FORT WORTH, Texas–The adage about a bird in the hand being worth two in the bush has never been truer than when it comes to growing share of wallet with existing members, according to one person who has helped CUs earn more business from the members they already have.
While credit unions continue to add a significant number of new members each month and now boast more than one-third of the U.S. population, actual wallet share hasn’t changed much in recent years. Sundeep Kapur, who leads Digital Credence, Inc., told the Cornerstone Credit Union League meeting here that much of that is credit unions’ own fault.
Kapur shared the story of setting up a bird feeder at his own home only to be disappointed that no birds visited it.
“I took feed in my hand and threw it toward the birds, and still no birds. I called the company, and they asked how long have you had the bird feeders. I said two weeks. They told me the worst thing you can do is tell the bird, ‘Like me, like me, like me,’ said Kapur. “The reason I now have more than 32 feeding stations at my home is I am not the one telling birds to come. It is the birds telling other birds. It’s all about finding other consumers.”
But even birds in the form of members who show up at the credit union birdfeeder/branch are often not given any food, according to Kapur. He shared his own story of relocating to a new state, and making very clear to his new credit union in Utah that he was new to the city, had two kids, was looking to buy a home, had a family that was digitally enabled, as well as other attributes that made him a prime multi-product/service prospect, and the response was underwhelming, at best.
“I have given you 12-15 selling opportunities,” he related. “I asked, ‘How can your credit union help me?’ And the first thing I was told was, ‘We are going to have to run your credit.’ Or we tell new members, ‘I can set you up with a share account, but for the other products you can meet with someone else.”
Kapur, who is not a fan of most secret shopper or mystery shopper programs, said too many front-line employees don’t listen because they are following scripts.
“You need to be testing your branch people and allow them to learn to listen,” he recommended. “This is our first date. This is where you are going to get 60% to 70% of the products you are going to sell. My goal is to get at least three products with you. This is about listening, interacting and proposing.”
He asked credit unions how well they do in training employees to overcome objections, and whether they have written out scripts on how to overcome specific objections. “I typically like to have a meeting with branch people at end of day and ask what do you think held you back?” he said
Effective Onboarding
When it comes to onboarding new members, Kapur said he likes a three-step process:
1. A follow-up note saying, “Thank you so much for becoming a member and here is my important contact information.”
2. A second message that includes three relevant testimonials from other members. “I learn a few things about you—and if my marketing automation is good enough, I say ‘Send these three stories’ of services we have done, so they feel they are in good company’,” said Kapur.
3. A message that says “Talk to us. Tell us your preferences. Give us our feedback, join our community.”
“So now I have made contact with almost 100% of the people I serve digitally. I am doing this over five days,” said Kapur.
Saying that onboarding of members who come via the indirect channel is “vital” and that these members are more than just a loan, Kapur said that when he works with credit unions, out of every 100 members who join via indirect he likes to identify at least 50 to be targeted with a credit card offer. On average, he said, 23 of those people take the card.
“We explain the benefits of our credit card, such as a grace period or skip-a-payment. I set an expectation that someone from my team will be in touch with you in next few days to talk to you about how to set things up. The next thing is I pick up the phone and I call you, and I say, ‘Our underwriters when approving you for a car loan also approved you for the credit card.’ If you tell me you pay off your balance each month, I tell you about our rewards program. If you tell me about your balance, I tell you about our 0% balance transfer program. And if you are still objecting, I tell them I am local and in your state and here’s how to contact us if you change your mind. Then I follow up and ask if our rep met their needs.”
Kapur shared an example of a New Jersey credit union that also reaches out to new members several ways, such as:
- Asking if the member has an emergency fund? They tell the member, “Typically, it takes nine months to get out of an emergency: How will you get out of an emergency? (The credit union is) not asking for anything; they’re asking how to help.”
- Congratulating the member on a new home, and then talking to them about furniture and appliances and whether the loan should be larger for other purchases.
- Preparing for 60 minutes before meeting the member. “If you do the research upfront, I want you to do an assumptive close. Those who do the research are scoring 80% success.”
- Active listening.
The Financial Check-up
Another way of getting more business from current members is to conduct a financial check-up twice a year, Kapur said.
“I review your credit report, explain what needs to be done, and help you to execute on it,” he said. “So, we know that report upfront, and we give the member a highlighter to make notes. This takes their phone out of the picture. I am dumbing it down, but not calling them dumb, so they know how to read the financial report.”
Kapur said one upstate New York credit union did 63 financial check-ups, and out of that 49 resulted in product sales. “And nobody walked away saying ‘That was stupid’,” Kapur said.
He said little things, such as confirming transactions, helping to resolve problems, inviting members to events, and celebrating their anniversaries as CU members can go a long way toward earning more wallet share.
All of that, he noted, requires having the data and acting on it.
“Data is where the magic is in terms of what is going on,” said Kapur. “But what is the difference between big data, analytics, reporting, decision science, AI? Doesn’t it sound the same? This has become such a defined field that this is where fintech is leading. Fintech says, ‘I know exactly who I want’.”
Using that data makes for relevant, timely, purposeful messaging,” said Kapur. “It allows for cross-sells and upsells. There is first party data and third party data. You have first party data, why are you buying it from third parties? Hats off to First Tech Credit Union; they turned to their analysts, who were previously called report writers, and in year one they were able to drive 14% upsells to their members. In year two, 37% upsells using first party data. And their goal for this year is 51%. I could not do this without having the data that I have.”
Kapur said if there is one “major thing” credit unions must do properly it is to define payments as a way to lead the relationship. He urged looking for simple metrics, such as how often the credit union’s card is being used.
Transforming the Branch
Kapur said at many credit unions their branches need a complete rethinking. He urged his audience to return home and to do a “branch audit.”
Members who visit branches, he said, are on one of three journeys: transactional, service, or advisory. The first two, he said, are largely predictable behavior. It’s in the third journey that value is created, and the branch must support that.
“If you do a proper branch transformation, you need to look at the journeys,” he said. “There are five key elements: data, journey, zones, technology, and training.”
Every branch, he said, should have a “decompression zone” when members first enter.
“Branch transformation is based on the kitchen triangle. If the refrigerator, the stove and the sink are in a straight line, that’s not good. Think of branch that way. You need to get ready for retailing, ready to influence members’ behavior.”
Chief Digital Officers
Kapur noted that 63% of consumers use online banking, 35% use mobile banking, but 87% of consumers can use online and mobile. For that reason, he said, every CU should have a chief digital officer in place to oversee the digital journey.
“Provide intuitive consumer experiences, responsive design, personalized relevance, blended automation, rich reporting, ease of administration, secure authentication, secure transaction, and backend efficiencies,” he said. “These are your goals if you were running a digital branch transformation project. You need to be thinking about creating a CDO position to serve members when your other branches are closed.”
The “Success Mantra”
The three pieces of any credit union’s “success mantra,” according to Kapur, are:
- Shame on me if the member didn’t know that the credit union offers a service. Marketing is about education.
- The answer is yes. What is the member’s question? What do they need? Have I lowered the level of anxiety?
- There must be a 100% focus on the consumer. The biggest mistake is not paying attention.
Kapur asked credit unions what they are doing to raise the competence of their employees. “They need to be able to do financial check-ups for members. Our employees need to know where the stock market closed. We are not Walmart cashiers.”
Speaking to the theme of his remarks, he reminded, “Take care of the bird in hand. Keep it relevant, keep members engaged, and you will nurture your way to be the PFI.”