As the temperatures across much of America rise to spring-like highs, many people turn their thoughts to planting and weeding their vegetable patch and cleaning and airing out their homes after a secluded winter. Now is a great time for credit unions to dust the cobwebs out of their shops, too.
Credit unions already have to perform due diligence on their vendors to ensure they're complying with regulations. It's also a good time to review and compare vendor offerings. Is a current vendor providing the value you expect? Would you be better off switching?
Credit unions can also look at whether a product is performing as it should? A branch may not turned out to be all you hoped for or administering a particular product may have become more of a burden than its value to the credit union and thus the members. Obviously, credit union executives must keep in mind their not-for-profit roots while assessing what's best for the credit union overall and the entire membership.
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Are some things better brought in-house? Marketing strategy and public relations are two that come to mind for me. No one knows how to represent your business like your own people do. Gather your marketing vision internally and outsource the art and distribution. In public relations, always have a knowledgeable spokesperson available to speak on certain topics. If reporters call a third-party PR firm, and it can't them in touch with someone at the credit union, they're likely not going to make the effort again, whereas a spokesperson at your credit union may not be the first choice for the reporter, it's better than nothing.
Should other items be farmed out for cost and efficiency's sake? Something like business lending might be more economical for the credit union given the necessary relevant expertise if outsourced–as long as the due diligence on the company is sound and the credit union retains the final say.
Some credit unions are working their existing memberships for growth, and it's a great strategy. It's less expensive than adding new members and strengthening ties with direct deposit and bill pay will discourage a member exit. According to a webinar by Callahan & Associates, it costs six to seven times more to acquire a new member than to retain an existing one.
At the same time, deepening existing relationships doesn't bring in new and younger members, other than possibly by word of mouth. Credit unions' average member age is nearing 50. This trend cannot lead to a sustainable business in the long term. In the nearer term, all those baby boomers are going to shift away from borrowing and spend down their retirement savings. What then?
Credit Union Times is offering premium content on growth opportunities to our digital magazine subscribers in the March 30 issue. We're digging into everything from shared branching to investments to free checking to grow revenues, profit (yes, profit!) and membership to provide you with interesting and actionable material.
So what seeds will your credit union sow this spring 2011?
All things retirement are a perfectly good example of a new revenue source. Marketing of these products is typically targeting the boomers. The problem with the boomers is it doesn't help sustain your credit union long term. But catch a 25-year-olds just starting their careers and treat them right, you could have a keeper for life.
Or grab the attention of 35-year-olds approaching the prime of their careers and borrowing years, possibly with a couple of kids, and your credit union could walk away with retirement funds and college savings accounts. Then you're building the relationships that can grow over time into first car loans and student loans.
Our digital-only supplements have gained steam since we launched them in late 2009. Following the successful launch of the new cutimes.com, we're continuing along that path of deepening and growing readership. We've launched The CUTting Edge eNewsletter this year to target our credit union technologist readers out there.
We realize that, despite a nationwide and even global readership, the credit union community is just that: a community. Credit union executives want to hear from their colleagues about what's working for them and how it can be replicated. They want to find out how others are saving money in certain areas or growing revenue with particular products that might be appropriate for their own membership.
That's why we've started a new feature in Credit Union Times called "Vox Populi" (see page 8), providing verbatim information and advice from a wide variety of your peers. Look for the next installment in the April 27 edition. To suggest a question, e-mail Managing Editor Donald Shoultz at [email protected]
Also coming soon will be a Credit Union Times recognition program: Trailblazers, 40 Below. Building on the momentum from our recently concluded Trailblazers program, we're looking to recognize credit union industry figures under 40 who are burning the midnight oil, doing cool things to make a difference in credit unions. Stay tuned for details as we move forward with this exciting program. Credit Union Times wouldn't be comfortable talking the talk if we didn't walk the walk toward bolstering the future of credit unions.
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