CORONADO, Calif. — If you want to grow, you have to be meticulous about measuring everything.
Just ask anyone on the U.S.S. Nimitz, suggested Sam Kilmer, vice president of market development for Harland. A speaker at CU Journal's Grow Show, Kilmer was among the lucky Grow Show attendees who got a special tour of the world's largest aircraft carrier.
"After going on the Nimitz last night, I went to the Nimitz website. Do you know what is the very first image you see on the site? It's the camera that fils every single take-off and landing on the flight deck," Kilmer related. "That's how important measurement is in the military, and that's how important it should be at your credit union, as well."
Kilmer urged credit unions to drill down to the micro level, even down to household relationships, if they want to grow their membership.
"Credit unions lose fewer members out the back door, but they are bringing fewer members in the front door compared to banks," he said. "Look at the open-close ratio [the number of new accounts open relative to old accounts closed during the same time period]. Credit unions have a1.68% open-close ratio; 1.17 is typical for banks."
The good news, Kilmer suggested, is that one reason banks are better at bringing new customers through the door is because they have to be-they have a harder time keeping existing customers, particularly right now during all of the economy-induced merger mania.
"When banks merge, it provides opportunities for everyone else, it's the gift that keeps on giving, and right now we have a lot of gifts that keep on giving," he said. "Now is the time to be stealing market share."
Kilmer offered up seven successful growth initiatives for credit unions to evaluate:
- Branding. Pointing to a recent rebranding effort by Charter Oak in Groton, Conn.; Kilmer noted that a true branding effort goes beyond redesigning a logo. Charter Oak, for example, "deputized" a culture warrior at each location to spearhead efforts to ensure that the CU's culture matched its brand and vice versa. (For more on Charter Oak's rebranding effort, go to www.cujournal.com and search for Charter Oak).
- Market Placement/Repositioning. Teacher FCU used its MCIF program to determine how building a new branch would impact the traffic at its existing branches. One of the great misconceptions about siting a branch is putting a new one where a CU already has a steady member base. Such a branch is more likely to siphon off traffic from existing branches, rather than helping to build new members in a new market.
- Mergers. This is a growth strategy that, particularly right now, carries some inherent risk. Economically-induced mergers are giving even mergers of healthy institutions a bad name.
- Membership rewards. Kilmer shared just a few of the results one credit union had from a membership rewards program. Thee $900-million CU saw 10% deposit growth, a triple jump in net new monthly checking accounts (70% of which were new), a 47% increase in interchange income for a total of $840K net new value in about year.
- Grass roots development. While this example came from a community bank, Kilmer said it was still relevant for credit unions. The $800-million community bank has 15 board members, each of whom are expected to generate three new business opportunities every month. When a board member makes such a referral, he or she is expected to accompany bank staff to the initial sales call, as well.
- Leveraging Business Intelligence. One credit union profiled its top 40% of share certificate holders then used demographics and psychographics to identify 1,000 "look-alikes" to kick off a new money campaign that ended up opening 276 accounts totaling $8.5 million.
- Service Differentiation. Credit unions continue to be leaders in member/customer service, but now is hardly the time to rest on those laurels, Kilmer suggested. Consider investing in a CRM tool to help fill in the service gaps.
