Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Different Credit Unions For Different Members

“Our members are different” might actually be true.

However, it’s for different reasons than cited. Most people react similarly to good marketing and smooth user interface design. They may not recognize why, but there’s a reason Google looks nearly the same as it did a decade ago.

However, individual credit unions may have a focus which makes them a better choice (pun intended) for certain members. While one member may be looking for the lowest credit card interest rates, another wants the highest rewards. During a recent visit to a number of clients in the Philadelphia area, I encountered this variance. While we were talking about goals and strategy, one credit union waved off anything below “C” paper for auto lending. Though they would work with members on individual exceptions (mainly to “look beyond the number”), it wasn’t their focus. The next day, I visited a credit union who went well into the low 500s for auto loans. “Our D paper is most other CU’s F- paper!” they exclaimed. The risk management was designed to accommodate these loans and they reaped the benefits of higher interest rates. This credit union felt that it was important to serve members who would otherwise be stuck in “Buy Here, Pay Here” financing.

What type of credit union are you? Is adopting a public face with impressive main office architecture, driving CU-branded cars around town, and sponsoring events your “thing”? Or, do you operate with a more low-key approach, relying on your existing members to spread the word and passing on those marketing dollars in the form of lower rates or greater dividends?

I’ve been to a lot of credit unions in the past few months. From a roadside office to a mountain compound to a 1700s governor’s mansion, the variety is incredible. I’d wager the variety of members served was equally so.

Is there a “correct” balance? Yes, one which allows your credit union to serve your current and target members to their highest satisfaction. This may mean offering numerous options for every service (though the Paradox of Choice normally precludes it…for much more on the concept, continue here or my post), focusing on rewards programs (make it a game!), or presenting “credit building” solutions. It’s all about your members. And you’ll get it wrong. So you tweak your strategy, ask your membership (remember the note cards?), and get better in the future.

Isn’t that, in and of itself, a way of being different?

Image credit: https://sorryabouthatbud.files.wordpress.com/2012/09/mm-edited.jpg

ApplePay & Your Credit Union

Yesterday, Apple hosted their annual Worldwide Developer’s Conference Keynote. Of their big public events, this is my favorite, as it discusses the technologies they’re pursuing, rather than simply the newest iPhone. And are they pursuing.

There are great sites to read up on the highlights (ArsTechnica is my favorite). From iOS 11 to macOS High Sierra (yes, they actually called it that) to innovations with augmented and virtual reality platforms, they’ve showed their hand for the next year.

But there was something else featured which should concern you more than their upcoming in-home speaker: Payments. After years of requests, Apple has added peer-to-peer payments to ApplePay. Specially, within Messages. Come the release of iOS 11 in the fall, you’ll be able to send or receive money while in a message conversation with anyone. It will use your credit and debit cards linked to your ApplePay account. Of course, these are yours, right? Remember how important it is to get your cards top of wallet, both in the back pocket and digitally!

This new world of direct payments can be an enormous opportunity for your credit union. Think of all the times people share small cash payments. A few dollars for lunch, a bit more for gas, or any number of possibilities. Position your digital card properly and your members can be earning rewards for those, as well as reaping you interchange income (Note: This is an assumption, as the platform has yet to launch.). Regardless of how much you make when members use your card, being the one they use is essential.

Of course, there is also a threat. What if a person doesn’t have (or want to use) a debit/credit card? Well, there will now be an Apple Cash account. That’s right, ladies and gentlemen, Apple just developed an easy way to serve the unbanked! Careful, or it could start to steal your members as well. My suggestion? Work with it. Suggest it for members who have financial challenges, aka, credit issues or even youth. Then, when they’re able to qualify, offer them an ApplePay-compatible debit or credit card. Convenient for your member, profitable (and sticky) for you.

Technology can seem scary for embedded industries. Instead of ignoring it (remember how Siri can now handle bill payments?) and hoping doom doesn’t befall your world, brainstorm how you can lead alongside.

It’s always about best serving your members.

Image credit: https://philoforchange.files.wordpress.com/2013/07/mon1.jpg

Even More Bad Advice – Part 2

Originally published on CUInsight.com

If you thought the last post was awful, this one is worse. We’re back to giving bad advice. This time, we’re talking choices, external link warnings, and, because it’s my top pet-peeve, passwords again!

More Options Is Always Better

“Enjoy checking…with choice! Find the account which matches your needs from our 5 different plans. They’re basically all the same, besides a 0.01% dividend. But who cares…options are essential!”

