Significant Opportunity For SEG Penetration Remains

There is a lot of potential for SEG penetration out there.

Truth is, businesses and their employees need the products and services that credit unions provide. The problem is that many of them just don't know it yet.

The credit unions' job, says Bob Hoel of the Filene Research Institute, is to tell them.

Hoel, among the list of industry experts scheduled to speak at The Credit Union Journal's fourth annual SEG/Business Development Conference in San Diego in March, will offer results from the Filene Institute's recent compilation of research that he says can enhance CU/business relationships-including community chartered CUs-and increase membership tallies.

A Well-Crafted Strategy

"We think it's important to position the credit union to the sponsoring firm as offering a no-cost benefit," Hoel said. "Well-crafted strategies can help accomplish that."

The research included mail surveys conducted by CUNA's Market Research Department based on input from the National CU Foundation, focus group sessions with CU professionals, a SEG liaison study of members and nonmembers from companies served by CUs, in-person interviews by the Center for Credit Union Innovation with senior management, and a colloquium sponsored by the Filene Institute and Center for Credit Union Research at the University of Wisconsin-Madison that focused on financial stress and workplace performance and the CU/SEG relationship.

Hoel said that he and co-presenter, Michelle Bloedom of Baxter CU in Vernon Hills, Ill., will use that information to help credit unions choose the right SEG relationships, position themselves as employer profit enhancers and build employer support of its efforts.

The first step-make contact with the SEG's key decision-makers and, step by step, list the many ways the CU can lower the SEG's cost of doing business (for example, reducing administrative expense) and help employees become financially stable, which, in turn, makes them more productive employees.

"Financially troubled employees cost employers $400 a year because of more health claims and absenteeism," Hoel said, noting that they account for about 15% of the working population.

Hoel said the 15 steps have been divided into three categories:

* Establishing the relationship by promoting its benefits to employer, employee and the community.

The research points to CUNA's research of nonmembers, which indicated that the second most prevalent reason for not joining a credit union is that employees do not know they are eligible. The No. 1 reason is that the CU location is not convenient.

A 'Can't Miss' Product

* Maintaining CU/SEG relationship by dedicating significant resources to the SEG program to help build employee awareness, recruiting employee volunteers to act as ambassadors for the CU and offering enrollment incentives.

For example, Step 11 suggests offering a "can't miss" product such as reduced fees, direct deposit, free unlimited ATM access or the installation of an ATM at the SEG location to demonstrate commitment to its members.

"Put a package together and it becomes very appealing, much more so than signing up at any other financial institution and becoming just a number," Hoel said.

* Become a visible and viable part of the community by joining local service organizations such as chambers of commerce, and sponsoring activities that build community awareness.

Step 14, "Join the Country Club," for example, stresses the value of community involvement. Many surveyed said their involvement local service clubs, community non-profit boards, and chambers has lead to excellent business contacts, referrals and other support.