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Food: Your Credit Union’s Newest Product?

Originally published on CUInsight

Digital transformation. Post-COVID planning. Loan growth strategies. Generational marketing.

Those are all important topics. You’ve got plenty of resources for each.

But this article? It’s going to talk about something I guarantee is 100% new to you.

In fact, consider this the first time it has EVER been discussed within the credit union world.

Food. Yes, food. And your credit union. Along with members and your larger community. If this sounds crazy, you’re right. It’s also a peek into what could become a $1 Trillion industry. That’s a T, for trillion, in case it didn’t register the first time through.

It’s ok, you’re wondering where this is going, and how it could possibly connect to your credit union. I promise I’ll get there. First, let me introduce this concept, which, by the way, your Gen Z and Millennial relatives already use (whether they realize it or not).

The Delivery Shift

Pizza Boxes
Not just pizza.

You know the basics of a restaurant, even if you haven’t been inside one in a while. There’s a building with seating areas, perhaps a bar, and a kitchen in “the back”. When you order from a waiter or that Ziosk device on your table, a ticket goes into the kitchen to prepare your food.

A short time later, you’ve got a piping-hot meal, fresh from no more than 50 feet away. It’s just as delicious as you remember, which is why you came back to this particular restaurant. The food is consistent and you trust their brand to deliver, even if you visit another location.

Of course, once the pandemic struck, we turned to take out and delivery. The food delivery segment surged 164% in 2020. Like other things, COVID accelerated transformation. Yet it was already on this track. Delivery has grown 300% faster than dine in over the past 5 years.

And most people hungry at home just opened up Yelp to call their favorite restaurant, right? Nope, they downloaded:

  • GrubHub (which acquired Seamless and Eat24)
  • Uber Eats
  • Postmates (which Uber acquired)
  • DoorDash (which had a huge 2020 IPO)
  • Drizly (for alcohol, another service Uber acquired)

If you’ve been on these apps before, you know how simple they make getting food to your front door. They’re also surprisingly good at making “what you want” as important as “where it’s from”. When you’ve got a burrito craving, it makes sense to filter by fillings rather than source.

Ordering food for most now means opening a delivery app and not a specific restaurant’s site. If this concept sounds silly to you, rest assured, you’re currently not their target audience. But you might be after finishing this article.

Because that list of nearby restaurants and food items showing in Uber Eats has a secret: Some of those restaurants don’t exist.

Ghost Kitchens

Cooks in Kitchen
Look at those apparitions cook away.

No, this isn’t some Halloween Horror Nights event. A ghost kitchen is simply “a cooking facility that produces food only for delivery with no dine-in or customer facing areas.” You may recall commissary kitchens, where you can “set up shop” in a fully-prepped cooking space.

Ghost kitchens are similar, except they can also be part of another, already operating, restaurant. Say you own a taco stand and want to bring in a bit more revenue. You could consider preparing pizzas under a different, delivery-only, brand.

Many places are doing this now, especially as dine-in activity collapsed throughout 2020.

However, this isn’t a new concept. There are currently 1,500 ghost kitchens in America. Globally, it’s caught on to a larger degree, with over 7,500 in China and 3,500 in India. As mentioned earlier, projections put it at a $1 trillion industry in less than a decade.

How do you promote a menu which has no physical location to visit? Even food trucks stop to sell their goods! Delivery apps. When scrolling on your phone, it doesn’t matter if the “restaurant” has a location, just that they can deliver your wet burrito in 32 minutes.

Ok, so we recognize the enormous growth in food delivery apps, the expansion of ghost kitchens, and how seamlessly they fit together. Where, you are probably thinking, is the credit union connection?

Enjoy your side of guac and chips as we prepare the main course.

Ghost Franchises

Girl on Phone with Coffee
She’s definitely using a delivery app.

Here’s where it gets interesting.

Say you’re a YouTube celebrity with millions of followers (this is absolutely a thing), and you want to promote a new way to monetize your audience. Product placement and paid promotions are fine, but they’re old-school. You want something fun. Something tasty.

What if you could open a national restaurant chain with items fully to your branding, and you’d earn a piece of every food sale? Oh, and you wanted to do it with minimal investment. Sounds crazy, right?

Not anymore. Today, you’d work with a ghost kitchen consultant to set up a ghost franchise. Together, you come up with the restaurant name, its food items, and on-brand descriptions and graphics. Then, you food test and create standardized recipes. Finally, distribution.

Your consultant helps recruit a regional or national network (depending on your goals) of restaurants and ghost kitchens willing to make your food. These are often large chains, so one agreement can bring in hundreds of locations. And, there is no step 3.

You’re A (Delivery) Restaurateur

Uber Eats Bike Delivery Man
Fresh from…where again?

