Build an effective base to capture greater share of wallet

As we near the end of another year of continued uncertainty regarding interest rates, sluggish loan activity, regulatory action and competition from non-traditional financial service providers, many credit unions continue searching for ways to generate revenue to maintain stability and create growth opportunities for next year.

But before you get too far down the path looking for new prospects and improved profitability strategies, don’t overlook the opportunities that exist within your organization to capture a greater share of wallet from your current members.

Shore up long-term loyalty

Oftentimes when I am approached by a credit union looking for advice on how to increase business, the conversation begins with, “How do we attract new members?” And while there are many possible directions the conversation could take in addressing this dilemma, I am always interested to know if the organization is aware of how many of its products its current members use. A study by Forrester Research found that, on average, adults use 8.2 financial products, but generally have no more than two or three at any one financial institution.

Increasing the number of products and services used by your members can have a major impact on their long-term loyalty to your credit union. According to industry findings, on average an account holder who has one product with a financial institution will stick with that institution for about 18 months. Increase product usage to three or more products and loyalty to the institution increases to nearly seven years.

Cross-selling products is key

Keeping your finger on the pulse of what attracts consumers’ attention in this ever-changing digital world can be challenging. But you can establish yourself as your members’ primary financial institution and increase your overall share of wallet by determining which products and services they need – including checking and savings accounts, mortgage and personal loans, credit/debit cards, online and mobile banking apps.

Following are strategies to help you achieve these goals:

  1. Simplify your product offerings

Beware the traditional belief that having more is always better. Too many product choices can be confusing to members and difficult for employees to explain. Streamline what you offer, based on good information of what your members want and need. And keep in mind, as consumer demand for more sophisticated products and services increases, you may be required to look outside of the realm of traditional products that you have relied on in the past.

  1. Focus training on technical and soft skills

I often find that talking about developing a sales and service culture sends chills up the spine of institutional management. For many employees the very mention of cross-selling or increasing product sales translates into code words for using a high-pressure approach to get more business. Instead, I encourage clients to equip their member-facing staff with the product knowledge and soft skills they need to consult with members, identify what is needed to fill their long-term financial goals and demonstrate that your credit union has their best interest in mind with the products and services you provide.

And remember, quality training is not simply showing employees how to do a job, but helping them to acquire the necessary knowledge required to perform their duties accurately, through a training format that complements their unique learning styles – whether it is web-based, classroom, homework or role-play.

  1. Mine your data for treasures

When a member opens an account or applies for a mortgage or personal loan, employees have an opportunity to gather data that represents real value to the credit union. This information can be mined to determine what products and services members need based on their circumstances. If they are buying a home, do they need a mortgage loan? If they open an account for a child or teenager, might they also be in the market for a car loan or financial assistance for college? By getting to know your members at this level, you can increase their loyalty and capture additional share of wallet for the credit union.

  1. Create and maintain a supportive culture

For any sales and service strategy to be successful, it is critical for member service and operations to be coordinated and on the same page. At John M. Floyd & Associates we routinely work with clients to make sure they have procedures in place to simplify their processes, such as streamlining account openings and utilizing technology to share member data across departments so it only needs to be input once.

Excellence stands out, even in a busy world

Remember, if you can provide consumers the ability to open an account or get a loan quicker and easier than an institution down the street – while providing products and services that meet their on-going financial needs – they will most likely check with you the next time they need financial products and services, instead of spreading their business across multiple financial institutions.

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