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 togetting approval for a merger, we need yes, yes, yes.

So, how do we do that? Obviously, it’s not easy or therewouldn’t be as many contentious merger votes as we’ve seen. Hereare some thoughts based on first hand observations and many, manyyears of trying to convince people to agree to something – I’m aconsultant, after all – which we can apply to mergersituations.

Overwhelmingly, people will agree to something when they realizethere is something in it for them. They don’t care what’s in it forthe credit union or the person who’s selling them this bill ofgoods; they care what’s in it for them. People buy financialservices for three basic reasons: to make money through higherinterest rates on deposits, save money from lower rates on theirloans or lower fees and saving time through convenience at moreATMs and better branch locations. So, will your merger make themmoney, 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 unionand not for the members? Clearly some members think so or theywouldn’t vote no. Boards and management very clearly think aboutthe efficiency ratios and capital ratios of the combined companiesor about the increased cost of the regulatory that is only gettingworse. And they should. Does the average member care or candetermine how all of this will benefit them? Maybe there will beoperating efficiencies. But back to point one. How do those helpyour members make money, save money, save time?

If it’s good for management, it can’t possibly be good for themembers. That’s a common thread with the ‘no’ votes. Those of uswho work inside the industry know that credit union CEOs aren’t thehighest paid and have worked hard to do what’s right for theirmembership. And, board members aren’t highly compensated either.Now they’ve decided it’s in the best interest of the membership tohand 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 aresure there’s some unjust enrichment going on – there has to be.That CEO is getting a five-year contract to consult. So, thiscan’t be good for me, can it; just good for them.

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

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

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

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

Second, we might as well assume some people are going to beunhappy. They might set up a website or picket. Let’s assumesomeone will have a lot of time on their hands and will cast astrong voice against the merger. What are the objections they willraise and what are our answers? Sure, those answers sound good tous, (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 anissue. Making $100,000 a year is not unreasonable by anystretch of the imagination either for the CEO or the acquiringcompany. How are we going to explain that?

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

It’s about getting the word out in a way that everyoneunderstands, isn’t it? What’s in it for them in a way they canunderstand? For our members, will it be better rates, betterfees, or more convenience? For our employees, will they have moreopportunities to grow in their careers, or at a minimum, will theystill have a job?

It’s all about communicating in a way that will help us maximizethe number of yes votes. Sure, we’re going to have some people whowill object because some people object to everything. But we’dbetter be able to have a message that will get most of them toagree. They have to be motivated enough to come to the meeting orsend in that ballot.

Your marketing department may be able to craft the message, oryou may need to hire outside help. There are lots of competentcompanies to help. Communicating the benefits will be difficult andexpensive, but not as much as communicating the alternative.

Denny Graham is president/CEO of FI Strategies LLC.

314-409-4798 or [email protected]