Eric Gagliano
COLUMBUS, Ohio—How has one credit union nearly doubled its loan volume? It’s been a two-step process.
The $300-million Day Air CU in Kettering, Ohio had been a loan portfolio of approximately $60 million in 20111. By 2012, it was more than $105-million, and it has kept loan volume above $100 million every year since it hit that mark.
“I don’t think the credit union had ever exceeded more than $70 million in a year before we made the changes,” said Eric Gagliano, EVP client management at MarketMatch in Englewood, Ohio, which engineered the lending initiative.
Gagliano told attendees at the Ohio CU League’s inVest48 annual meeting here that in 2011 the CEO of Day Air, William Burke, challenged his agency and the credit union to come up with a plan that would over a one-year period take the then $250-million CU in to lending levels it had never come close to reaching.
Cultural Change Needed
“The most important change was cultural,” said Gagliano. “To make a lending gain like this, it’s never as much about the marketing as it is about the people.”
But it does take marketing, and Gagliano said that effort began with telling everyone within Day Air’s footprint that the credit union planned to step up lending in a big way, including reaching $100 million in originations.
“To tell that story we bought newspaper ads, put messages on Day Air’s website, in their newsletter. Everywhere we could we told people we were going to hit $100 million in 2012,” said Gagliano.
Gagliano compared the CU telling that story publicly to someone deciding to finally run their first marathon.
“I argue that you really don’t start training for your first marathon until you tell someone you are going to run the race. Then you are committed and you have set a goal you can’t back out of,” explained Gagliano. “So we told the word, and we were not backing out.”
Keep Staff Updated
Day Air kept progress toward the goal in front of staff, not only in regular meetings and the internal newsletter, but also via regularly updated results boards prominently displayed in branches.
“That helped keep the team behind the effort,” said Gagliano.
“Again, if you have one or two marketers, a couple lending managers and the CEO on board with this kind of effort, you may do OK. You will have a campaign,” said Gagliano. “But you will generally fall back the next year. But when you have the entire team, when you have changed the culture, the change lasts.”
Staff were trained to become better listeners and to spot life events, such as a marriage or a teen heading off to college, that would signal a member could benefit from a loan.
“It helps the staff better fit loans with members’ needs,” offered Gagliano. “Instead of talking about a laundry list of products a member might need, you emphasize the one that is important to them.”
Indirect Path
The credit union also added an indirect path to increasing loans—through checking penetration and PFI relationships. In 2012 Day Air set out to increase the number of members who had a Day Air checking account to drive more PFI relationships.
“We knew if we could increase checking penetration and become the PFI for more members, they would turn to us for more loans,” said Gagliano. “As good as your advertising may be, you can never make someone want to buy a car or a new home. But if members think of the credit union first, and we can be there when they have their need …”
Gagliano said he expects Day Air to top $100 million again this year, noting that the credit union in March had its best-ever month of originations, passing $14 million.