Credit Union Geek Marketing, Strategy, and The Force by Joe Winn

“A Credit Union Member Walks Into A Car Dealership…” (Part 2)

This is a continuation of “Unseen Credit Union Competition“. Last time, you saw what members receive after buying a car or home. Now, we rewind to the buying process itself.

Car Dealers & Credit Unions: A Necessary Alliance

In my business, I work with a wide variety of credit unions. Small to large, urban and rural, with everything in-between. What do they all share? A relationship with local auto dealers.

The degree of this arrangement varies from:

“We send to you, you send to us.”

“The dealer holds all the cards and we do what they ask.”

Depending on whether the credit union engages in indirect lending or even cares about direct (and if you’re reading this, I bet you do) says a lot about where they fall on that scale.

Your Members Just Want a Car

Let’s be real. Your members don’t care about back-end relationships. Remember, their focus is on the car. A low loan rate, convenience in application, and speed of closing are what they want.

Why? Because that means car shopping can end faster and car driving can start sooner.

Take a quick poll of your office or members in the lobby right now. Ask them who loves the car buying process. Did any respond like this?

“Yes, we get to do it again! I can’t wait!”

It’s exciting to get a new car. Buying one, though? Not what most would call “fun”. As their credit union, you can help members save time, money, and potential future frustration.

Dealers Sell

The first part of this series, Unseen Credit Union Competition, looked at the slimy tactics of aftermarket firms aiming to sell your members (and anyone who buys a car or home) questionable protection products.

It’s important you make members aware of these efforts. Not only is it the right thing to do, but if something goes wrong, where do you think they’ll go to complain?

Shopping Cart — *My car’s dealership had a little shopping cart on the F&I desk.*

Auto dealers don’t get involved in this stuff. They simply present their product offerings at time of purchase. Of course, some of this overlaps with your own lineup. But theirs is obviously better, since it’s connected to the manufacturer…or something.

What? It’s not? Oh, and it’s often the same thing you offer, just more expensive?

Given that knowledge, I’m sure your team makes a point to explain this to every member, right?

Of course, maintaining a strong relationship with your local dealers is important. Frustrate them and they’ll stop accepting your drafts, inconvenience your members, and not send indirect loans your way.

Some might even complain to customers about your apparent unwillingness to pay them! (I’ve heard this happen more than once)

You’re in this together; surely, this town is big enough for the both of us!

Equip Members With Great Info

Your mission is to serve your members. And that means arming them with helpful information before they walk in to the dealership. What does that look like?

Lay out what you can offer a member buying a car. Here are some common possibilities:

Loan (duh)
Simplified search and shopping process (By referring to your car buying service)
Preferred and/or upfront pricing (Through a dealer group arrangement or car buying service)
Rate discount (Combination of services, auto-pay, promotion with partner platform, etc.)
Fast and accessible-anywhere application, approval, and funding process
GAP
VSC
Depreciation Protection Coverage
Debt Cancellation Insurance
Credit Life/Disability Insurance

Anything else? Yes, this is me asking you. Because who knows your credit union best? Hint, it’s not me.

Now we have a detailed list of everything your credit union can provide a member looking for a car. This is your “value proposition”. Look back again. These are the reasons why you are in the auto lending market.

Do each of those items feel like the best possible options for your members? If not, it’s time to re-evaluate. (Disclosure: My company’s Learning Library is full of unbiased info to help!)

Here’s a tasty thought exercise: Assuming both are equally accessible in every way, would you eat at the best pizza place in town, or the 2nd best?

To ensure continued survival and growth, you have to be the best choice for members.

For brevity and with respect for your time, I’m splitting this post into two parts. What did we learn today?

Credit unions and car dealers must work together for the benefit of members
Your members don’t care about what happens in the background. They want a car. Easily.
Dealers offer a lot of the same products as your credit union for a lot more money. Ensuring your members know you can help at a lower cost (assuming the programs are otherwise equal) is essential for your growth.
There’s a Learning Library with a lot of helpful resources for your due diligence (shameless plug!)

Your Credit Union Members Want Simple

May 28, 2019 / Joe Winn / 0 Comments

I Love Choices

I’m the kind of person who rotates between five brands of orange juice (I live in Florida and this is a perfectly normal thing here).

As a tech geek, I also dive into Settings menus on all products to see what I can personalize, edit, or tweak.

Even Choice-Aholics Want A Clear Decision

But even for me, a choice-aholic, there are things I’d rather be decided ahead of time. If I plug it into the wall, I want it to be UL listed. Don’t give me the choice of 6 highly similar products with varying degrees of regulatory approval, safety certifications, or otherwise.

Offer one. One “just right” option.

Variety comes in actual aspects of the product or service. Let the provider whittle down the “backend” complexity. That’s why I’d buy from them, because they did the work so I don’t need to.

Which brings us to you. The smarter choice, the only decision your member should have to make.

Oh Boy! A New Member!

Wonderful, you’ve welcomed a new member to your credit union family. Let’s help them get set up with a checking and savings account, talk about refinancing loans, and perhaps see if a credit card makes sense (use that credit pull to position the conversation around rewards, interest rate, or balance transfer).

