ST. LOUIS - Building a branch and putting out a "Se habla Espanol" sign isn't enough.
Instead, creating a whole membership experience that strikes a positive chord with the market you're trying to reach is the key.
Credit Union Journal asked several branching experts to look at both sides of creating that experience: inside the box (building a branch that appeals to your target market) and outside the box (reaching out to that target market)-and how to do all of that without alienating your existing members along the way, starting on page 10.
Employees With Language Skills Aren't Everything
Hiring multilingual employees is a must the experts told Credit Union Journal, but the point isn't simply to be able to communicate with the target market-it's to reflect that target market in order to gain trust.
Tom Lombardo, director of business development for ClayCo Financial, explained there's a huge difference between simply finding someone who can speak Spanish, for example, and hiring a member of the very community you are trying to woo.
The one allows for better communication, the other creates a connection to the community at large.
"An Asian American who speaks Spanish isn't the same as a local who knows the community," he advised.
This holds true, even when a particular segment can be expected to understand English.
PW Campbell COO Jim Caliendo noted how one credit union was able to start reaching out to a particular community even before the branch was built.
The credit union was putting a new branch in a part of Ohio that had a large Amish population.
"We used a number of Amish subcontractors to do the work," he related, a move that gave the Amish a vested interest in the branch and demonstrated the CU's desire to be a good corporate neighbor.
If These Walls Could Talk Would Members Get It?
Caliendo said that using color schemes that are familiar to a particular group and d?cor that reflects that group's heritage are important and can work if done well-credit unions have to walk a fine line to make sure such efforts don't end up being too "kitschy" or stereotypical.
For example, the Pacific coast has a large Asian population.
A new branch's d?cor could, and most likely should, reflect Asian tastes and colors, he offered.
But as one financial institution suggested, hanging Japanese lanterns is too much and simply out of place.
"It looks like a restaurant, not a financial institution," he said.
But at the other end of the spectrum, the traditional, intimidating design of many financial institutions, replete with tellers staring down from on high and bullet-proof glass is anything but inviting.
Caliendo and other experts said a potential member walking through the front door needs to immediately feel at home.
Get Out Of The Branch, And Into The Community
Sitting inside your perfectly designed branch, surrounded by multilingual members of the community still isn't enough-showing a genuine interest in a community means getting involved in it outside the walls of the branch.
"Community involvement in these types of arrangements is critical," Lombardo said. "A credit union has to take an active role in (the community). It can't just hang up colors and expect it to work. You have to create the trust and that comes with your people."
Lombardo and several credit union experts mentioned simple actions such as working with church and civic groups in the particular group a new branch is seeking to attract, an action that could be as simple as sponsoring Little League or softball teams.
Lombardo said many new immigrant groups come from nations where there is little, or no, faith in financial institutions.
Credit unions moving into new areas with specific groups can attend churches or synagogues, join business groups or the chamber of commerce or design a meeting room at the credit union to hold community meetings.
Hanging around a softball field shaking hands and cheering on the kids can potentially have a huge impact on what a specific group thinks of your credit union.
"They are suspicious of financial facilities to begin with. Their suspicions have to be overcome by more than marketing and hanging colors," he said. "Community banks are good at local sponsorship. Don't just do it for show."
The community involvement and local hiring will go much further than fancy marketing plans or focus groups to learn what the group wants and needs. Again, Lombardo said if the effort isn't for real, no amount of planning will make up for it.
If a walk-in customer has shaken hands with a manager at church or a softball game, sees a branch interior reflecting his or her heritage and employees speak in his native tongue to a local, the credit union has gone a long way toward building trust, and that is the first step toward building loyalty.
That loyalty is the Holy Grail of marketing because it leads to word-of-mouth advertising, which is so important when trying to reach out to a culture that is distrusts financial institutions.
One man who knows first hand is La Macchia Group President Ralph La Macchia, who spoke only Italian in the home with his parents. La Macchia said credit union staff need to take more steps with a new member who is new to the world of financial institutions, such as explaining what NCUA is and how it insures all deposits.
Striving to establish and maintain trust will have more impact than hanging pictures of the "Old Country" on every branch wall.
"I have no interest in that. I can make better lasagna at home. You want to talk to me? Talk to me at church," La Macchia insisted. "This isn't a marketing plan. What you're really putting together is an 'outreach' program. The more fundamental people are, the more assurance they need. Be genuine. If you don't get them to bring in their money from under the mattress, you don't have them."
How The Neighborhood Can Effect Product Mix
When planning a new branch, credit union staff need to examine which services a specific group actually needs and how to supply it, Caliendo said.
The large Hispanic populations in the Southwest and Florida typically need to send money home on a regular basis.
A new branch can offer wire transfer services and money orders for its new members to serve low-income workers who have never had a checking account.
The cumulative effect of community service and the proper services, not just a large array of services they don't want or need, will win the day, Caliendo said.
"A money order is not going to make money. It's a cash loser, but you might have to do it as a service regardless. Doing things like that will endear the credit union to your market."
Even within one particular group there can be a whole subset of different demographics to consider, the experts suggested.
For example, differences in education, the ability to speak English, age and how well they've been assimilated into the United States, all contribute to how they will react to a credit union's efforts to reach out to them.
A credit union performing research needs to pay attention to these details and plan accordingly.
For example, second-generation Americans may be more likely to be looking for auto loans and mortgages while recently arrived immigrants may be more in need of wire transfers, money orders and most off all, trust.
NewGround Vice President of Business Administration William Dean also mentioned the differences or "split" within any ethnic or minority group.
Dean calls immigrants who've been in America less than 10 years the "heritage group:" they often have multiple generations living at home and either keep their money or send it home to relatives.
As the children of this heritage group gets "Americanized," they are more open to financial services and will in turn teach the older generation.
"The word of mouth will carry you across. That's how you get to a lot of ethnic groups, through word of mouth," Dean said. "It shows you're at least trying to understand the culture."
Dean said when a particular group becomes more "Americanized" it will then need more advanced services such as mortgages, relocation services, educational tools and even tax planning.
Going Beyond The Box: The Human Element
Facilities experts said the human element and all of its subtlety and nuances-and avoiding potential pitfalls for stereotyping and prejudice-will carry the day for a credit union branch reaching out to any group whether based on religion, race or employment.
Level 5 strategic consultant John Hyche said the intangibles of human nature and building trust can be successfully woven into the design of a new branch that will bring in new members and also satisfy the existing membership.
Hyche cited the formerly named Delta Employees Federal Credit Union in Georgia as an example.
In recognition of Delta Airlines business struggle, Hyche said the credit union obtained a community charter to expand its membership, dropped "employees" and added "community" to the brand.
Hyche said Level 5 designers and credit union staff knew of the potential problems of losing its original identity and created a prototype branch that reflects the arch of airport buildings. New members really don't even notice the similarity, Hyche said.
"If you're from the airline you think 'airplane hangar,'" Hyche said. "It's subtle, but it strikes a chord."
While credit union branch experts said detailed planning and hiring bilingual staff will always be a necessity, community involvement, local hiring and genuine interest in the new membership is what makes a successful effort.
"All of that stuff together, creates a whole program," NewGround's Dean said.
FOR MORE DETAILS
* www.swfcu.orgwww.pwcampbell.com
* www.claycorp.com
* www.level5online.com
* www.newground.com
* www.lamacchiagroup.com
