Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: value

The Pizza Place Incident

Originally published on

This post highlights what I’ve come to call, “The Pizza Place Incident”.  In reality, it was nowhere near as exciting as the title implies.  Or was it?  (Cue dramatic chipmunk)

Here’s how it’s going to work.  I’ll share the story first.  After each section, we will discuss the key points the restaurant missed and how you can avoid them at your credit union (yes, pizza and credit unions relate).

It was a rainy evening in south Florida.  Which, for those not from here, means, “between July and November”.  My family sought shelter and sustenance at our favorite local pizza shop.  Braving the tropical squalls in our trusty four-wheel-drive while SiriusXM played songs of sun and sand, we safely arrived, our only sufferance the delay of a few red lights.  Upon sitting at the lone remaining table, we steal a glance at the menu we know so well.  Only it’s different.  Prices crept higher.  Some choices gained a dollar or so, others more.  One in particular changed in an odd way.  Of course it happened to be my mom’s favorite meal.  Instead of just raising the price, the core items were now extras.  Like broccoli.  On a dish previously called, “Pasta With Broccoli and Garlic”.  How much?  $4.  The same, I should mention, as the cost for shrimp or chicken.  Yes, chicken, shrimp, and broccoli all carried the same up-charge.  When we asked the owner about it, their response was equally perplexing.  “Yeah, that’s the way it is.”

Did she end up getting the dish?  Yes.  With the broccoli.  But she was less happy about it.  Which brings us to our first lesson break.  Make sure to stand up and stretch.  It’s important to remain active throughout the day.

If you’re going to raise prices, you must add value, perceived or otherwise, that is worth more than the increase.  Otherwise, customers get angry and may leave negative reviews (you do reply to them all, right?) or seek out a competitor.  In this case, charging the same for broccoli as shrimp made it even more frustrating.

This wasn’t the only issue faced that night.  Another item we ordered was a large pizza.  Theirs happens to reheat especially well, making it great for future meals.  After taking far longer than it should, we asked our waitress on the status of the pie.  She begins to profusely apologize, as she served it to another table (who, oddly enough, didn’t turn it down).  They had ordered a small, and it was just coming out of the oven.  We could have it in lieu of waiting for a fresh one to be prepared.  Sure, pizza is pizza, despite fewer leftovers.  Our waitress, who raced around the restaurant the entire evening, managed to stop running long enough to explain it was her first night.  “They just don’t do things the same at this location.” (The owner has a few shops around the area).  Ah, ha!  Another lesson point to be made.  Let your slice cool for a moment while we do some learning!

When your processes are unpredictable or nonexistent, you make it challenging for anyone else to create a consistent experience.  I watched as the owner micro-managed every action of the kitchen staff, the front register, our waitress, the delivery guy, and the baker.  Worse, she gave conflicting instructions depending on when she walked by.  It was obvious no processes were in place, and, as a result, mistakes were made.

Consistency is essential.  There’s a reason every Big Mac, across the planet, comes out identically.  And, for those who eat such things, that is part of the appeal.  You know what you’re going to get.  It doesn’t matter if Jan or Steve is out that day.  Anyone can follow the process to prepare the same burger.

Despite the issues, we still had a delicious dinner.  Even the weather cooperated on the drive home.  But it was a night of lessons.

  1. Pricing: Your members want to pay less and get more.  That’s normal.  So brainstorm how you can deliver value throughout their relationship to rationalize any costs.  It could be a value-add fee checking account that helps protect members’ identities and more*, or inclusive services paid though outside relationships.  Consider what you can do to grow ROA (or return more to members and your community) without imposing NSF or other punitive fees.
  2. Processes: Too often, I’ve been interacting with a credit union (client or otherwise) and their reason for a random delay is, “Bob handles that and he’s really the only one who knows how to do it.”  Worse is, “Beth ran that, but she transferred to another credit union, and we’re not sure where she left things.”

Avoid “The Credit Union Incident” by following this guidance.  Beth’s replacement will thank you.

*Disclosure: My company offers such a service and produced a white paper to help credit unions determine if it or a similar solution might be a fit for their institution.

