Does your member want a car loan or a car?
Everyone wants a piece of your member’s money and relationships. Apple Pay, Mint, GreenDot, the bank down the street all are vying to take a slice of wallet share, be top of wallet, or to get the next dollar of spend. In my experience, every year we would survey our members and hear that they want more convenient services. Management would then focus on more ATMs, more branches, more products, 24/7 call centers, etc. Strangely, with each attempt to match the services of our competitors we further commoditize our offerings and make us less differentiated. Through this race to convenience and trying to be all things to all members – we further dilute our brands and hence our value proposition with our members. At the same time, we seem to all be faced with growing and improving our credit unions (or CUSO’s). In my experience, it is often through our attempts to measure success and compete that we ultimately make ourselves less competitive and perform worse. If we can simply step back, and get to the real value drivers we can find easy ways to differentiate, gain market share, and create unique value that members will happily pay a premium for.
Early in my entrepreneurial career I focused lots of attention on the financials. I would study them each month for trends and business mistakes that I could learn from and fix. Strangely the more I studied and fixated on the results, the less they improved. Finally, I met a fellow entrepreneur who pointed out that financials are simply the sums of our prior business decisions (short and long term) and have very little bearing on what the future holds. Essentially, focusing on the results is kind of like driving your car by looking in the rear view mirror. Probably not such a great idea for obvious reasons. Here are three ways to look ahead at what your members want that will enhance your brand, enable you to charge a premium for commoditized services, and create long-term unique value for your members.
- Does your member want a car loan or a car? Since we are in the business of making car loans this is easy to focus on a metric for making more loans. In reality, the metric that creates more value for your member is the number of members that love their car. By changing this focus – we start to look at how a member actually makes decisions about purchasing a car, registering the car, maintaining the car and driving the car. I don’t know about you, but if you start making the rest of that more efficient and easier for me as a member – I will happily pay a premium for the loan. Sure it won’t work for all members, but if you could get 30-40% to pay a higher rate by bundling in services that make the car buying, owning, maintaining and driving experience better – it would sure rev up your loan portfolio.
- Focus on your best members – This won’t be very credit union like of me but – ALL of your time and creative energy should be focused on creating unique value, services, and products for your best members. Why? Well, why do you want to spend any time helping people who don’t value your help, don’t understand it, and just don’t get it. Sure you are owned by all of your members, but helping the people who want the help is certainly a lot easier and more fulfilling then helping people who don’t want it…Your members who really value the credit union, understand the value of the cooperative movement, are far more likely to do more business with you then your cherry pickers.
- Focus on the first 90 days – We spend a ton of time as leaders trying to get new members. Often times though new members walk in and back out within the first 90 days. Take the time in great detail to understand the member experience during their first 90 days as member. This is where you can really shine and create wow moments that shape the members perception of your brand forever. I switched credit unions several years ago – I started by opening a savings account, then a few weeks later a checking, then I had to change my direct deposit, then I moved a few bills over to bill payment, eventually it was my car loan, mortgage, and credit cards. If the credit union had even asked for the business, or acknowledged my potential they could have moved it all ten times faster and I would have been forever loyal. Instead, I got as far as the car loans and the services were hit or miss…so I stopped moving things over. Now I have an unintended bench mark of what the Credit Union is capable of that will take the credit union years to overcome. By focusing on the first 90 day experience , you can eliminate, streamline, incent, and develop an immediate experience for your new members.
Credit Unions are poised better than most small businesses to leverage their relationships, brands, and capital to deliver exceptional value. In order for us to compete with the huge financial service providers we must put ourselves in our members shoes and think about the real problems we solve and how to inject value into them to differentiate, enhance and deliver premium products and services t our members.