ORLANDO, Fla. - There is no "magic pill" when it comes to building that elusive sales culture, but for many credit unions there are a couple of bitter pilles to swallow - they are not organized correctly to make loans, and the people they have in place to sell loans don't have what it takes to do so.
That's the frank assessment of Brett Christensen, who advised CUs seeking to build their loan portfolio must must remove internal barriers to sales, and get employees working in new accounts and loans who like to sell.
"One reason credit unions have not embraced sales is they've not gotten real in compensation," said Christensen, sharing as an example of one CU that has gotten real - to the tune of one loan interviewer who made $108,000. "If you want sales people, you might have to buck up and get them. These people are persuasive and consistent and exude energy. You can teach people how to make loans; you can't teach them personality or to like another human being."
On the flip side, he added, "If you want a recipe for disaster, offer underwriters variable pay."
"In a centralized environment, you need a good cop/bad cop model. An interviewer on a variable incentive plan has never, ever seen a loan he or she doesn't like. The bad cop is the underwriter who is not on an incentive. They need to make sure it's a good loan."
Many CUs, especially when they crest $100 million in assets, adopt the "one-stop shop" approach and fail without realizing it, he said. "Sales is more than just lending for me," said Christensen. "It's also new accounts and new deposits. That's day one. From day two to affinity it's service."
The One-Stop Shop Problem
The problem with one-stop shops, he said, is that it's "overwhelming what these people are expected to know and learn. One-third are new. Good luck. It's very hard to get one employee good at everything. Then they don't hit their sales goals and they are frustrated and you are frustrated and they leave, and that can be a shame. If you want a sales and service culture, then where are your sales and service positions? Or is it just lip service?"
Christensen advocates a management structure in which there is a VP for Support (all the functions that don't change, such as HR, Accounting, IT and Marketing), a VP for Sales (to whom all the "sales psychos" report, along with centralized underwriting, collections, real estate and outbound calls), and a VP Service, who oversees branches, tellers, MSRs and other service support.
"It's hard to find good, cheap help, even though for many of you that's the credit union creed," he said. "What you want is fewer, more competent, more highly paid employees."
He urged credit unions to recognize that not everyone is motivated by incentive pay.
To reiterate, Christensen said the keys to reducing staff are:
1. Centralized underwriting
2. Centralized processing and closing (Red Rocks FCU is now closing 50% of loans without ever getting a signature)
3. Separating sales from service
4. 100% of loans and new accounts by phone. "This is where I lose most people," said Christensen. "We went to this 13 years ago at Clark County. I stole this idea from USAA, and they are always rated No. 1 for service. For 75 years they are 100% by phone and now by Internet. If your definition of service is taking and processing an application in branch, I will highly, highly disagree with you."