In that entire footprint, your “restaurant chain” goes live in delivery apps. Overnight, your fans can order your burger in 95% of metro areas, sharing their response videos about it the next day. And everyone using their existing apps sees a “new restaurant” in their area.

This isn’t a hypothetical. MrBeast, a YouTube star with over 50 million followers, opened MrBeast Burger in just this fashion. He’s not alone. Celebrities as wide-ranging as existing restaurant owners to reality stars follow this model.

Guy Fieri has 130 regions where you can take the virtual drive to Flavortown Kitchen. Mariah Carey (yes, that one) has a whole line of cookies available in 39 states. For the Jersey Shore fans, you can chew on Pauly D’s Italian Subs.

With a bit of planning, anyone can launch a food brand. And, since it’s fully virtual, you can evolve it as needed. So what if you wanted to do more than just fill stomachs? Is it possible for this model to improve communities?

The Credit Union Food Connection

Breakfast on Table
Breakfast from your favorite credit union!

Bank, borrow…bite? Eating isn’t often associated with your financial institution. Unless it’s a lunch-and-learn session or department pizza party (remember those?), business revolves around dollars and members, not dining.

The community and member-facing side of your credit union exudes financial empowerment. You aim to lift people up through your products and services, and don’t need me to explain that aspect of your mission. But what’s a major challenge? Communicating this effort to the public.

What if your credit union started a restaurant? Backed by ghost kitchens, you could build a brand that connects back to your own, raising awareness and excitement for your initiative.

Sidenote: Yes, there are possible challenges related to operating a “business” as a credit union. In my mind, this would necessitate setting up a CUSO to handle it. You’d start as fully non-profit, where all revenues go to your charity partners. Eventually, it could support the CUSO, which can handle multiple CUs.

The menu items could have names relating to savings or financial goals. Descriptions could include witty connections to local charities and member success stories. If this sounds unfeasible, you haven’t let your marketing team run wild.

An Order of Community Improvement with a Side of Financial Education

Menu Clipboard with Food
What’s your daily special?

By using the ghost franchise model, you could open an app-visible restaurant chain across your entire member footprint. Besides traffic from regular users of delivery apps, you would promote it through your social media and website (especially mobile banking…engage them on the same device!).

Sure beats another message about how your rates are the lowest in town. Or that a HELOC with your credit union is a great decision. I guarantee your members are not expecting to hear about daily specials…of food! Start your order now!

With items advancing financial literacy and the whole model promoting your brand, what else could you do for the community? Remember the references to local charities (or your foundation efforts)? They can be more than just mentions. Think real giving.

Your model can accommodate a portion of sales to support these charities. Share quarterly updates with members about how their eating habits made a real difference. Tell them how many backpacks you got for underprivileged kids, or how many meals they helped you serve at a local food bank.

Most importantly, ensure your members feel part of the effort. Thank them for supporting the community with every order. Tell them exactly what their order provided for a partnered charity.

Remember all those discussions about how Millennials and Gen Z like (and tell friends about) companies who are genuine in their mission? Show them on their turf.

Food: The Next Credit Union Frontier?

Cake Pops
“You see, the sprinkles are like interest…”

Every day, you read articles warning that without innovation, your credit union will struggle to succeed. Normally, they suggest advancing your digital transformation, and some promote their own products. Yet all of them reinforce your role as a banking establishment.

What if you could blur what your community thinks it means to be a credit union? Sure, you provide tools to advance financial literacy and empowerment. But you also have a killer loaded potato, stuffed with informative nuggets about building a savings strategy and the knowledge you’re helping support those less fortunate.

Who’s hungry for some real change?

Old School Thinking

You’re not old, just maturing like a fine wine.

We all do it, no matter our age. “Because it’s always been done that way.” How much sense does that make? Say it aloud. Would such a declaration inspire confidence in your team? It is tempting; humans are creatures of habit. Do you have a morning ritual? How about a specific way you tie your shoes? It’s very easy to switch from active thinkers to passive participants in our own lives.

Good thing this has nothing to do with our work. What was that? We get into habits there too? Impossible, we’ve always done it this way and it has worked…oh boy, you got me! Is there refuge from a life of pre-set habits?

Stop everything. Breathe, but differently than normal. Place your hand over your abdomen and feel it rise and fall with slow rhythm. In…and out. In…hold…and out. No chest breathing; keep your shoulders in a relaxed position.

Now, were you focused? In the moment? Out of a habitual stupor? Wonderful, now it gets hard.

This happens every day, in all areas of work. And some may be sapping your success.

It’s time to look at everything through the senses of a baby. Imagine how they perceive the world…no preconceived notions, no judgment, just wondrous absorption and processing. The first time they toss something and it falls down…remember, they weren’t sure where it would go…up? To the side? Hover in place? (We all know the answer…mom or dad picks it up, of course!)