Shouldn’t be too hard. That’s only 4 things, and, more than likely, 3 are pertinent to the member. So let’s get that checking account opened first, because it can help make you their PFI. You have more than one? Ok, no problem, we’ll help them decide.

So, should they go with Advantage Checking, Premium Checking, VIP Checking, Rewards Checking, Rewards Plus Checking, Free Checking, Senior Checking, Youth Checking, or…wait, there’s more?

Just like those famous droids, “these aren’t the choices you’re looking for.”

It’s checking. Not choosing your preferred model of F-150 (if you aren’t aware, there’s oodles of options). You only need one. Maybe two. That’s it. If your board insists upon the old and boring free checking, keep it.

Providing Immense Value

You’re about value. So make your checking be something your members smile about having (and even paying for…yeah, seriously). Add a clear monthly fee Premium Checking with more benefits than your members can believe.

Since you’re getting a small monthly fee, offer everything:

Dividends (though low, offer higher rates up to a certain dollar amount at very low cost and high perceived value)
Rewards on debit transactions
All your standard services
Plus, value-adds like ID theft monitoring, mobile phone insurance, and more
Budget-conscious members, whether young, rebuilding credit, or some other life journey, always have the option of your free checking.

Basic and free or Premium and small fee. Simple.

When’s Too Many Too Many?

That’s a lot of doors. I mean choices. Maybe I’ll just wait here.

Some credit unions have 5 or more checking accounts. That’s. Too. Many. And then you can become eligible for other benefits through achieving a series of Reward Levels. These are based on the depth of a member’s relationship.

Maybe it means lower loan rates or higher dividends. Sometimes it adds ATM fee reimbursement, or other value-adds. I’ve written about this before.

Once we’ve made it through checking, maybe the conversation migrates to an auto loan. How many LOS platforms do you have? Exactly. One. Because more would be unmanageably complicated.

Yet, how many “car resources” do you offer? Find one which offers the best overall experience for your members, and you’re done.

It’s A Trust Thing

Your members joined (and continue to bank with you) because they trust you with their money. That’s saying something. Believe me, if you explain that the credit union has determined “so-and-so” is your preferred option for members, they won’t question it.

They trust you’ve done the work to select only the best solutions. They could search Google. And, most likely, they already did. Then, they asked you.

Your member just wants a place to easily manage their finances! Keep it simple. Then you can focus on improving your members’ lives. Which should be your driving force in every decision.

Disclosure: My company partners with a firm which offers a comprehensive checking solution. It’s in hundreds of CUs and is loved by staff and members. My company also offers a Car Buying platform for CUs. Knowing when members are in the market saves everyone time and money.

Shifting Baselines & Your Credit Union

May 7, 2019 / Joe Winn / 0 Comments

Originally published on CUInsight.com.

Ever visit someplace from childhood and think, “wow, I remember it being bigger”? Go back a few times or ask your kids (who are there for the first time) and all seems normal. You’ve just experienced Shifting Baselines.

It’s All In Perceptions

Think of it as a change in the perception of normal. I’m not talking about how your impeccable teenage styles seem ridiculous now. Let’s be honest, flower headbands will always be cool (as will bow ties). This is about one person’s standard becoming another’s outlier.

You may not be familiar with the term, and that’s ok. I’ve only seen it used when discussing environmental change. Even then, only in the oceans; fish size, abundance, and all.

But you’re in luck! I happen to have a background in ocean policy and marine science. It’ll come back around to credit unions, I promise.

The Salty Dog & New Fisherman

Let’s paint a scenario so everyone can grasp Shifting Baselines. We have two fishermen: one, an old salty dog, another freshly joining the industry. The former sings shanties of days gone by, the latter just waits for their first day on the water. Here’s where the trouble begins:

Our salty dog (lifelong fisherman) considers a “big fish” 150 lbs. and a “good” catch 1,000 lbs.
The newbie (no prior experience in area) is excited to reel in a “big fish” weighing 50 lbs. and sails home with a “good” catch netting (forgive the pun) 400 lbs.

Do you see the issue? What is great for one is ruin for the other. However, the new fisherman has no memory of the “better days” and instead considers their first day the norm. When our salty dog leaves the industry, their standard and memory goes with them.

Things Got Worse. No One Noticed.

Moving forward, smaller fish and fewer of them is expected (without ever realizing the loss). Yet we know the past really was brighter. In fact, who’s to say our old fisherman wasn’t reminiscing over already diminished catches? Maybe their elders sang of even larger fish!

Shifting Baselines In Your Credit Union

Are you suffering from Shifting Baselines in your credit union? Take the opportunity to speak with your longest-serving staff, board members, and even members. Get their take on how the institution has evolved. Are the new normals for the better?

Within the marine realm, Shifting Baselines almost always represent a loss. Does your credit union share the trend, or has the baseline improved?

If I walked in to your branch, my standard would begin at that moment. If compared to a member from 50 years ago, would I be pleasantly surprised or disappointed?

Do you have stories from your credit union’s “old salts”? Share them here or with me on Twitter at @JoeCUGeek.

For more information on how Shifting Baselines applies to our oceans, visit Smithsonian Ocean Portal.

Image credit: Me