APPLETON, Wis. — Going against the grain and boosting marketing efforts during the recession has paid big dividends for Community First Credit Union as the $1.17- billion institution earned the third spot overall on Callahans' Return of the Member rankings. While many businesses slash marketing first to get their budgets in order during bad economic times, CEO Cathie Tierney, who spent most of her career in the marketing business, takes the exact opposite approach.
"We do a lot of advertising. We've really stepped things up. A lot of people have thought that with way the economy is, the natural tendency would be to step back," she explained. "The last thing I would ever consider cutting is marketing and advertising because you have to be in the forefront. That's the place where you want to make the most investment when things slow down. Quite frankly it's a great time for credit unions; it's our opportunity to wave the white hats and shine, [and] we're seeing the fruits of that labor."
Those fruits have come in the form of solid growth in deposits and loans-Community First's lending portfolio grew by 24% last year. That growth touched off at the very beginning of 2008 as the credit union offered a 3.95% loan special for members that had a checking account and direct deposit. The rate was applicable to any type of secured loan and turned out to be extremely popular.
"We did $158 million in loan business in four days. It was incredible. That kicked our year off like nothing else," Tierney said.
Right now the credit union's phones are "ringing off the hook" from members eager to refinance their homes because of the low rates nationwide. Tierney has gone so far as to re-hire retired employees to deal with the volume. Community First is also offering its own "stimulus package," which has been widely advertised, that offers members an up-front no interest loan equal to the federal credit for first time homebuyers. The loan allows members to boost their down payment; helping them get into the home and helping the credit union pick up a new mortgage.
Auto loans and consumer loans are down in the Dairy State credit union, but Tierney is upbeat about the prospects for credit unions on the commercial side.
"There's one area where it is out there for the taking, if you can get the word out, and that's in the business and commercial lending," she pointed out. "There are all kinds of wonderful opportunities. We don't have to advertise and we have as much business as we could hope to handle."
Aside from its one time loan special, the credit union constantly incentivizes its checking and direct deposit by lowering loan rates and boosting long term deposit rates by 1% for all members who have those products. And with members fleeing from risky investments to stable growth deposit products, that one percentage point can make a big difference.
"We've seen some growth in the money market accounts," Tierney pointed out, adding that other fixed income products like short-term CDs have also seen a spike in popularity. "We try as best we can to keep our maturities on the short side, so we do a lot of specials with 13 to 14 months. That seems to be a sweet spot for us."
