LONGVIEW, Wash. and SYRACUSE, N.Y.—A unique "co-opetition" between two credit unions 2,800 miles apart has helped save their members more than $2.7 million.
The partnership came about after representatives from Red Canoe CU, a $578 million institution located approximately 50 miles north of Portland, Ore., and $1.1 billion Empower FCU, in upstate New York, met at a conference in 2012 decided to expand their existing loan-transfer programs into a cross-country contest.
The two CUs divided themselves into teams that included staff from both Red Canoe and Empower. With Washington being a major apple producer and Syracuse sharing a state with "the Big Apple," a contest dubbed "Apples2Apples" was launched, which also was a reference to the fact members could compare their payments on current loans with what they could pay by transferring to either Red Canoe or Empower.
Taking the apple theme one more step, the teams of 12 to 15 people adopted such names as "South Ciders," "American Pickers" and "Jersey Core," each of which had its own stylized logos.
The CUs' respective IT departments created a loan calculator that could show members how much they would save by bringing over their loans.
Michelle Trekas, Red Canoe's sales and service training manager, told Credit Union Journal the now-concluded co-opetition worked well because both staffs became "really motivated" once they saw the impact.
"One of our employees was working with a member and noticed they had a student loan at 13.25%," Trekas recalled. "She found the member had vehicle equity that gave her a secured loan at 2.99%."
The term on the member's loan was shortened from 186 months to 60 months, and the total interest savings was more than $12,000, according to Trekas.
"Stories like that are why it worked," she said. "The employee shared the story and that motivated other people. In a lot of cases members did not know how they could save. They did not know they could use the equity in their vehicle. One member had a rate over 20%. The tools and the stories were what worked."
Justin Roth, director of cultural affairs for Empower, said the approach was to make sure the co-opetition was "fun and engaging" for the staff.
"We added a dedicated website where the staff from both credit unions could log in and chat with each other and share success stories," he said.
Core Of A Legacy
The Apples2Apples co-opetition left a legacy: the new buyout calculator tool that shows members how much they are saving in interest, Roth noted.
"This was a phenomenal tool for our staff," he said. "We created signs that said, "Empower saved me $___." We took photos of members with their signs showing how much they were saving, which was one way the members were engaged."
Those photos will be used in the future on Empower's Facebook page, and during the fall marketing campaign on billboards, TV and print. "Additionally, we will spotlight these stories in our radio ads," he said.
The greatest benefit of Apples2Apples, said Roth, was saving members future interest payments. "It was $2.7 million total for the two credit unions, and we did that in just three months. We are excited and the members are loving it."
Final Numbers
To gauge the full impact of Apples2Apples, Roth said Empower looked at the first six months of 2012 vs. the same period this year. During the first half of 2013, loan balances-which included buyout loans-were up 20%. Comparing only the second quarters, buyout loans during Q2 2013 were up 27% year over year.
"What we saw during the contest period was buyouts were growing faster-almost 25% of new loans on our books were coming from the buyout channel," he said. "From a marketing standpoint it is easier to do business with someone you already have a relationship with, so this is a revenue stream that is not going to dry up."
Trekas said Red Canoe learned a lot from working with Empower, including tracking members' savings.
"It has given us new perspective on staff goals related to savings," she said. "We found the impact it had on members, who were excited, and on the employees, who were thrilled when we saw the numbers.
"We will continue to use the calculator as well," Trekas continued. "We are looking at developing new products and services that will make it even easier to look for other buyout opportunities."
