'Hire Sooner' Is Mantra on Effective Business Loan Launch
SEATTLE -- Though it sounded slightly self-serving coming at a marketing conference, credit unions eyeing a move into business lending were told they need to "hire sooner," get help from the core processor and make sure marketing departments are actively involved before any pre-launch.
That message, which also detailed a successful business start-up program at the $1.63 billion Bellco Credit Union of Denver, was voiced by the CU's director of marketing, Laura Higgins, at the annual Marketing Association of Credit Unions conference here.
"Use print advertising only for the first go round, avoid the big metro papers and stick to those local neighborhood weeklies to get the word out," cautioned Higgins in suggesting CUs steer clear of expensive TV or newspaper ads.
Adopting what she kiddingly called "my motherly advice," Higgins also urged CUs getting into business lending and related products to test strategies and tactics with those loyal members who are the most vocal in requesting the CU offer business accounts.
"There is pent-up demand from this group but you can learn from them," she advised.
For years, she said Bellco found those members "knocking loudly on our doors and pleading with us to offer" business services. So in embarking on business services, the CU should pursue the "low hanging fruit" as having the most initial potential.
In her remarks to a breakout session at the MAC conference, Higgins said that after little more than a year in operation, Bellco's business banking unit has already hit two new milestones, its 1,000 commercial customers and $11 million in deposits,
That kind of early success was achieved after considerable advance planning of the "business priority team" which included members of marketing but also from key functional areas in the CU.
Bellco actually "began debating whether to offer business banking six years ago," said Higgins noting she was hired by the Denver CU in November 2005 with a directive "to come up with a plan for offering business services by April."
Knowing little about CUs, Higgins, co-owner of a San Francisco marketing firm, said she was forced to learn about the industry quickly "and from the ground up." She told the MAC audience she "totally fell in love with the credit union difference."
Drawing on her own experience doing work for Microsoft's Windows software, Higgins said she is a "certified guerilla marketer" having undergone coaching by experts in the field and thus has sought to make use of that skill in handling business services.
She said the Denver market "with its boom and bust history" in energy and telecommunications is fertile ground for business loan expansion considering the city is rife with an entrepreneurial spirit plus a good labor pool
Indeed, by one survey metro Denver ranks second in new business starts per 100,000 residents, she said.
In adopting a "quiet launch" for Bellco Credit Union Business Services, the CU has relied on humor and "inexpensive but memorable marketing materials" to convey the message that its approach is practical and emphasizes relationships.
"We positioned ourselves as 'we're not like the banks," said Higgins
And that means "absolutely no advertising and no formal brochures other than for rates and fees," she said. From the start the CU relied on informal referrals, asking "who do you know," and on that score she had to teach employees soft-sell methods.
The CU did the "plain vanilla stuff you always do" including newsletter article, in-branch point of sale and a new section to the Web site.
The emphasis, she said was doing it inexpensively "because we knew things would change very quickly."
The CU used single sheet handouts "with no fancy brochures or collateral material: and found "Post it" ads effective along with huge size posters in the branches" which used large-size "while you were out, Bellco called and wanted to introduce you to business services."
Those posters caught members' attention. In addition, another in-branch point of sale titled "business services without the BS" drew notice even though a handful of older members complained about what they said was the offensive language. In the ad's small print, Bellco explains that "BS stands for Bad Service."
Higgins told the MAC audience that marketers need to hire right away for the planning function or at least the CU should "find a strong consultant for six to eight months to kick start the project."
If there were do-overs, Bellco "would get consulting from our core processor much sooner because fear of the unknown caused much unnecessary tension."
She said it is also vital that branch managers are provided with tools they need to own "awareness and visibility" in the neighborhoods with a focus on how to connect with local business owners.
Products in the Bellco mix include debit cards, business checking, money market accounts and SBA loans among others.
The Bellco marketer emphasized the need for ads geared to female business owners and the part-time mothers who operate small business from their homes. Higgins also urged branch managers get involved in local chambers of commerce, women's business groups plus home builders and realtor organizations.
Seek out those entrepreneurs, she concluded.