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?
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.
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.
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!
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…
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.
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?
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.
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?
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)
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
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!)