By Ray Birch
SOUTH BURLINGTON, Vt.—NorthCountry FCU has 65% of its members using one of its three checking accounts, and the CEO attributes the high penetration to a simple philosophy.
CEO Bob Morgan says that a checking account is only as good as the staff who sell it—and the staff can’t sell the account unless the product is so good they also use it.
Morgan said that he knew when the checking line was introduced in 2013 that it had to be far and away the best in the market for staff to be really engaged, believe in the product, and stake their reputations on it when talking to members.
“No doubt, we have the best product in the marketplace,” said Morgan. “It’s really easy to sell something when you truly have a special value proposition. Our staff has been 100% committed to informing our members about it and have been dedicated to converting consumers over to a NorthCountry checking account.”
Each of the accounts are always free. The $583-million CU offers what Morgan referred to as a “cash account” that that pays up to 2% interest on the first $10,000. It also offers a cash-back account—which Morgan said is easily the CU’s most profitable of the three—that delivers 3% cash back on first $200 of debit transactions. For younger members, NorthCountry has an account that provides credits for iTunes and Amazon.
Rewards Rules
To get rewards in all three products, members must enroll in e-statements and access their account electronically at least once a month. They also must perform 15 debit transactions a month, and can link a NorthCountry credit card to the account to have those swipes count toward the monthly total, as well. If those requirements are met, NorthCountry also rebates up to $20 in foreign ATM fees.
“We have seen the average number of monthly debit transactions per account rise into the 20s,” said Morgan. “That is a very high number. Each account holder also averages two to three overdrafts a year, and we charge a market-low price of $25. While an overdraft is unfortunate, if my members are going to overdraft, I’d rather them do that at NorthCountry, because it costs them less.”
Bob Morgan
Overall, the checking line this past year refunded $830,000 to members in cash back and ATM fee rebates. Morgan said each account generates an average of $178 in bottom-line profitability.
Morgan emphasized how the checking line’s pricing makes staff want to sell the products. He noted that each employee has a NorthCountry checking account.
“The sales contests, the sales training, all of that is important. But those things won’t matter a bit if your staff does not truly think a NorthCountry checking account is in the best interests of the members,” emphasized Morgan. “If we had a checking line that was average and members could get the same thing somewhere else, staff would not stake their own reputations and relationships on promoting the product. When you have a product you know is beneficial for someone and superior to anything in the marketplace, you feel great when you sell it.”
First Step
The checking relationship is the first big step toward becoming a member’s primary financial institution, noted Morgan. But what is equally critical, he said, is maintaining control of the memberships’ payments.
“We wanted to make the account very attractive to keep control of the payments space with our members—capture the interchange income,” Morgan said. “Payments are largely associated with members who have affinity with you and that will drive profitability into the future.”
Outside of staff heavily promoting checking, NorthCountry also uses a combination of traditional advertising, social media, and “guerilla marketing,” Morgan explained. The credit union likes to get out into the community and hold unique events to promote the CU and its checking line. It has given away free gas, with Morgan operating the pumps, shown up at ice cream shops to hand out free cones, and visited local universities and schools.
“This checking account has been a great source of member growth for us as well,” said Morgan. “We have averaged more than 5% membership growth over the last five years. It’s a wonderful product.”