Tax increases? No.

Spending cuts? No.

Vote for the incumbent? No.

Trust our leadership? No.

Merge my credit union? No!

We see it everywhere, don’t we? No, no, no. But when it comes to getting approval for a merger, we need yes, yes, yes.

So, how do we do that? Obviously, it’s not easy or there wouldn’t be as many contentious merger votes as we’ve seen. Here are some thoughts based on first hand observations and many, many years of trying to convince people to agree to something – I’m a consultant, after all – which we can apply to merger situations.

Overwhelmingly, people will agree to something when they realize there is something in it for them. They don’t care what’s in it for the credit union or the person who’s selling them this bill of goods; they care what’s in it for them. People buy financial services for three basic reasons: to make money through higher interest rates on deposits, save money from lower rates on their loans or lower fees and saving time through convenience at more ATMs and better branch locations. So, will your merger make them money, save them money or save them time? How? And if not, frankly, why are we merging?

Is it possible that a merger will be good for the credit union and not for the members? Clearly some members think so or they wouldn’t vote no. Boards and management very clearly think about the efficiency ratios and capital ratios of the combined companies or about the increased cost of the regulatory that is only getting worse. And they should. Does the average member care or can determine how all of this will benefit them? Maybe there will be operating efficiencies. But back to point one. How do those help your members make money, save money, save time?

If it’s good for management, it can’t possibly be good for the members. That’s a common thread with the ‘no’ votes. Those of us who work inside the industry know that credit union CEOs aren’t the highest paid and have worked hard to do what’s right for their membership. And, board members aren’t highly compensated either. Now they’ve decided it’s in the best interest of the membership to hand the keys to that other credit union. What’s in it for them? There’s got to be something in it for them, right? We members are sure there’s some unjust enrichment going on – there has to be. That CEO is getting a five-year contract to consult. So, this can’t be good for me, can it; just good for them.

What about my favorite teller? Will he still be there? He doesn’t seem too excited about the prospects and he’s not sure if he’ll have a job when it’s all over.

Finally, members didn’t ask for this. They were perfectly happy with their credit union in the first place.

So, how can we do this more effectively? Obviously, there is no foolproof way. Some people are going to vote no, just because they can. The main question shouldn’t be how do we minimize the number of no votes, but how do we maximize the number of yes votes.

First, we’d better be sure that when we wade through all those wonky reasons for merging, that’s they’re a good deal for our members. If not, why are we doing it?

Second, we might as well assume some people are going to be unhappy. They might set up a website or picket. Let’s assume someone will have a lot of time on their hands and will cast a strong voice against the merger. What are the objections they will raise and what are our answers? Sure, those answers sound good to us, (see better efficiency ratio) but will the members get that? What’s in it for them?

Third, let’s assume that the CEO contract is going to be an issue. Making $100,000 a year is not unreasonable by any stretch of the imagination either for the CEO or the acquiring company. How are we going to explain that?

Fourth, let’s recognize that our employees are going to be scared. But we need them to help us convey a strong message to our members that this is a good thing. Let’s focus on the message to them.

It’s about getting the word out in a way that everyone understands, isn’t it? What’s in it for them in a way they can understand? For our members, will it be better rates, better fees, or more convenience? For our employees, will they have more opportunities to grow in their careers, or at a minimum, will they still have a job?

It’s all about communicating in a way that will help us maximize the number of yes votes. Sure, we’re going to have some people who will object because some people object to everything. But we’d better be able to have a message that will get most of them to agree. They have to be motivated enough to come to the meeting or send in that ballot.

Your marketing department may be able to craft the message, or you may need to hire outside help. There are lots of competent companies to help. Communicating the benefits will be difficult and expensive, but not as much as communicating the alternative.

Denny Graham is president/CEO of FI Strategies LLC.

314-409-4798 or dgraham@fi-strategies.com

Instant Insights /

Get Members to Say &lsquo;Yes&rsquo; in a &lsquo;No&rsquo; Culture

Related Stories

Recommended For You

Get Members to Say ‘Yes’ in a ‘No’ Culture