WYOMISSING, Penn.-Discovery FCU has experience handling new members who simply park hot money, having run a 10% six-month CD a few years ago that still has the credit union weeding out dormant accounts today.
This time around, while deposits and a 10% growth in net new members rolled in last year as a result of a local bank's troubles and not a promotional rate, CEO Ed Williams plans to convert more of the new business to active members by sharing the credit union difference.
"We will cross sell them very hard," explained Williams, who said the $129-million CU was able to hold onto a little over 50% of the deposits from that 10% CD promotion. "Some of those new members were surprised to see the robust product offerings we have and that we offer them for a lot less money than banks."
That's the point Williams believes many new members are missing. "They do not understand what a credit union is about. This year we will develop our brand so people realize what a credit union is, and that we provide everything that a community or big bank does at a better price."
Emphasizing business services should boost retention, as well, Williams offered. "We have a lot of small business owners who have wanted to use us to clear their checks. But some want to clear about 50 to 100 checks per day, and we were not ready to do that last year. This year we will provide that service."
The 10,475-member DFCU will increase its emphasis on business loans, believing that the sweet spot left open by the banks is in the $150,000 to $250,000 range.
Williams understands the importance of focusing on retention this year, especially after his experience with the high-rate certificate. "We are proof that if you offer a 10% CD that you can get 1,800 new members and raise $19 million in a week."
