INDIANAPOLIS — Don't suggest to FORUM CU that growth via SEG marketing is an outdated strategy.
That "old school" approach to expansion is responsible for more than half of the $1-billion CU's growth over the last 19 years. "We've gone from $134-million in assets and 30,000 members, to more than $1 billion in assets and 103,000 members since 1990," shared Andy Mattingly, SVP-strategy and marketing. "About 55% of those members were brought in through SEG development."
The strategy has driven down member acquisition costs."We associate marketing dollars with members who walk into the branch and sign up, and that comes to about $175 per member, based on statistics from a little over a year ago. It costs us less than $100 to bring in a member through an SEG."
Not only is the cost lower, but Mattingly contends the credit union gets a stronger member from the start. "They come to you because they understand the value of the credit union, not because of the special you are running. You don't get as many cherry-pickers. You get members you can build deeper relationships with from the outset."
Even though many of its members rely on electronic banking, Mattingly insisted that most members want to put a "face" on the credit union. Having a SEG development representative accomplishes that task, he said, and it allows FORUM to extend its reach without bricks and mortar. "We only have 12 branches, and most people are not going to do business, at least not with their primary financial, with someone they don't know."
FORUM has three SEG development reps who report to a regional sales manager, and they are measured based on how well branches meet their membership and checking goals.
"Their focus is developing business for our branches," Mattingly explained. "I think why some of the focus on SEG development has gone by the wayside within the credit union community is because credit unions have said their branches are solely responsible for these goals and they don't need SEG reps. For us, SEG reps are why branches meet their goals."
Mattingly reminded that SEG reps have to have excellent sales skills and possess the ability to sell one-on-one, and to a group.
FORUM makes sure it visits an SEG at least once a year, with a goal of meeting once a quarter. With a little over 1,000 SEGs, FORUM will "deactivate" a company if it does not permit the credit union to stop by at least once every 12 months. "That doesn't mean we forget about them," Mattingly said. "In a year we call back and see if their stance has changed."
As FORUM has grown, so have demands on its SEG team. Mattingly said the credit union now leverages the retail delivery team, occasionally asking branch managers to stop by a company if the SEG reps are tied up. FORUM also relies more on the work force within companies to spread the word about the credit union. In addition to its Refer a Member program, two years ago FORUM introduced the Unofficial Spokesperson (Credit Union Journal, Sept. 15, 2008). Spokespersons sign up through an application on FORUMcu.com, and are given 250 Unofficial Spokesperson business cards to hand out that carry a unique tracking number. Spokespersons receive $5 for every new recruit.
"We signed more than 500 members through this program in its first two years," Mattingly said. "And we have been averaging about three services per member from this group."
