Investing In The Future Is A Better Approach Than Cost-Cutting Efforts

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The Chinese ideogram for crisis is the symbol for danger next to the symbol for opportunity. The challenge for credit union executives faced with both an increasingly competitive environment and an economic downturn is to identify and act upon opportunities, even when it means going against conventional wisdom.

Whether wise or not, today's mindset seems to be highly focused on reducing expenses. Traditionally this means cutting the sales budget, yet this can prove to be a costly mistake. Instead, a targeted investment in improved sales strategies and support activities can provide big payoffs without a big price tag. The question is, which CUs will become paralyzed by the economy's problems, and which will turn the problems into opportunities?

Community Credit Union's Challenge

"In the late 90s members were more payment conscious," says Chris Butler, CEO of Community Credit Union of Wisconsin. It seems the current economic environment is making credit union members more aware of rate fluctuation. Many Community Credit Union members are refinancing existing debt into low-interest mortgages that will allow them to pay down consumer debt, such as car loans and credit cards. The increased loan volume at Community CU comes with an accompanying increase in loan payoffs and restructuring existing debt rather than acquiring new debt. Helping members identify the best ways to restructure their debt has been a key component of sales training that has paid off by bringing in additional loan volume.

Other changes at Community Credit Union that keep them growing in a down economy include hiring a new business development staff person to conduct outreach to local businesses, a change in title from branch managers to branch sales managers, and providing ongoing sales training for all branch personnel.

Why Conduct Sales Training?

All of the efforts undertaken by Community CU underscore the importance of providing staff with special sales training. "We moved our sales culture up a notch in order to stay ahead of the competition. It takes more skill to get the business in today's climate," said Butler.

The sales process has evolved over time. In years past, success in sales was epitomized by one's ability to sell ice to Eskimos. In other words, success often meant persuading individuals to part with money for products/services they didn't really need. Now, selling is a much more consultative, member-focused activity. An effective salesperson works with members to build relationships and solve problems.

In professional baseball, a .300 batting average (hitting the ball safely three times out of every 10 opportunities) can mean a multi-million-dollar contract. Averaging one less hit may suspend a player from the major leagues entirely. A salesperson who makes just one extra sale out of ten presentations is a great deal more successful and has an enormous impact on an organization's bottom line. Sales training can make that difference.

Sales Training Techniques

Effective communication is the cornerstone of the sales training process. To this end, Community CU recently added an instructor to the sales training program who is a communications specialist from the local university.

A few simple, yet effective techniques assist staff members in their approach to members by enhancing their ability to identify needs and propose solutions. These include:

* You/Me Approach. Making a favorable first impression is critical. Demonstrate an interest in the member or prospective member. Offer a compliment, or talk about the other person first by saying something positive with which they will agree. For example, "I'm glad to see you here today despite the bad weather." Then introduce the product or service being offered.

* Ask and Listen. Salespeople need to pay attention to the adage: "There's a reason the man upstairs gave us two ears and one mouth." By asking questions and listening to the answers, salespeople create opportunities to uncover needs and expectations. This enables them to do a better job relating to members.

* Say It/Ask It. Make a statement, and then end with a question. This technique helps determine whether enough has been said on the subject or if there is a need for clarification or elaboration. The danger comes from salespeople who dominate the conversation without realizing that the listener tuned out. By asking a question, the listener is obliged to think and engage.

* Neuro-Linguistic Programming. This is a communications tool that helps build rapport. It involves matching behavior and style to the prospect's behavior and style. The technique includes nonverbal cues such as body language and posture and paralanguage prompts such as speech rate, pitch and volume. For example, when talking to an individual from the South, make sure your rate of speech is slower than it would be if you were talking to a person from the Northeast. When people are perceived as being similar, relationships evolve more quickly.

Marketing as a Sales Support Tool

The key to marketing, particularly in a tight economy, is to target the dollars precisely where they can do the most good. According to Kristin Dove, VP-marketing for Pacific Credit Union outside San Francisco, their approach is based on a philosophy of "constant and consistent," building name recognition through direct mail.

Direct mail is a more targeted approach than media advertising and can be accomplished with a smaller budget. Using the same premise, inside sales or tele-sales can be even more cost-effective than outside sales.

Butler uses a targeted tele-sales approach with new Community Credit Union members who are called for the purpose of discussing payment options on new loans. The call then provides the opportunity to talk about additional CU services available.

Turn Problems Into Opportunities

Although it will never generate revenues, cost cutting remains high on the list of priorities for dealing with the troubled economy. Yet, a small, targeted investment in sales training during an economic downturn can make the difference for credit unions seeking to gain a competitive advantage over other financial institutions. Such investments tend to yield immediate benefits and extend even greater payback when the economy turns around. Credit union executives must make the choice: continue to play it safe or run counter to conventional wisdom and turn the problem of a troubled economy into an opportunity.

Stanley L. Fidel is the founder and President of Fidel Communications Company, Inc., Scottsdale, Ariz.. He can be reached at 800-653-4335 or via

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