Whatever you have done in the past, reassess to see if it truly makes sense in achieving your goals. This may involve member communication, marketing strategies, or workplace organization. Nothing is out of bounds, including how you evaluate…that may be tainted as well!

Remember, your business (be it credit union or otherwise) and your life are active experiences…why be a passenger?

Serving Credit Union Members Best – Auto Loans (Part 3)

Welcome to Part 3 of what became the Unseen Credit Union Competition series. The first part highlighted what members receive in the mail from not-to-your-standards protection services. Did they know you could help them more effectively, at a lower cost?

Then we saw “A Credit Union Member Walks Into a Car Dealership…” This revealed the necessity of positive, mutually-beneficial relationships with car dealers. It also raised the question of what your CU offers alongside that loan. You may know. Do your members?

This post continues right from where we left off, finishing the buying process. We’ll look at how your credit union compares on the “easy scale” for loan closing, protection offerings, funding, and more. Remember, it’s always about getting the member what they really need…easily!

Be Confident! Credit Unions Can Compete.

Women at Table Laughing
What do you mean that’s not you and your dealer partners?

What’s your loan team’s relationship with auto dealers? In the previous post, we saw the range from best buddies to mortal enemies, with everything in-between.

Unless you are able to meet all your lending goals through tent sales, you’re going to need to work with dealers. That doesn’t mean you have to be a pushover!

Explain to your dealer partners how members sent there may receive information about your ancillary services and financing. If the member wants to learn about dealer offerings, that’s their choice.

Some members will just do everything at the dealer. Perfect for your indirect program, if you have one.

Others will want to do it all on their phone before ever visiting the dealer. And stopping at a branch? Fat chance! Thus, how can you help accommodate this scenario? Does your technology allow it?

Credit Unions Can Sell. Really!

It shouldn’t matter how members choose to conduct their car search, financing research, and buying process. You simply need to provide the tools to make it easy.

Talking Through Can and String
An unlikely, though fun, communication medium.

Which leads us right into talking about your products! Ok, maybe not talking, but some form of member interaction, whether chat, clean website/app, or something else. It’s for them as much as for you!

This is where you guide members through what you can offer. Explain why each matters to them (Big Data comes in handy here) and how you are helping reduce their risk, expenses, while preserving peace of mind.

It sounds like selling. Maybe you’re not about selling to members. Then let’s change the word: Helping. Would you be willing to help your members choose what services make the most sense for their situation?

Since you’re not always doing it in-person, yes, that means some pretty awesome site and mobile app design. You can do it!

I was “sold” GAP by my credit union like this:

“Ok, so your loan is approved. Do you want GAP? It can pay the difference between your loan and insurance payout in the event of your vehicle being totaled. It’ll be $$ more per month.”

I declined. Shocked?

I’m Just Browsing

If you’re at a store and someone asks if you need help, what do you say? “No thanks. I’m just browsing.”

In this case, I’m just browsing the ancillary services. If you present them as I expect, ie. selling, I won’t be interested. Yet maybe it’s actually perfect for me!

Ask on Iron Swinging Sign

Presenting your services with a product description and cost isn’t appealing to anyone. It’s about asking the right questions, then offering what makes sense in the right way for that member.

I’m not going into selling here (we’ve talked about that many times in the past). Ok, maybe I am. Again, because it’s so important! Let me repeat: Selling is helping. And you are helping, right?

  • Your car buying service helps save members time and money. Explaining its benefits and how to best take advantage isn’t selling.
  • GAP helps a member avoid thousands in unexpected costs after an insurance settlement. Sharing the exact “GAP curve” that member experiences isn’t selling.
  • VSCs are expensive up-front, but how might a surprise $2000 repair affect your member, their job, family, and financial stability? VSC helps your members keep their car on the road (and reduces repossessions, which are often caused by unaffordable vehicle repairs). HIghlighting this isn’t selling.

Your Member Walked Into A Dealership…

Menu with Food and Dealer Offering
That looks appetizing…

The dealer your member visits will present all of these services. You know they’ll be more expensive, and who knows if they are even the best fit?

But if it’s the first time your member hears about them, that’s a huge opportunity missed for your credit union.

And it’s a disservice to your member.

On the other end, it’s important the credit union recognize the partner status of the dealers. They have the “cool” part of auto loans. Just because you need them doesn’t mean they have to hold all the cards.

Shaking Hands Partners Chalk

Creating a beneficial relationship for all parties means the experience is better for your members (and the credit union, too!).

Then there’s the question of “selling”. There are two extremes. We covered one in the first part: Companies trying to sell your members questionable products they may or may not even need.

The other extreme is not mentioning anything to a member. You probably fall somewhere in the middle, and that’s a great place to start.

Now, it’s up to you to make sure you provide the best everything for a member. And ensure it’s clear and easy for them!

Because isn’t “serving members the best” what your credit union is all about?

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