What Began In A Toolbox Remains Useful Tool
MASSENA, N.Y.-The same, simple business philosophy in place 38-years ago, when 10 GM workers each threw $5 into a toolbox to form what would eventually become SeaComm FCU, is behind SFCU's outstanding performance today.
SeaComm is ranked by Raddon Financial Group in the 91st percentile (2009) among its peer group in both household profit and cross selling. Membership growth has averaged 15% over the past five years. Through Nov. 10, 2010, ROA stood at 1.18% after stabilization and special assessments, with its operating expense ratio at 1.91%, and capital above 9% without realized gains.
CEO Scott Wilson said the results have much to do with "never forgetting your roots and taking care of people. You have to earn a profit, but ultimately running a successful credit union is about taking care of family, friends, and neighbors."
Taking good care of members requires a credit union to really hone in on members' needs, reminded Wilson, noting a change the $398-million CU made in 2007 has allowed it to do an even better job of that. That's when SeaComm FCU moved to a sales and service environment.
"We recognized it was vital for us to maximize household profitability," Wilson said. "Specifically, we enhanced our sales abilities, no longer being order-takers, but offering each member an opportunity to improve their own financial lives by putting the right products into their hands."
The credit union instituted extensive employee training programs around product knowledge and member relations. SFCU also combined the member service representative position with loan officers to create financial services reps. Wilson explained that not only allows the credit union to provide better service, but begin adding products to members' relationships right when they join.
Employees become acquainted with the sales and service culture as soon as they interview with the credit union, Wilson said.
"Then training makes sure each employee understands the goals and objectives of the organization. We have weekly coaching sessions, and onsite training offered by our full-time sales and service team. I even get involved, including a CEO Breakfast, where I talk extensively with staff about the organization and our goals, and how we attain them."
The sales and service training department sends staff online product knowledge tests regularly. "The more employees know and understand, the easier it is for them to explain and offer products to members," Wilson said. Staff effectiveness is measured through member satisfaction and internal service surveys.
Wilson acknowledged the CU's results stem, too, from effective margin and balance sheet management, with a strong emphasis on expense control. "We are constantly looking for ways to diversify. The more diversified your income stream, the more likely you can offset any adverse economic conditions that may come your way." SFCU is ranked by Raddon in the 99th percentile for loan margin among its peer group.
"It comes down to the fact you should never give away something that you feel there is value in," Wilson said. "If members feel valued they are willing to pay for it. Certainly price point is important, and we are competitive in our market. But you don't have to offer a 2.99% car deal for 36 months because someone down the street is. That does not work for us. We believe you get just as much business by always striving to make sure members get the products and services they need, and feel satisfied when they walk out of the credit union-much like it was in the early days of our credit union."