MADISON, Wis.-With two new studies examining fees and what consumers are willing to pay for, credit unions are being urged to proceed by thinking of the member before the balance sheet (Credit Union Journal, June 3).
Theran Colwell, director of strategy and business development for CUNA Mutual Group, which co-sponsored one of the new studies, emphasized that the key in adding fees is to do so in a "member-centric" fashion, not at the whim of the financial institution.
"Credit unions have to look for new revenue sources today, but they have to be careful in how they do it," said Colwell. "There is a lot of interest in credit unions due to Bank Transfer Day and all the bank fees. Credit unions need to approach this business opportunity carefully to not only keep loyal members but continue to draw in one ones."
Dan Geller of Market Rates Insight, which released the other study on fees, said his company's research shows that consumers prefer to pay for bundled services over individual services, and that they are willing to pay $8 to $12 a month for recurring monthly FI charges. "The study shows quite a few service bundles consumers are willing to pay for," said Geller. "Generally, bundles that include ID theft, prepaid cards, and overdraft protection were perceived most valuable by consumers and produced optimal revenue."
Don't Go With Your 'Gut'
Ben Rogers of the Filene Research Institute, which co-sponsored the study with CUNA Mutual, emphasized that when adding any new fee that the CU cannot go with its "gut" in assessing how the charge will impact the membership, and must measure results. "Measure how much growth you get in the account (that has the new fee). If members see value in the account, and your front-line team sells it correctly, you will see net growth. If you don't see growth, then you have to ask yourself if you are just charging a fee and not providing value. If you are just charging a fee for your own interest and not adding value, that is a tough place to be for a credit union."
