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« No Chip, No Service | Main | Become an Exceptional Consumer Lending Credit Union »

With-Share-of-Wallet Strategies, “God is in the details”

By Steve Williams

The most important strategic priority for credit union executives today is to mobilize their entire organization around a disciplined, pragmatic strategy to make buzzwords such as “engagement,” “PFI” and “share of wallet” real. Even consumers who like to unbundle their financial purchases would be hard-pressed to find better checking, credit card, auto loan and mortgage products than those offered by credit unions. When special pricing and rewards are added for those who use multiple core products, the value proposition against even national competitors can be compelling. Yet, year after year, credit unions slice through member data to find that the penetration rates of many products within the member base are moving glacially. What’s missing?

Credit unions have good intentions and fairly high-level strategies to build deeper, more valued member relationships, but real momentum is often not achieved because a multitude of small but important details quietly undermine the right member encounters and behavior from unfolding. Like the fanatic product designer Steve Jobs, credit union executives should care deeply about the “little” details, such as the ease of opening an account, the product offers and advice given during a mortgage closing and the marketing message presented when each unique member logs into online banking. Leaders should scrutinize their branding and marketing materials and ask themselves, “Are these pieces clearly and succinctly giving members a compelling reason to have a relationship with my organization?”

Finally, credit unions need to think hard about their organizational behaviors and habits around relationship building. Are the right recruiting, training, incentive and performance management strategies in place to move the dial substantially? Leading credit unions may be non-profit in structure, but they are also high-performance in attitude. These leading credit unions are not afraid of rewarding and retaining employees who perform much better than average with higher-than-average compensation.

The business case for a relationship strategy is simple. Credit unions have already invested capital and operating expenses into acquiring a membership base. The ability to generate meaningful, incremental new revenue with a modest investment in marketing, training, tools and incentives is a significant point of strategic leverage for your organization. In projects my firm has managed, we have calculated a 20% increase in revenue per member can often double the profits of a credit union—this money can be invested in benefits, convenience and financial strength on behalf of the membership.

The competitive environment is ripe for deeper relationship revenue, but those pesky details that make successful execution possible aren’t going away. It’s time for executives to dig below basic commands from on high and help inspire an organizational focus on the details that make all the difference.

Steve Williams is a principal with Cornerstone Advisors, Inc.

Learn more about what Cornerstone Advisors can do for you. Visit today.

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