Credit unions always do what is right, but they struggle with storytelling.
That was the message from Kirk Drake, president and CEO of Ongoing Operations and author of “Credit Union 2.0, A Guide for Credit Unions Competing in the Digital Age.” Speaking during the recent CU Leadership Convention in Las Vegas, Drake told the audience 40 percent of credit union members close new accounts in the first 100 days.
“Credit unions only have 8 percent of the market. The biggest crisis since the Great Depression only increased market share by 1 percent,” he lamented. “We have to do something different.”
According to Drake, emphasizing service is not an answer, because “everyone knows we have better service. Trust? No, everyone trusts us. Better rates? No, everyone knows we have better rates.”
Instead, Drake suggested not just raising member expectations, but beating them. He pointed to business darlings Amazon, Netflix, Best Buy, Uber and
Tips to stand out
DREAM is the acronym Drake used to encapsulate his ideas, standing for: Differentiate, Repeat and Reinforce, Exciting, Automation and Motivation.
“Credit unions need to Differentiate,” he advised. “Motivate by looking like a credit union, not a bank. We need data to figure out what a member is going to do before they do it. A member does not want a car loan, he/she wants a car, and will do a search for a car long before looking for a loan. Use digital analytics to find those people.”
Repeat and reinforce: Drake said CUs need to create a unique and personalized member experience so members will talk about the credit union. “If you have a branch that performs better than other branches, there probably is a reason. Use Facebook for much more than product promotions – post pictures, have contests. Get members engaged.”
Create an Exciting and educating experience, he continued. How to stop new members from closing accounts? Take steps to make them feel welcome. He offered the example of Allegiance CU in Oklahoma City, which sends every new member a 30-second video greeting from CEO Amy Downs. “People have watched these videos up to 100 times – they have an impact,” Drake said. “Offer a video on how to avoid overdraft fees. Members want to be knowledgeable. Credit unions don’t want members to buy something they don’t need, but they want the members to get a credit union loan for something they do need.”
Automate the credit union, and do so with the mindset of doing what makes everything easier for the members, he said. “Use automation across every delivery channel.”
Motivation – how to look like a credit union, not a bank? Drake noted the cooperative REI gives a dividend based on purchases to encourage people to buy more sporting goods products. “Credit unions give dividends, banks do not. Credit unions offer workshops and training.”
