A Resolution Worth Keeping (And 3 Tips to Help You Keep It)

by Stephanie Lutz

Ahh January…a time for new beginnings, new goals, and resolutions.  Although it’s become a popular joke that New Year’s resolutions seldom see the light of February, there are a handful of the most critical and important which survive.  Your credit union has probably set resolutions for itself for 2013, although we’re guessing you’ve chosen the more forceful term “goal” to describe them.  They may include new member service goals, infrastructure updates, adding a super-cool new piece of technology to make members’ lives easier (or to make your lives easier).  These are all valuable resolutions and will inevitably help your credit union.  However, another resolution that may not feel as exciting is the one to increase non-interest income from opt-in member benefit products.

With 40 years working with credit unions under our belt, we can’t even count the number of times this one has fallen into the black hole of resolutions abandoned.  Year after year we have seen credit union leaders with the best of intentions insist that this year will be different, that they will actually push to increase the sale of loan protection products like credit insurance, debt protection, gap, and warranty.  Then, as the year progresses, this goal gets bogged down in the day to day course of business-as-usual and brings only disappointment come December.

It’s important that you don’t let your credit union fall into that trap this year.  In fact, Callahan & Associates recently published data via an article on CreditUnions.com which outlines the crucial role non-interest income plays in a credit union’s sustainability.  They revealed that non-interest income per member has risen 12.1% since 2011, showing that many credit unions are depending on it to keep providing the services members have come to expect, even in a low interest rate environment.

Of course, you probably already understand the importance of non-interest income to your credit union.  The challenge is how to achieve growth in products that will help boost your numbers, but aren’t fun or exciting to sell or offer to the member, like credit insurance, debt protection, gap, and warranty.  Here are three tips that we see working at our most successful credit unions to get you started:

1.      Products should be easy to offer and quote.

This is probably the most important thing that you can do to help boost sales.  If a loan officer has to pull out a spreadsheet the size of the desk or do any kind of calculation on their own in order to offer a product and add it onto a loan, it’s probably not going to get sold.  Heck, it’s probably not going to get offered, so the member doesn’t even know about it (not a great thing from a member service standpoint).  Find a tool that makes it easy for your staff to quote the add-on products that you want them offering to members.  Make it part of the process that they have to go through in order to complete an application so that they see it (and offer it) every time.  You’d be surprised by how much you can boost your sales penetration just by asking the member if they want the product, no sales pitch required.

2.     Explain the benefit of the products

This might sound like a no-brainer, but there are lots of credit union employees who see loan protection products as a scam or don’t feel comfortable enough with their knowledge of the products to field questions, making them reluctant to offer it.  You can help to fix that by providing training that explains the benefits of each product.  Try to find member testimonials to show how the products have helped people in real life.  Also, put together an FAQ cheat sheet to help ease the fear of unknown answers to a member question and make sure your staff knows that it’s ok to record a member’s question and get them an answer later after they have found it.

3.     Have the right people in place to get the job done

To be perfectly frank, there are some loan officers who have no interest in offering add-on products to members.  This could be because they do not see the benefit in them or it could be that they just can’t be bothered to try.  If you are serious about increasing your penetration, then these people will only harm your chances of success.  Try to figure out what their key motivators are (praise, small prizes from a contest, donuts on Fridays, etc) to see if you can bring them around to a point where they are willing to get into the spirit of keeping your credit union’s resolution.  Unfortunately, you won’t always be able to turn them around, in which case you may have to decide if they are “in the right seat on the bus”.

You probably noticed that all of these tips revolve around the people offering the products to your members, making their job easier and more efficient, training them properly on how to offer the products how they benefits members, and cultivating your team to make sure everyone is working together to achieve the credit union’s sales goals.  It’s not an accident that these tips could be applied to almost any member-facing initiative your credit union takes on.  The difference is that the truly successful credit unions that we’ve seen extend it to their sales goals as well, especially when it comes to boosting penetration of loan protection products.