CO-OP Financial Services Blog: Insight Vault

The THINK 2010 Conference is now history, but we hope we have laid the groundwork for the credit union industry to make some new history at next year’s conference.

During Tuesday’s opening session, Caroline Lane, Senior Vice President, Business Development and Marketing, introduced the CO-OP THINK PRIZE. In multiple ways during the next 12 months – beginning with this column – we’ll be reminding you of it.

The CO-OP THINK PRIZE is a $10,000 grant award that will be given for the most innovative and shareable idea that will have the greatest impact to credit unions. The award is intended to go beyond competitive issues and produce progressive thinking that all credit unions could apply to their own institution. Filene Research Institute will select three finalists for THINK 2011 and these finalists will receive an all-expenses-paid trip to the gathering in order to make their presentations to the judges – i.e., registered attendees at next year’s conference!

Credit unions or individuals can participate by applying online at www.co-opthink.org. Exact criteria and entry forms for proposals will be available on the Web site soon. In the meantime, start thinking!

While the CO-OP THINK PRIZE awaits a recipient in 2011, there were several significant awards announced during the course of this year’s event:

• The Founders Award. Presented annually since 1998 to a credit union leader who has played an important role in the growth of CO-OP, this year’s honor went to Thomas E. Sargent, President/CEO of First Tech Credit Union, Portland, Oregon. Mr. Sargent has held his post since 1985, and First Tech now has $1.5 billion in assets and more than 150,000 members.

• CO-OP Credit Unions for Kids Leadership Award – Credit Union.  For the credit union that raised the most money for Children’s Miracle Network in conjunction with the CO-OP Miracle Match program. The award went to Selco Community Credit Union, Eugene, Oregon. The credit union raised $45,000, with CO-OP Miracle Match funds totaling $10,000, for a grand total of $55,000.

• CO-OP Credit Unions for Kids Leadership Award-Association. For the credit union association that raised the most money for CMN. For the second year in a row, the award went to The Austin (Texas) Chapter of Credit Unions. This chapter raised $190,000, with CO-OP Miracle Match funds totaling $25,000, for a grand total of $215,000 raised.

The Children’s Miracle Network additionally benefits from donations totaling $52,500, which were presented during the Credit Unions for Kids Leadership Luncheon held on Tuesday. The donations were made by TEKchand of Chicago, Illinois, and Transaction Network Services of Reston, Virginia. And, $10,000 in proceeds from the conference’s annual golf tournament also contributed to the $52,500 total.

We also had some fun awards at THINK 2010. We had a competition to see who could generate the most tweets about the conference on Twitter. The winner was “iechen” with 135 tweets out of more than 500 in less than three days – she typed nearly one tweet every 30 minutes! We thought the winner really wanted the grand prize (an iPad), but no, she’s planning on donating it to CMN.  Second and third prize winners – “shrktank” and “take_two,” are also donating their iPod prizes to CMN.

Finally, we hope the highly knowledgeable industry speakers on Sunday and Monday, and the world-class featured speakers who spoke on Tuesday and Wednesday made your trip to Scottsdale, Arizona more than worth while.

Our goal with THINK is to provide you a unique source of learning that will help you move your credit union aggressively into the future. We have already received feedback on the conference from Credit Union Times (click here). We’re counting on your feedback to make help next year’s conference even better. Please give us your thoughts on THINK 2010 by clicking on the icon below.

More than 400 credit union executives from around the country are gathering for THINK 2010, this year’s most highly anticipated industry conference, and already, change is in the air. Seven CU-centric sessions kicked off this year’s agenda covering a range of industry hot topics. For those of you who aren’t here – you sure are missed! We thought we’d share a few of the highlights with you.

Here’s the play-by-play from the CU Marketing Best Practices session:

Offering insights into CU Marketing Best Practices, Brad Strothkamp, Principal Analyst from Forrester Research,  stressed the importance of “seizing the credit union opportunity” given the current disenchanted mindset of consumers toward banks.  “If I were running a credit union,” Strothkamp advised, “I would shamelessly promote the credit union difference.”

Because the recommendations of friends are a top method for researching PFIs, Strothkamp stressed, “I would integrate member reviews into my CUs web site.” Forrester studies show that primary customers of CUs are almost three times as likely to purchase additional products from their PFI than primary customers of banks.  “It shows the appetite is there,” Strothkamp added.  He encouraged CUs to look at online marketing beyond banners and buttons.  “Consider integrating contextual links within your Web site to cross sell relevant products.”

Strothkamp outlined that by removing perceived barriers to membership, allowing current members to be advocates on a broad scale, and executing cross-selling flawlessly, CUs could increase membership and profitability tremendously. Duly noted.

Case studies from individual CUs included Ryan Zilker of American First CU who stressed the “importance of understanding the lifetime value of a new account” and even suggested the simple idea of Googling “lifetime value of a customer” to obtain online calculation tools.  Zilker also found success in timing his direct mail efforts toward checking account member prospects to arrive on paydays.  “This is the time when banking customers are likely to be most disenchanted with their financial providers.”