Image credit: Wikipedia

Your Members Hate Keeping You In Business

“Free is the greatest product never sold.” – Me, just now

Did I just come up with some crazy insight? Who knows. I just heard quotes at the beginning of an article lead some to get “hooked” and continue reading. See? You’re reading.

Back on topic, what do you offer for free at your credit union?  Of those things, which are premium services at other financial institutions, be they banks or other credit unions? I’d like to ask why you decided they should be free. Is there a cost to you? Is it a benefit to the member? If the answer to both of those questions is “yes”, then wouldn’t it make sense to ask, “what’s the benefit worth to the member?”

I’m all for lower or eliminated fees. They are punitive forms of payment (and research shows they are overwhelmingly burdened by those least able to afford them). That means your members aren’t happy when they have to pay. However, many subscribe to Netflix, Amazon Prime, Birchbox, and Blue Apron. The money spent is done so happily, as these companies offer more perceived value than the cost. Their products/services are a reward for spending, not a punishment resulting in forced spending. 

So, let’s review. Your credit union makes its money through things people don’t want to pay, like interest rates and fees (even if yours are lower than competition). There is a proven model in society of paying for things you do want. Credit unions should be things people want. What if you could change the dynamic, so your members are excited to “renew their membership” with their credit union?

It’s time to turn the whole model on its head. Instead of jumping about cheering for free and boring, let’s charge for value. Use that income to reduce or eliminate punishment fees. Shift the cost burden for your operations from those who can least afford it to those who want to pay for the benefits. Create an environment where members are happy to pay for all they receive from you. Guess what also comes with it? Members remember who you are. They consider you first for financial solutions. They recommend you to family and friends (your referral platform is ready, right?).

Will all members see the value and want to pay? No, and that’s fine. You can maintain basic, free services for those members. Remember the ones who couldn’t afford to pay? Now you’re really doing them a favor and living the credit union mission.

Sure, things like interest rates cannot go away. And you’ll have to keep some fees, just to protect the credit union. But what’s so bad about (partially) becoming a pay service offering incredible value? Netflix couldn’t offer what they have without charging. Blue Apron’s recipes and food would be pretty awful if they were in a race to free.

So go ahead, step out of the free zone and get uncomfortable. We all know you need to make money to survive. It’s just that none of us want to be the one who does the paying. How can you change that dynamic?

Disclosure: My company offers fee-based checking solutions to credit unions and community banks which deliver ongoing and substantial value to members.

Earshakes vs. Handshakes

Hello, can you hear me? I’m currently flying back from LA after two days of meetings with partner companies and clients. Geek fascination: This iPad is online…while it’s magically floating over 30,000 feet above the western United States. Is the connection any good? Not particularly…no video and the streaming audio struggles. But, hey, Twitter and Facebook!

Of course, the travels got me thinking (oh no!). Much of our business is conducted over the phone and computer. It has proven an efficient and effective manner of communicating. We are able to include multiple participants spanning large geographic ranges in a single conversation. Often on short notice, something just not possible with face-to-face. Take a morning meeting with a partner in Texas, joined by others in California. Enjoy a break for lunch, then go to NYC for an operations update. Sure, since the advent of phones we could do such things, but adding the file and screen sharing really seals the deal. (Out of respect for all parties, we rarely ask for video-based meetings. If sweat pants are your thing, that’s quite alright.)

Simply put, we would be unable to build or support our client base without such technologies.

Yet there’s a value to being more than within earshot.

A partner summed it up perfectly yesterday as he explained, “we have been speaking for months; I know all of your voices and your names are a familiar sight in my inbox. But it really is great to put a person to those things!” He continued with an even more astute observation, “It was beneficial to see everyone’s faces as a question was asked, or to see their body language. On the phone, you can cover that up. In person, it’s all there.”

Could it be? Does our trust of others revolve around observing them directly? At least to some point, this is true. We make consciously-imperceptible movements when interacting with another person. You may not notice, but your brain does. Ever just “get a feeling” about someone, good or bad? Thank your brain for catching those subtle cues.

While we will always embrace the technology, efficiency, and convenience of online meetings, this will be a year of handshakes over earshakes. Are we working with you? Will you be reprinting this blog in the Metropolis Daily Bugle? (How did you get it past Jonah Jameson?)

Then grab your sonic screwdriver, open up your tricorder, draw your light saber, because you might just get a visit!

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