A funny thing is happening at some credit unions in their rush to move away from select employee groups (SEGs) to get those big, broad community charters-it turns out SEGs have legs after all.
The Credit Union Journal hosted its sixth annual SEG & Business Development Conference earlier this month in Orlando and we're proud to say this meeting just seems to keep getting better with age. The presenters at this year's meeting shared dozens of ideas on developing new business for credit unions, whether working to rekindle old romances with various sponsor companies, or trying to spark a flame with new groups.
For those of you who have developed conference content before (I've heard this also referred to as cold-calling and begging), then you know what an extraordinary challenge it can be to put together an agenda that's compelling for everyone. Given the diversity of credit union asset sizes and the turnover in many positions, what's an epiphany to one credit union executive is a peach pit to another. It's going there, want to do that vs. been there, done that. An added challenge with The Journal's SEG & Business Development Conference is also right there in the name: is the credit union SEG-based, or is it developing business through a community charter?
Prior to the meeting I had a discussion with one person who suggested it's time to drop the "SEG" from the name. So in moderating the conference I posed that question to attendees in my opening remarks: should we jump on the trend so many credit unions have seized and change the name? We're still sorting through the attendee evaluations, but by the end of the meeting I believe we had our answer: the name should remain the same (although in a tribute to some league board decisions, perhaps we'll compromise by changing the order of the names).
But in listening to the presenters at the conference it didn't take long for the savvy attendees to figure out what others are learning or already know-people who feel an affinity for a company are much more likely to do business with it, and losing those affinities can be costly.
A number of years back there was a parody song out entitled "I Know I Said Take This Job and Shove It, But Could You Shove It Back This Way?" For many CUs and their select employee groups, the sequel is "We Initiated The Break Up Just So We Could Make Up."
The sponsor company or select employee group model that was the underpinning of so many credit unions for so long worked so well for a reason. SEGs didn't become obsolete when Congress and state regulators permitted credit unions to expand. In fact, and here's the rub-SEGs became more valuable and prized. There's a reason some banks have rolled out services that by any other name would be called a SEG.
That's because the problem with a community charter is that it's a COMMUNITY charter. When you open up to everyone, everyone tends to be closed to you. There are banks and other credit unions and savings and loans and insurance companies and payday lenders and brokers, all with more offices and advertising and community presence than just about any single credit union. It's expensive to go community. A credit union that was big with its sponsor communities can be mighty small in a community.
Suddenly, a credit union finds itself looking for some type of affinity, some type of hook, some type of relationship-builder with prospective members. If only there were some vehicle like that, perhaps, say, some type of exclusive relationship the prospect can only get through the workplace, a type of "financial club" with special benefits and offers that makes him or her feel special, not like one of those banks where any Tom, Dick or Mary can just walk in off the street. Yep, if only there was something like a...SEG.
A couple of other notes from the conference:
* For all the talk of software and database development and integrated, strategic thinking, the job of the business development manager continues to come down to the kinds of far simpler fare that have been around since Roy Bergengren was sleeping on the couch in his office-making contacts, getting in the door of the company, building relationships that are actually friendships, even the right kind of trinket giveaway. (Indeed, there were several minutes of discussion during the conference among attendees on their experiences with various knick-knacks that seem to work best with company HR execs).
* A note to CEOs on why many strategic plans misfire. Doreen Burton of CUNA Mutual shared the story of interviewing branch managers and head tellers about what members were saying and asking for. She compiled those results and took them to senior management. The reaction: The employees don't know what they're talking about.
* Finally, our quote of the year to date comes from Tony Rizzo of Pinpoint Direct Marketing: "I've been a credit union employee, so I've been behind your desk. I've been a vendor, so I've been across your desk. I've been an auditor, so I've been through your desk. And now I'm a credit union chairman, so I hover above your desk."
Frank J. Diekmann is Editor of The Credit Union Journal.
Money is something you got to make in case you don't die. -Max Asnas
