Planning Means Understanding Product's Value, or Lack Thereof
DEERFIELD BEACH, Fla.-When it comes to strategic planning for 2012, one supplier says that understanding a vendor's product offerings is crucially important-but more important, she said, is understanding that product's value and, in some cases, lack thereof to a member.
Credit unions "have a lot of vendors coming at them from everywhere," said Sandi Torres, SVP Sales and Marketing at IWS (Intercontinental Warranty Services). While CUs naturally want to have as many options available as possible for members, "they should look at the value of products relative to what's really valuable to the member."
IWS provides auto warranty services which CUs can sell to members as part of an auto lending package, and Torres said that one difference from CU planning for 2011 is that while auto lending policies at many credit unions have begun to relax a bit since the worst of the recession, shaky jobs numbers and a stumbling economy could easily cause another tightening of lending standards.
Many CUs have reported an uptick in auto lending in recent months, but car prices continue to rise, as do fuel prices, causing greater uncertainty in the market.
"Even though it's an uptick [in lending], I've read about (used) car prices being at a premium; they're going up," said Torres. "If the economy gets better, will the demand be there so that the prices go down? To me, it's uncertain. And another thing is fuel prices. In the course of the last three months it's just been a rollercoaster."
The Delicate Balance
As a result, said Torres, with CUs looking to boost income and members simultaneously watching their wallets, it's a delicate balance.
Her advice to credit unions?
"[Y]ou have to make money, and you're looking for income, but does one thing outweigh the other? In some cases it does and in some it doesn't, but I think that's a really important question when looking at a product-and that goes for any product."