Auto Service CUSO Restructures to Cope With Economic Downturn
The CUSO has had to conduct some internal restructuring in order to cope with the effect the economy has had on auto sales.
"Due to the slow down and contraction, we've had to lay people off to bring down cost to make up for loss of revenues," said Auto Expert President Chris Andrus. "We're doing more with less."
Auto Expert is a subsidiary of Riverside, Calif.-based Altura Credit Union. The CUSO offers auto-locating services to 20 credit unions.
Auto Experts' credit union partners refer members looking for a car to the CUSO and Auto Expert then finds the exact car the member is looking for and schedules the delivery of the car. The service eliminates the process of the member having to deal with a dealership and car salesman.
The second half of 2008 was particularly tough on Auto Expert with the economy continuing to slide and the troubles of General Motors, Chrysler and Ford becoming prominent.
"The overall economy has had a psychological impact on people, which is causing them to sit on the sidelines right now and hold on to a car they might have otherwise turned in for a new car," Andrus said. "The loss of jobs has caused credit scores to go down while at the same time standards for a loan are being raised so some people who want to get a loan can't."
Maintaining high services and strong relationships with its credit union partners is a major priority right now for Auto Expert, according to Andrus.
"The majority of our referrals come from credit union employees, so we want to continue to build focus there and work with loan officers to provide education and incentives."
Auto Expert has had 11 new credit union partners come on board in the past two years and had two new partners, El Monte, Calif.-based SCE Federal Credit Union and Chatsworth, Calif.-based Matadors Community Credit Union, join last month.
SCE FCU has more than 41,500 members, assets of $413 million, serves employees of Southern California Edison and expanded its membership in 1998 to include other business and underserved communities in Southern California. Matadors CCU has more than 13,000 members, assets of $122 million and serves Cal State University students, alumni, athletic boosters, faculty, staff and anyone who lives works or worships in certain Southern California communities.
When developing a program for its credit union partners Auto Expert works with the credit union to create a name for the program so the credit union can market it and members are familiar with it by name.
"At SCE FCU our private label for this auto buying service is called 'CU at the Wheel.' It offers our members the convenience and peace of mind they can only get from their credit union. A member in the market for new vehicle just has to pick up the phone or stop by one of our branches, and our team of Auto Expert vehicle advisers will do the rest. After negotiating the best possible price, they will deliver the vehicle to the member at a branch or their home or office. And members already know our rates are hard to beat and our service is our passion."
For Matadors CCU Vice President of Marketing Marnie Nemcoff said that Auto Experts emphasis on member service and being a quality organization were the key factors the credit union looked at when making the decision to partner with them.
Andrus said that he expects they will have more credit union partner's sign on this year, but in the current climate it's hard to say and that's why strengthening the relationships they have with current partners is so important.
Auto Expert advisers attend SEG events with the credit union's marketing department. They also attend branch meetings and new employee trainings. The CUSO will donate prizes and participate in raffles a credit union may have to continue to build that relationship.
"We want to be a part of the credit union culture and we want to earn the referrals we get," Andrus said.
With the staff layoffs, Andrus said that another key part to the CUSOs plan this year is to make sure that the staff is in-line with the number of members they have coming in and that advisers are not overwhelmed so they can still offer a high level of member service.
"We need to stay lean in order to be strong for when things do turn around so we need to hone in and focus on what we do well."
Andrus said that the CUSO has a 98% member satisfaction rate and that its net promoter score is 97%. The net promote score gages what members that use Auto Expert's services will recommend it to a friend. Andrus also said that 92% of its services result in a credit union loan.