I get the concept: By creating a solution for every possible need, you can appeal to any potential member. Thus, your membership potential isn’t any one category, it’s humans (and sometimes even that is stretched…why can’t your dog share in savings?). Now that I’m thinking about it, a savings account for your pets is pretty cool. You could put away for their essentials, vet bills, unexpected challenges, and more. It’s like a savings goal, but separated in a fun way. Ok, that one is excluded.

Where was I? Oh, yes, choices. My business works primarily with the auto lending side of credit unions. In it, there is one main goal: Encourage the member to get pre-approved. However, people look for a car before a loan (unless they have no clue what they can afford/finance). As a result, many credit unions set up car-buying resources. They include calculators, lengthy PDF guides, and external company links. In many cases, they’re not even affiliated with those outside links! (Keep this in mind, it comes up later) What are you doing? Keep it simple! One link to do the fun “build/find a car” with a partner program (Disclosure: My company offers exactly this) and another to get pre-approved. Those outside company links? They often have their own financing programs. Bye bye loan (or ever knowing that member is looking to buy a car).

You may have heard of the “Paradox of Choice”. Give someone too many options and they’ll never make any decision. In fact, new research shows that this isn’t 100% true (science doubts itself always, boys and girls). What they found was that better options are better. More options for the sake of options makes people do one of two things: 1) Never decide and do nothing or 2) Decide based on meaningless factors (possibly because the important ones are hard to understand or not immediately obvious). If you must offer options, make sure they are equally good and clearly different.

External Link Warnings Keep Members Safe

A vestige of the World Wide Web’s “dark ages”, these are pop-up messages telling the browser that they are now leaving so-and-so’s website, and they cannot guarantee their safety, security, or that delivery will be in 30 minutes or less. You don’t need them. Many credit union legal teams claim they are mandated, but the only reference I’ve ever uncovered is a non-binding NCUA guidance from 2003. That’s Pi, or pre-iPhone. Weather widgets, local news scrollers, and other useless distractions were commonplace on most websites. Sure, if someone was clicking from their online banking to see what the latest news is in Anytown, USA, yeah, I’d want to ensure it was clear that site isn’t us.

You’ve learned a lot since then.

And if you’re that worried about where you are sending members, why send them there? (Remember the post Trusted Partners!) I’ve seen external link warnings on links to NCUA, loan applications, and more. You have legally-binding agreements with these partners or providers! It gives me the feeling these credit unions just said, “The world is a scary place. Let’s terrify our members, too. Oh, and make sure they never use our products.”

Alright, your legal team insists the warnings are necessary. Can’t argue. Just make them friendlier! Instead of a long text field in legalese, create a bright-colored, concise text notice. “Hey, just so you know, this link goes to someone we work with. They’re great, but we have to let you know they might have different policies on privacy than us. Click here to continue or just wait 5 seconds and we’ll get you on your way!”  Here’s an example from a client (name redacted). It’s still a bit long for my taste, but isn’t scary if you read it:

Simple, friendly, and still accurate. Always remember your mission. You’re people serving people. The second you adopt the terminology people associate with “big banks”, you’re no different.

So, instead of slapping warnings on every link, be diligent in working with people and companies who truly share your mission. Then you don’t need to warn anyone about anything. And, if it’s essential, be nice about it.

Passwords With Symbols Are Most Secure

We covered this in passing last time. But since the focus was on changing passwords, I want to cover this independently. Your password doesn’t need to go to the gym. And no, your password doesn’t even lift, bro.

Password strength is determined by how hard it is for a computer to figure it out, strictly by guessing. And you know the easiest way to make it really hard? Length. Not symbols. Not using aLterNatinG cases. Not replacing 13tt3rs with numbers. Sheer length. Here’s that amazing xkcd comic to explain why, once again.

If my password was “GoshIneverrememberpasswordsnomatterwhattheyare”, I can guarantee you, no computer in existence today will ever crack it. Yet you’ve already memorized it.

Many recent password leaks have had passwords figured out because the security they used was garbage. I can’t help you there. Insist their system gets an outside security audit regularly, and, if they’re responsive, ask if they’re using salted password hashes. If they aren’t, don’t give them your information.

With good security and strong passwords (ie. long ones), you can enjoy the convenience of online services with little worry of your information being compromised.

I never want to see those, “Your password must include 6 symbols, 2 emoji, 3 different cases, and one name of your favorite pet” prompts again!

And that’s just a bit more bad advice.

Image credit: ArsTechnica, http://cdn.arstechnica.net/wp-content/uploads/2013/05/correcthorsebatterystaple.jpg

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