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There are many words used to describe credit unions, but none quite as descriptive as “cheap and sheep,” a behind-the-scenes favorite whispered by credit union vendors behind closed doors. CU vendors expect customers and potential customers to drive a hard bargain. It is normal procedure for those on the buying end to both push for the best deal and consult reliable references. But according to many vendors, credit unions all too often carry it to extremes, and to put it mildly, frequently look down their noses at those attempting to make a sale to a CU. As one well-known national data processor put it, “credit unions expect a fair price for their product. Rightly so. But so do we. If credit unions gave the store away with unrealistic savings and loan rates, they would soon be out of business. Same holds true for our firm. Yet, typically, they try and nickel and dime us to death, often comparing us to a product with far fewer enhancements.” It’s a known fact among credit union vendors that it’s tough making a solid bottom line selling to credit unions, especially for those vendors who deal with credit unions exclusively or almost so. One example of many: credit unions have a reputation for not being able to make decisions. Or taking forever to do so. Or getting too many people involved in the process. Often times it’s because some CEOs feel the need to take everything to their boards even though they only meet monthly thereby delaying any decisive action automatically. In some cases, boards demand to make the final decision, but not until vendors dot every “I” and cross every “T” to their satisfaction, not management’s. Vendors dread time-wasting board presentations. Sometimes they must make several of them even for the purchase of small ticket items, a decision that should be made at the staff level. They have little choice but to make them if they want the sale. And make them. And then make them again. Vendors don’t lay the blame for the snail-like decision making process entirely at the feet of boards. In some cases the credit union’s management staff was over its head in trying to communicate exactly what the credit union needs, especially with high tech vendors. Or they decided to throw their weight around making unreasonable demands on vendors hungry for new business. Every year new vendors, some of them with an established national reputation, discover the credit union market and decide to test the waters. They do all the right things to get noticed. They buy trade publication advertising. They conduct direct mail campaigns. They take a booth in the expo program at the major state and national credit union conventions. They make individual cross country sales calls. Some even seek trade group endorsements. Even when they have good products, offered at a fair price, the credit union way of making buying decisions, and the cheap and sheep factor, eventually wears them down. Within a year or two, they throw in the towel. If vendors could be perfectly honest with their customers and potential customers, they might come up with the ten commandments of good credit union/vendor relationships. Like these: 1.)

Peter Westerman

Credit Union Times

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