ATLANTIC CITY, N.J. — Following a sales-service philosophy is becoming increasingly important to implementing new revenue strategies for credit unions, Jeff Rendel, president of Rising Above Enterprises, advised attendees of the New Jersey Credit Union League’s Annual Conference last week.
Implementing a structure that aids both the member and the credit union is key. For example, when a member signs up for a transaction account, get an instantly issued debit card in their hand, Rendel said. He added that offering mobile banking and bill pay will assist in keeping members stuck on the credit union.
“The easier we make it for members to go through the hoops and the more meticulous we are, the more you grow your revenue stream,” Rendel stated. He later explained that the Customer Effort Score, which determines how easy it is to do business with you, is the highest predictor of member satisfaction. It’s even more predictive, he advocated, than the net promoter score, which measures how likely a member is to recommend your credit union to friends and family.
Using a tool such as Salesforce can help loan officers track where members are in their loan decision-making process. When a credit union member expresses interest in a loan, there’s an estimated 30% chance of closing the loan. If they move onto the pending approved status, the chances of closing that loan jump up to 50%. After the credit union approves the loan, the chances are even greater at 70%, and you don’t want to let these applicants slip through your hands.
Finally, when the loan is completed and you just need them to sign on the dotted line, you’ve got a 90% chance of closing the loan. Consultative selling by trained professionals is a crucial piece of this. Rendel recommended at this stage, “Go to them. Just go to them.” Particularly with a small business it’s helpful to the member to go to their location or even a member’s home if they want.
Another idea is to look for loans your members have with other institutions and offer them a better rate. It’s crucial, Rendel said, to manage the flow of opportunities with skilled employees.
But, Rendel offered, “There are some members who are just not behaving the way you want.” Some credit unions are experimenting with charging a small fee for members who just park $50 in a savings account. He shared that one credit union was charging a $5 “de-marketing” fee, which was what they called it in-house. Sometimes the member will understand and increase business with you to avoid the fee.
Rendel cited the Pareto Principle that 20% of your members provide 80% of the credit unions income. Focus on those who give you the most, he emphasized.