MADISON, Wis. — In February, CUNA Mutual Group completed the transitioning of credit unions from its old sales and distribution model to a new model. The transformation is part of CUNA Mutual President and CEO Jeff Post's four-pronged approach to improve the company's efficiency and responsiveness to credit unions and their members.

At Texas Credit Union League's Annual Meeting, Credit Union Times conducted an exclusive interview with Post, CUNA Mutual Vice President of Sales David Sweitzer and Vice President of PR and Communications Jim Buchheim to find out exactly what changes have been made so far to the sales and distribution model, particularly as they relate to small credit unions.

Prior to Post's arrival at CUNA Mutual in September 2005, credit unions had several common complaints about the company: they perceived CUNA Mutual to have a one-size-fits-all product mix and felt the company lacked a clear, reliable, single point of contact for sales. Product implementation and follow-through were inconsistent, and too often CUNA Mutual didn't thoroughly understand credit unions' business needs and objectives.

In 2006, as part of the company's three-year transformation effort, CUNA Mutual launched an initiative to optimize its distribution experience. Based on feedback from 100 credit unions and all employees, the distribution experience CUNA Mutual now seeks to create includes:

oSimplified access–a single point of contact for ALL credit unions with enhanced remote communication capabilities;

oMore decisions made at the point of customer contact;

oSpecialized “best of class” industry expertise; and

oConsistent and reliable post-sale implementation and service.

What has changed? CUNA Mutual's entire business-to-business sales model was overhauled, including structure, roles, processes, and technology, built to credit union specifications.

“Credit unions told us they expect proactive sales representatives, faster, more efficient response times, and easy access to industry expertise,” said Post.

The company started restructuring by consolidating its number of call centers from 38 to three, a move that offers not only economy of scale but also faster, more consistent customer communication because of the closer proximity of employees.

Eighty employees have been tasked with focusing exclusively on the challenges of small to mid-size credit unions. What does CMG consider a “small” credit union?

“We've given a lot of thought to that,” Sweitzer said, “and the answer is any credit union that is resource challenged.” The Select

CUNA Mutual identifies these small to mid-size credit unions as their “Select” segment, a group encompassing approximately 6,500 of the 8,000 credit unions served by the company. Larger credit unions are assigned to CUNA Mutual's Regional and National Accounts segments.

“Accounts previously were organized on a purely geographic basis. Now representatives serve credit unions of similar size with similar problems,” Sweitzer said. “What was happening was a representative was calling on a $50 million credit union in the morning and a $500 million credit union in the afternoon. Their needs are very different. And small credit unions don't have time to meet face-to-face with our representatives. We now assist them primarily through a virtual model, which delivers greater speed and efficiency.”

Under the previous model, Post said 70% of a sales representative's role was spent literally on the road. With that much travel, representatives were only able to visit small credit unions about once a year, and not necessarily on a schedule that was convenient for the credit union. The virtual model, which uses an Internet-based phone system, allows representatives to spend time more productively, addressing needs and positioning products and services. “We're exchanging windshield time for credit union customer service time,” he said.

Each credit union now has a single point of contact ultimately responsible for ensuring a credit union gets the assistance it needs. “Callers get a live body right away,” Sweitzer said. “CMG representatives have an online manual at their fingertips–with access to 10-plus operational systems, the Internet and the Intranet. Representatives can provide immediate answers to questions or pull someone else into the conversation to help solve a problem.”

Most sales executives have 30% fewer accounts now than under the old model. CUNA Mutual also has added 12 account consultants for the Select segment to handle service-related calls.

The company has placed great emphasis on building a sales force that has the skills and experience to answer credit union questions. In addition to individuals with “significant CUNA Mutual experience,” many representatives are certified public accountants or carry MBA degrees. Possibly the most welcomed change has been the addition of former credit union CEOs to CMG's sales executive roster.

“Credit unions appreciate talking to someone who understands their business,” Post said.

Technology is also helping CUNA Mutual improve the quality of interactions with customers. Their new voice-over IP system facilitates coaching and development of sales staff. Representatives are evaluated and incentivized based on 36 customer service metrics. Phone calls can be replayed to target improvement opportunities. The system also incorporates state-of-the-art voice analytics that warn representatives when frustration begins creeping into a customer's voice.

Sweitzer and Post acknowledge that the company has not yet reached their targeted efficiency. At one-third of the way through the three-year transformation effort, Post said “pit stop surveys” indicate customers believe the organization is about 30% down the road in achieving its improvement goals. “That's about where we should be,” he said. “Interestingly, our employees said the same thing. Their assessment was completely in step with our customers. If our employees believed we were closer to reaching our goal than our customers did, we would be in trouble.” Buchheim said the process is analogous to eating an elephant. “How do you eat an elephant? One bite at a time. In our old model where we only talked to some Select segment credit unions once or twice a year, we would run the risk of either leaving things off the table or trying to do too much.

“Now, we have units dedicated to each segment, we have more staff focused on our Select credit union segment, and by replacing windshield time with credit union time, we have more people with more time proactively communicating with credit unions, responding to credit union questions or issues, and delivering the information and tools credit unions need to make decisions about CUNA Mutual products.”

With more than 25% of CUNA Mutual's overall revenue coming from the Select segment, officials say they are committed to small credit unions. They believe improved service, execution, and implementation will not only help them retain business, but also provide growth opportunities. –jfwrite@aol.com

Instant Insights /

A Look at Small Credit Unions and CUNA Mutual's New Sales and Distribution Model

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