Even with all the economic turmoil over the last two years, banks are still growing loans faster than credit unions, according to Kevin Stang from Raddon, who stepped in when another speaker couldn’t make it to Seattle. Part of that may simply be that half of the nation uses one of the 5 biggest banks, which one third call their PFI. However, those same bank customers perceive free checking as being discontinued, so that presents an opportunity. Here are his recommendations:
1. Credit unions need to aggressively target checking, since greater numbers correlate to more loans and profitable products. Credit unions also need to activate those single service checking accounts — especially if there are under 20 transactions a month on any account, which means it is likely a secondary account. (Average monthly number of checking transactions is 38.)
2. On-board new households, since 75% of new members are single service. You can identify/prioritize lead products at your credit union, or consider on-boarding in the order of the product they start with: 51% come in with checking, 11.5% come in with new car loan, and 2% credit cards.
The first three months are critical. Here are his recommendations:
• Mail once/month.
• Phone Calls — make them service focused, not sales focused — at intervals of 2 days, 2 weeks, 2 months
• Make on-boarding part of your culture. Get branch managers, employees to help — how can we save you money?
3. Steal loans, ask for loans. The new frugality means that consumers are looking harder at everyone and shopping loans, so you need to train staff to look for opportunity.
4. Aggressive marketing is only one element. Strategies for strong loan growth should include loan recapture, story book lending, risk based, outbound marketing, etc. Look at credit triggers such as outbound calls based on people applying for a mortgage. But you need to have the right people calling — feed best phone person with right info, no matter their experience or background.
5. Use members to build referrals. 70% of members have recommended their CU to family or friends. Every CU needs this as a staple. People want to refer, so a $15 reward is usually enough if always visible.
Note: These posts are my takeaways from some of our fellow presenters at the MAC Conference. Great atmosphere, fun people – I highly recommend you consider attending this conference next year in Las Vegas.