CO-OP Financial Services Blog: Insight Vault

“What if all the credit unions suddenly went away?” asked “Got Milk?” creator Jeff Manning. “How would that affect people? No one would get a home loan? There would be no credit cards? I doubt that. So, what would be missing in a world without credit unions? When you can answer that, you’ll have your value – the thing credit unions offer that no one else does.”

If this question is difficult, so is the task before us. Wednesday morning’s final THINK 11 session brought together “Got Milk?” creator Manning; banking trends expert Brett King, author of “Bank 2.0;” Nancy Hill, president and CEO of the American Association of Advertising Agencies; and Caroline Lane, Senior Vice President, Business Development and Marketing, CO-OP Financial Services. The objective: sussing out the story credit unions need to tell the world, then finding a way to sell it.

It was a morning of provocative ideas. King argued – not unconvincingly – that the entire future of banking is virtual. Google-literate consumers are knowledgeable, choice-driven and unsentimental. If you think technology is optional and unlikely to catch on, consider that in present-day Kenya mobile banking is already the mode of the day, and features we only dream about here (mobile-to-mobile money transfer, for example) are already commonplace there. For kids and college students, paper checks and visiting the branch are strange, exotic notions; mobile banking is as natural as picking up a new video game.

Message to credit unions: Deliver what consumers are already demanding or become obsolete.

Manning’s observations were less technology-centered but no less urgent. In order to win consumer attention – and, more important, action – credit unions must deliver their message over and over in various media and formats. “People need to hear a message 30, 40, even 50 times before they can process it and consider taking action,” said Manning.

Even more fundamentally, though, Manning wanted to know what that message might be. Belonging to a credit union doesn’t create the kind of immediate, desperate desire one feels for milk with cookies. So, how do credit unions create that desire?

When Hill and Lane joined the conversation, the topic expanded to the possibility of creating a national campaign to promote credit union awareness. Can 8,000 credit unions join together to find a unified, compelling message – as milk producers did with “Got Milk?” Lane admitted that bringing the movement together on this kind of initiative is a huge challenge, but she also said it was one worth considering.

“We aren’t an industry; we’re a movement,” said Lane. “We bring an extraordinary amount of passion to helping our members.” If fulfilling that mission means doing the hard work of adapting to new realities and figuring out how to tell the world just how plugged-in we are, then credit unions will rise to the challenge. Because, while we might imagine a world without credit unions, we wouldn’t want to live there.



In Tuesday morning’s THINK 11 sessions, the discussion ranged from cashmere to mood lighting, teen entrepreneurship, social media, customer worship and employee empowerment. But if there was a key question, it might be the one our mediator – the superb Valerie Coleman Morris – asked at the end of the roundtable: “If you didn’t work at your credit union, would you want to be a member?”

Walking in your members’ shoes was precisely what customer experience expert Jeanne Bliss advocated in her idea-packed presentation on becoming a beloved company. Bliss believes in the unifying power of customer experience, and to that end she had a few recommendations for credit unions that want to take their customer approach to new levels of excellence:

• Put member voices in your executives’ ears. Bliss recommends having executives talk directly to unhappy or departing members. This isn’t punishment: It helps company leaders understand at the gut level that members are human and trustworthy, and that each has a story to tell. What faster way to identify where your credit union needs to improve?
• Hire employees you trust. Instead of focusing entirely on skill sets, consider hiring employees who share core values. If your whole team works with integrity, humanity, judgment and heart, your members can’t help but be wowed.
• Bring together cross-functional teams. Find out which touch points are most important to members, then work together to make the member experience seamless, memorable and – to every extent possible – joyful. Your members interact with your credit union across silos; your team should come together to deliver the best experience as well.

When organizations bring the full force of their talent and passion to the task of serving members, only then do they earn raves from their members. Bliss notes that only high levels of enthusiasm register in word of mouth or social media.

And yet, Porter Gale offered a shining example of turning rave reviews into massive buzz. As vice president of marketing for Virgin America Airlines, Gale has the fun task of promoting an airline that everyone loves. But she also presented the very real challenge of creating excitement, capturing stories and maintaining a constant social media presence on a budget.

In Gale’s presentation and the THINK IT OUT session with Bliss and Coleman Morris that followed, it was clear that Gale has an extraordinary bank of material to work with. In one photo, she showed Virgin America planes being accompanied into San Francisco International Airport by Virgin Galactic spacecraft. In another, a social media intern poses with rap-pioneer-turned-reality-star MC Hammer. Virgin America hosted a gathering of YouTube stars, who broadcasted in flight from their plane.

These stories may sound a little more, er, glamorous than what happens at your credit union each day. Yet, Gale encouraged attendees to mine their own organizations for stories that capture the human element: “A friend was telling me recently about her five year-old daughter taking money to the bank, and how the people at the bank (or credit union, I don’t know) make a big deal about it. It’s a sweet story and there are probably others like it at your credit unions.”

Monday morning THINK 11 shifted gears from Sunday’s examination of the credit union industry to the really big question of vision. After so much stripping away – of old formulas, identities, revenue expectations and realities – how do credit unions rebuild? And how do we rebuild in a way that is meaningful for the future?

CO-OP’s Caroline Lane, senior vice president of business development, and Samantha Paxson, vice president of marketing, made the case for a new focus. Instead of fixating on the bottom line – or even product lines – how about recasting your goals in terms of member satisfaction? “The product at Disneyland is happiness; that’s what they create every day,” said Lane, who, like Paxson, is a Disneyland alum.

