member rankings by Callahan & Associates.
The $705-million CU, headquartered in this suburb of Portland, ranked first in its asset range ($500 million to $1 billion) in Return of the Borrower, Member Service Usage and the overall Return of the Member ranking. "It is unusual to be ranked No. 1 in two different areas," CEO Ron Barrick noted. "We feel like we need to be able to compete on price, service and convenience. We have a low operating expense ratio, which leads to more competitive pricing on deposits and loans. That tends to lead to higher average deposits, especially on deposits."
According to Barrick, a review of the CU's 2008 expenses shows an "aggressive" loan-to-share ratio. He said a likewise "aggressive" operating expense ratio helps to maintain a highly loaned out status. "The Callahan's statistics take into account the fact we return more of our income back to our members. We provide more aggressive deposit rates and lower loan rates."
Operating expense ratio is more about income than expenses, Barrick asserted. He said while Advantis concentrates on keeping expenses low, there also is an emphasis on generating income. "We have about 38,000 members, and we try to make ourselves as convenient as possible. We have five visible branch locations, but we don't have the most branches in the Portland metro area. So we promote our alternative channels, such as home banking and bill payment, our call center, our voice response system, and ACH. Also, we are pretty aggressive with our point-of-purchase lending-mostly indirect auto loans," he added.
In the area of service, Barrick said Advantis partners with DMA, or Database Marketing Agency, a consultancy headquartered in Portland. DMA's consultations are based on demographics, which Barrick said leads to marketing aimed specifically at potential members based on their needs and the possibility of them buying the CU's products and services.
"DMA gives us the demographic information, and targeted marketing means we identify and go after certain demographics, rather than going after the whole area," he explained. "We do some mass-market advertising, but mostly we concentrate on targeted marketing. Based on the information, we might promote checking or a CD, based on peoples' needs."
Barrick attributed the CU's top ranking in Member Service Usage to its sales staff, which he said is coached and incented to listen, ask questions, identify needs and expand member relationships. "We try to incorporate all of those factors into our training and put a great deal of emphasis on it. We measure it by tracking net promoter score. We follow up to determine how good of service we provide, from the members' perspective."
One area where Advantis keeps costs down is actively managing inactive accounts. This is "not a very glamorous" endeavor, Barrick acknowledged, but he said the CU always encourages people to reactivate their accounts before the move is made to close them.
"This cuts down on expenses because we aren't carrying them on the system. If someone only has $5 in an account, they are dragging down the other members.
"One of the keys to our success is not trying to be all things to all people," Barrick continued. "We position ourselves as the financial institution of choice for people who are looking for a terrific service experience and consistently good financial value.
We try to maintain a good balance of competing on price, service and convenience, because all three are important."