Presenting a poignant example of the “credit union difference,” Matthew Shepherd of Delta Community Credit Union gained consumer confidence with his “Standing Strong” 12-month CD. Offered at 50 bps above top competitors, Delta was able to offset the expense by reducing the year-end patronage. Positioning the CD as “our way of giving back,” the promotion attracted $288 million in deposits in 45 days and 1,209 new members – 1,143 of whom are still retained.

Lori Reeves of Financial Partners CU was able to compete against low intro rates and rewards programs by leveraging her sponsor’s rich heritage. By launching a credit card with proprietary licensed images reflecting her sponsor aerospace companies’ achievements, FPCU was able to grow their credit card portfolio by 1,200 cards in less than three months,  attracting members with average FICO scores of 749.  That’s 70 percent over goal – all without special pricing or promotions.

Zagging when everyone else zigs summed up Todd Kern’s philosophy at USA Fed when he was charged with lowering his average member age.  With the full confidence and buy-in from senior management and throughout the entire organization, he was able to implement a bold, dynamic marketing campaign that permeated every employee and member touch point. Demonstrating that CUs are truly “180 degrees from banking,” Kern’s campaign proved that sometimes turning credit union marketing on its head could reap surprising rewards. After 12 months, the average member age was lowered from 53 to 43, checking accounts were increased by 14 percent, average checking balances were up 12 percent and credit card balances went up 13 percent. Not-the-same-old marketing yields not-the-same-old results.

How’s it working in your credit union? Please leave a comment via the icon below or Tweet us at http://twitter.com/coopthinkconf.

Perhaps it’s a sign of the times, but the CU Revenue Sources session played to a full, and fully attentive house. Hosted by the CO-OP trio of Caroline Lane, Lynn Kneebone and Gail Tofil, the discussion covered current legislation, how to run a profit analysis and how to use and benefit from a portfolio optimization tool.

Lane outlined how interchange revenue is being positioned as “an evil” by groups such as the Merchant Payment Coalition. However, fortunately, these groups’ attempts to convince Congress to enact legislation to set standard rates (which would effectively eliminate free market forces) are not getting much traction in Congress. She cited the U.S. GAO’s (Government Accountability Office) own study revealing that consumers have benefitted from competition in the credit card market. Cross your fingers.

Understanding the true cost of transactions was a key discussion point of Kneebone’s. She shared examples of credit unions that use two or even three processors and how a profitability analysis can reveal where pennies are being lost in every transaction. For one credit union, those pennies multiplied out by all their members’ transactions for the year added up to lost revenue of more than $500,000. Ouch. She encouraged the audience to carefully review their summary reports to get a true understanding of the cost of their transactions. 

Tofil demonstrated the latest tools that credit unions can use to optimize their portfolios and maximize interchange income. She explained the importance of understanding members’ behavior (e.g., where are they spending their money), how to influence their behavior (e.g., selecting a rewards program that is relevant) and ultimately how to measure your results.

Share one of your branding strategies for boasting debit card activity. Please leave a comment via the icon below or Tweet us at http://twitter.com/coopthinkconf.

You can run, but you certainly cannot hide. Like air, social media is everywhere. The big question is, how does your CU “join the conversation” and do it right? According to Tom Woerner, former Managing Editor of BrandWeek, you should not engage in social media until you’ve created a simple, clear brand statement for your CU that everyone can believe in, and clear rules have been set as to how the brand is portrayed. Then, social marketing should be the responsibility of people within your organization. “Poll your employees and find out what platforms they’re using,” Woerner suggests. In today’s world work crosses into personal and vice-versa, so by engaging the power of your employees’ networks, Woerner reminds that “a message from a friend is much more powerful than a message from a brand.”

Uwe Hook, social media consultant, also stressed that social media is not a problem fixer. “You have to be careful to not just talk about yourself,” Hook warned. Both Hook and Woerner agreed that it’s important to develop and execute “content strategies” that include social themes (community related, cause marketing and personal) rather than simply using the media as a marketing vehicle for your products. And, instead of trying to be all things to all people, “Profile the people who you want to visit the site, then, decide on which five tactics will meet your organizational objectives,” suggested Hook. Once you’ve accomplished this, with an executable strategy and appropriate technology as support, you can properly enter and play in the social media space.

Dispelling several myths revolving social media, Hook stressed that, “social media is not free.” Rather, it requires resources and effort, and the person or people in charge of executing must understand the brand’s media strategies and tactics to be valuable to the audience. “It’s O.K. to look to experts to help you build a strategy,” Hook assured. And, once you’re in, “It’s a rapidly changing environment and you need to be committed to it.”

Your thoughts? Tell us by leaving a comment via the icon below or Tweet us at http://twitter.com/coopthinkconf.