Paxson agreed: “Disneyland doesn’t think in terms of operations. Keeping up with technology is never the goal. Making people happy is the goal; operations and technology are simply a means.”

Making your members happy is an excellent ideal, but in a rapidly changing, increasingly complex world, getting there requires innovation. Sir Ken Robinson, one of the world’s leading experts on creativity (see his brilliant 2006 TED speech here), argued that creativity is neither rare nor exotic: “If you’re a human being, creativity comes with the kit.”

The trick for organizations is creating a culture in which innovation thrives. Robinson suggests giving employees “permission” to share their ideas, finding ways to spark imagination in your organization (at Pixar, he notes, all employees attend four hours a week of workshops and seminars designed to present new, compelling ideas from which inspiration and discussion can begin) and allocating resources to trying out new ideas – even if they result in a few flops.

If there’s a term for creative success through persistence, that term might be “Tony Hawk.” The 12-time world champion skateboarder – famous for landing the gut-twisting, mind-altering “900” (ask your kids what this is) – shared his journey from 9 year-old mischief-maker to multimillionaire businessman. After turning pro at age 14 in an “industry” that had yet to find its footing, Hawk made many missteps. Initially delighted to be making money from licensing his name, in his own words he, “signed so many contracts that many were conflicting. It took lawyers a lot of time to get everything sorted out.”

Still, the determination that served him well on the skateboard ramp proved to be handy in business. He and a partner launched their own skateboard company, Birdhouse Projects. From there, Hawk became the driving force behind his own Boom Boom HuckJam tour, the insanely successful Tony Hawk’s Pro Skater video games, Hawk Clothing, the Tony Hawk Foundation (to promote skate parks in underprivileged communities) and Athletes for Hope. By following his gut and always being up for entertaining a new challenge, Hawk has taken his legend beyond skateboarding and into the boardroom. “My only secret,” he said, “is that I never quit.”

CO-OP Financial Services’ THINK 11 Conference kicked off on Sunday, May 15 with nine industry-focused sessions. These first workshops were designed to address leading-edge ideas and topics of immediate interest to credit union leaders, who currently face a challenging and unprecedented industry environment. Topics included:

• Leveraging cloud computing to reduce IT costs
• Emerging technologies and trends in fraud detection
• Social CRM and loyalty marketing
• Grassroots membership growth
• New payment legislation – Durbin and beyond
• Growth through new payment trends
• Using analytics to ignite your debit program
• Uncovering hidden loan potential
• Building member loyalty from inside and out

In his discussion on cloud computing, Ongoing Operations CTO Hugh Smallwood cited virtual technology as key to keeping up with innovation while keeping costs down – particularly for credit unions that are dependent on secure and cutting-edge technology but don’t have the budget to redo their systems every time an upgrade opportunity presents itself. Where many organizations are already deploying cloud-based systems for things like email, Smallwood predicts that credit unions will shift to outsourcing for everything including core systems in the years to come.

“By 2012, Gartner predicts that 20 percent of businesses will own no IT assets,” Smallwood says. But admittedly, there’s a lag between credit unions’ interest in outsourcing and their vendors’ willingness to accommodate them. “There’s little incentive for current contractors to shift to working with cloud-based technology now,” he continues. “It may be that providers will need pushing,” possibly by CUSOs like Ongoing Operations that represent multiple credit unions.

Presenters Sue Mitchell of Mitchell, Stankovic Associates; Brandi Stankovic Rice of BLS Consulting; and Joe Schroeder of Ventura County Credit Union fired up their standing-room-only session with tales of grassroots community outreach that spanned the globe – and hit close to home. While Mitchell spoke of her travels to Africa and volunteer work with the Global Women’s Leadership Network (“Access to affordable financial services can be life-changing for a family,” she noted), Schroeder detailed Ventura County Credit Union’s efforts to reach local farmworkers in order to grow membership.

Inspired by a larger program called iBelong, which has brought mobile banking services to rural areas of Mexico, Ventura County Credit Union just launched an initiative to provide basic financial services to the county’s largely unbanked farmworkers. Though the program is only two days old – and a long way from providing conclusive results or a positive bottom line – Schroeder is effusive about its prospects.

“This isn’t going to improve our bottom line any time soon,” Schroeder says. “In fact, it’s going to divert resources from other programs. But as an industry we’re so involved with our net worth and regulators and the rest of the day to day that we’ve gotten out of kilter about the philosophy and passion behind being credit unions.”

The THINK 11 sessions for Monday, May 16, will focus on broader issues facing the industry – including creativity, vision and how Tony Hawk’s awesome skateboarding skills translate into good business. For the first day, attendees found plenty to discuss simply talking about credit unions.

CO-OP Financial Services is very proud to announce that the fourth annual THINK Conference will be held May 14-18, 2011 at Disney’s Grand Californian Hotel in Anaheim, Calif. The hotel is located just 37 miles from CO-OP’s headquarters in Rancho Cucamonga, and it is right in the center of “Imagineering,” Disney’s term for innovative thinking. Incidentally, it also marks 30 years of credit union service for CO-OP. In honor of our anniversary, we hope you’ll save the date. East coasters, we’re coming your way in 2012 – stay tuned! Read more…

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.