AUSTIN, Texas—If the credit union tries to be the same as its competitors, it will eventually succumb in a losing battle, cautioned the CEO of one thriving CU.
Bill Burke, whose nearly $400-million Day Air CU in Kettering, Ohio, has earned an average of more than $4 million in net income annually in the last five years, told attendees at the CUTomorrow Conference here that a credit union must choose a direction best suited for it and be “purposeful” about that choice.
“It doesn’t matter which path you choose, but follow it purposefully,” said Burke. “Think it through and determine what market you are serving best, and, most important, how you are relevant to that market and how you will be relevant to that market going forward.”
Be Relevant
He said that every credit union needs to ask itself if it is relevant to its membership.
“We are pushing $400 million in assets and we discuss at planning sessions what we might think or do if we were approached to merge into another credit union,” said Burke. “And we ask ourselves if we went away would anyone care. If we ever answer no to that question, then maybe it’s time to merge. But as long as we can answer yes to that question we have reasons for being.”
Burke acknowledged to the CUTomorrow audience that merging is a topic discussed by many credit unions, but more so by smaller shops faced with growing compliance burden and rising technology costs, along with boards and CEOs who may be tiring of the fight to continue.
Looking to Stand Out
Burke said Day Air is focused on ways to differentiate from the three major banks in the Dayton area, that include Fifth Third and Chase. He said the credit union finds ways to stand out against these competitors who hold the most share in the market.
“We don’t try to differentiate against other credit unions,” said Burke. “That is not our focus.”
With the major banks as its target, Burke said Day Air does not try to build a powerful brand. He said that is a losing battle with the bank’s deep pockets.
“Fifth Third has the naming rights to the local baseball stadium. We can’t afford to do those kinds of things,” said Burke.
Instead, Day Air homes in on individual member relationships and is gaining share by winning the battle “one-on-one.”
“It’s guerrilla marketing,” said Burke, with the credit union wining over more members and gaining deeper share of wallet with through superior service, rates and care, letting the community do a lot of the marketing for the shop.
“Much of our advertising is word of mouth,” he said.
Educated Staff
Burke said staff are well educated on the CU’s mission and goals, as well as the products, services and rates of the big three banks so they can speak intelligently with members on service options and spot opportunities to give members a better deal at the credit union.
“You have to know who the market leaders are and train your staff to talk about them,” said Burke. “We talk about this all the time with our team.”
Burke also addressed the importance of board governance and how it should be structured best to serve the credit union.
“You got to get the governance right,” Burke stressed. “The board understands they have one employee to address, and it’s me. They don’t give instructions to other people inside the credit union. The board focuses on high-level strategy and where do we want to go and what do we want to be to our members. And then it’s up to me and the rest of my team to figure out how to get there. The board does not get into the weeds—and when someone on the board goes there we have a chairman who lets them know that is my sandbox.”
Burke noted that the credit union has eliminated performance reviews in favor of monthly meetings with employees and their superiors.
“We find that the monthly meetings are much better at keeping us within the rumble strips so we don’t veer off course,” said Burke. “We find those monthly meetings are much more effective than the annual year-end review.”