Recently, I wrote about the reality of budget season: how budget season always begins with ideas for big programs and changes for the year ahead, but ends with a tightly sealed budget, a small list of usually regulatory-driven “must do projects”, and only memories of the grander projects proposed at the beginning. And how credit unions can break through that annual archetype by identifying at least one signature project that they will commit to for the year ahead and renewing that commitment at the beginning, middle, and end of the planning cycle. Finally, I suggested 3 specific ideas for potential signature projects:
- Build a new product
- Go deep on a marketing campaign, or
- Implement or enhance a channel.
Today, I’ll dive into the first of these ideas, to help you make it the ONE THING your credit union does in 2016. (Watch for upcoming how-to posts about ideas #2 and #3!)
Build a New Product for Your Credit Union
Why build a new product? It’s simple, really. There are very few things that can simultaneously awaken and galvanize both your members and colleagues like the launch of a new product. We operate in a world of largely intangible services – there is very little you can touch-and-feel in our industry. For that reason, in years past we would rely on our one tangible asset – the branch – to be the hub of excitement, and we would open new branches to show our strength as an institution and celebrate these events with members and colleagues. But branch-openings are increasingly rare, and moreover are met by our members with a passing yawn. Indeed, in its 2015 North America Consumer Digital Banking Survey, Accenture found that 81 percent of consumers said they would not switch banks if their local branch closed. Only two years ago, that number was 48 percent.
That leaves us with product as our most tangible (while admittedly still intangible) asset for generating member and colleague excitement. Well-built banking products are more than just a transaction-channel, more than just a financial calculation, and more than a promise of consumer-benefits; they are ALL of these things combined and packaged-up into one. As a result, products have the potential to draw attention and intrigue in a manner that more closely resembles a shiny package under the holiday tree than a mundane new check-box on an ATM-screen or VRU-prompt ever could!
But, just like that present under the tree has to be relevant for its intended recipient, so too do your new products. It is critical that the starting point for your new product be consumer wants and needs, not the credit union’s income statement. Don’t over-complicate your approach; rely first on your intuition that most members have fairly basic desires: access to competent service, availability of multiple channels that reliably work, and substantial rewards for their business.
If you adhere to these basic consumer desires, you CAN devise a profitable financial model for your new product(s). How? By establishing a value-exchange with your members, one in which their profitable banking behaviors are clearly and demonstrably exchanged for fair-to-generous levels of service, access, and rewards.
So what’s stopping you?
Why do we still hear so often that ours is an industry of “commodity products”? The deafening cries of “my inflexible core system” and “we have no resources” are undoubtedly reverberating through your heads — but they needn’t be. The fintech space has grown exponentially in recent years, to where it is now a veritable playground of vendors offering slick and well-tested off-core and quick-to-market solutions. Sure, some are more “off-the-shelf” while others are more “customized” — but they are out there, ready to be neatly (and quickly) assembled into your new product, packaged-up and shining under your holiday tree!
Watch for my upcoming how-to posts on DOING ONE THING ideas #2 and #3 — going deep on a marketing campaign, and implementing or enhancing a channel.