GreenProfit Solutions Publishes White Paper on Converting Indirect Borrowers to Members
Research expected to assist credit unions in maximizing their profitability
Recent studies indicate that indirect auto lending in credit unions is now at record levels and trending upward. This welcome surge in auto loan business comes with a price: razor-thin interest rate margins and growing numbers of single transaction members. CU metrics such as Relationships per Member, Income per Member, and overall ROA can be negatively affected without a program to successfully convert these indirect borrowers – a task which has historically been a challenge for most credit unions.
GreenProfit Solutions, a company whose cuZOOM! brand provides member conversion, loan attraction and loyalty services, set out to answer this question: Converting single transaction indirect borrowers to multi-relationship members: With margins so narrow, what are lenders doing to brand themselves and encourage sales of other services?
The last industry paper on this subject was published in 2008 by CUNA Lending Council during a vastly different financial environment. GreenProfit Solutions decided to research and revisit this perplexing issue to uncover best practices now being employed and present ideas that can assist in raising conversion rates.
“Besides our research, we wanted to get peer input, so with the increase in popularity of LinkedIn Groups for collaboration and discussions, we decided to simply post the question in various CU industry groups” says Keith Winn, Founder and Chief Operating Officer. “Even being aware of the challenges, we were surprised by the overwhelming majority of responders who had no or little success in this area. While only a small minority reported on a successful program, we were pleased by everyone’s openness and willingness to share.”
Winn explains that the 15 page white paper which is available for download at http://www.cuzoom.org/whitepaper analyzes what has changed and stayed consistent since the CUNA report, references various marketing studies, including several on Gen X and Y, includes the actual feedback from a sampling of their 63 CU responders, some with excellent data and metrics, and offers conclusions to help guide those credit unions interested in starting or improving their existing strategies.
cuZOOM! is a brand of GreenProfit Solutions, Inc. which provides innovative, forward thinking specialty programs for credit unions to assist them in their mission of “People Helping People”. cuZOOM! works on the principle of Reward. Engage. Convert. Retain. to help strengthen member relationships.