MARSHALL, Mich.—The CEO of one very successful credit union says she’s never comfortable on the job—and likes it that way. And part of that has meant confronting some data that challenged thinking with which it was comfortable.
Heather Luciani, CEO of the $214-million Marshall Community Credit Union here, told CUToday.info credit union leaders can’t afford to get comfortable because there’s too much competition today.
“The competition is fierce from mainstream financial institutions and non-traditional financial services. We all know that and it’s just going to get tougher,” said Luciani. “Consumers today have more and more financial services choices, so we have to start thinking that way. We have to always be looking for ways to improve and be more efficient and look at opportunities.”
Since coming on board in 2010, Luciani has been on the edge of her seat—taking the CU from 0.28% ROA to 1.19% today, and raising net worth to 16.72% from 10.5%. Marshall Community has averaged more than $2.3 million annually in net income over the last five years, and won a Raddon Crystal Performance Award last year.
“You have to look at yourself as a retailer,” Luciani contended. “You have to have a sales culture that’s equal to your service culture. I think that’s a big change for some credit unions.”
Luciani suggested many credit unions don’t like to use the word sales, and instead “create other words for it.” But she contends a sales culture is what’s needed today, as long as the culture’s primary philosophy is that whatever the credit union is selling is always in members’ best interests.
When Luciani took over as CEO, she had to make big changes within Marshall Community.
“We didn’t really talk about sales here before I became CEO,” she explained. “So we spent a lot of time on that, changing our culture.”
The Initial Focus
To instill a sales culture within the organization, the credit union first focused on transparency and accountability, Luciano said.
“Before the change, when it came to goals at the credit union, we had overall goals but our employees did not know how they fit into those goals, and how they impacted those goals,” Luciano said, noting that if staff were going to focus on sales they had to understand how those sales clearly made difference and how their daily roles drove the organization’s success. “We changed that. We established our overall goals for the year and then we stripped them down—CU goals, management goals, department goals and staff goals. And then we added metrics.”
At the same time Marshall Community CU began relying more heavily on data analytics to not only measure results but also to direct its strategy.
“We began using the CEO Strategies data analytics platform from Raddon,” she said.
In using the data, Luciani hoped the credit union would chart a clear path to success.
“Before we thought we knew what we were doing. We thought we knew what to focus on. We thought we knew how well we were doing and why,” Luciani said.
No More Gut Feeling
But what the data platform made clear was what it thought wasn’t always correct, and instead showed where it could improve and ought to be focused.
“Prior to that we just went with our gut feeling,” she said. “I think many credit unions do that. And while doing some of that can be OK, it really can be misleading for the credit union.”
Luciani emphasized data must be used to validate what the credit union is doing.
“Data identifies things you don't think of,” she explained. “You can come up with a program, a solution, or an idea, and think that you are doing something when the data will tell you that in fact what you think is happening is not. You need to use data to make decisions all the way up to the board level and all the way down to regular staff level. Use data to really look for opportunities and track progress. That’s what we do. We don’t go by feel anymore. It’s all about the data.”
A key point the data told Marshall Community—focus on the checking account.
“The key to the partnership with the member is the checking account,” Luciani said. “So you have to focus on how you get that day-to-day money movement.”
‘Way Off’
Prior to leveraging data, the credit union’s “gut feeling” was it was doing well with checking.
“But when we finally ran the numbers, our member checking penetration was in the 30% range,” said Luciani. “That’s incredibly low. So, our gut feeling was way off. You have to get past the perception you may have about things, about what you think you see every day from your members. These are emotional perceptions.”
With a focus on checking in the last 10 years, the credit union is now approaching 70% member penetration with the product.
Leveraging data is not a concept new to credit unions, acknowledged Luciani, who believes many credit unions still like to fly by the seat of their pants.
“Data will show you where you need to go, where your cross selling opportunities are, and so much more,” she said. “And there is so much of it available, which I admit can be intimidating. But you don’t eat an elephant in one bite, you do it one bite at a time. That’s how we got all this started.”