With increasing regulation, economic pitfalls, commoditization of financial services, and foreseeable competition from the likes of Google, Amazon, Apple, and cell phone service providers, CUSOs that continue to offer products and services in a traditional business model could become a liability to their credit union clients.

The symptoms of this potential liability include fatigue, loss of innovation and appetite for risk, blurred vision, and motion sickness. The underlying cause is the institutional status quo mindset that keeps us from moving forward faster, thinking more long term, taking calculated risks, and managing our business with measured purpose and intent.

Thank you - Drive thru

In the late 1990s, the NCUA’s Part 712 began the conversation that now allows federally chartered natural person credit unions to look at their core competencies and create opportunity for noninterest income through the development of CUSOs.

I’ve only been a CUSO CEO for a short period of time but my fresh set of eyes tells me service has been our industry mantra. Service as we have known it is dying. Why? Anyone can say it, claim it and sell it. But what is service? These days, it’s the speed at which I can get a burger and fries from the menu. I think the answer should be centered in the ability of the credit union client to determine what they want; even better, what they actually need. As an industry of CUSO service providers, maybe we need to re-develop our abilities and change our service culture to help the clients get out of the drive-thru mindset and into a more Match.com, personalized, solution-driven operation.

Skate to where the puck will be

CUSOs must get more serious about their long-range outlook for their credit union owners. Like Wayne Gretzky’s response to the question how he was able to score so often, he replied, “I don’t skate to where the puck is, but where it is going to be.”

Where will our puck be in five years? What should we have started yesterday in order to be relevant five years from now? Let’s get existential and reevaluate our reason for being?  How about beginning an industry and organizational Vision Quest says Matthew Modine – sorry those of you who weren’t around in the 1980s to get that – and discover where we really stand and where we actually need to be. Let’s do this now.

In it for the right reasons

CUSOs should be in the credit union space for the right reasons. We should be aligned with credit union principles and philosophies. But CUSOs can’t stop there. We must also provide a compelling market differentiation and value proposition for our credit union owners and their memberships. More often than not, these differentiations are product-based and have already been vetted elsewhere. These differentiations can be easily copied in the marketplace and are short range tactics rather than long range strategies.

Examine the recent election. The losing candidate appeared to have focused his value proposition based upon yesterday’s constituencies. In 1980, non-Hispanic white persons made up 91% of the electorate. In 2012, this demographic had fallen to only 72%. The country will continue to change, not just in demographic diversity, but also in values, expectations, and needs. If CUSOs cannot foresee change, we will be destined to make mistakes that will hinder our growth and the success of our industry.

I am not suggesting that a CUSO operation attempt to be all things to all people, but we must strategically evaluate our future and execute accordingly. Is it better to be an organization that delivers a list of products and services that are a mile wide but only an inch deep? Or, should it be exactly the opposite where your CUSO delivers products and services – an inch wide but a mile deep?

The first suggests a significant breadth of opportunity, but lacking in relationship and retention. The latter suggests minimal breadth, but significantly deeper relationships and retention. Can a CUSO make a go of it either way? Sure, but which do you believe has long term potential? Which can laser-focus resources and ideas to remain relevant and manage with efficiency?

Imagination

Where is my CUSO going? This question should be entertained several times a week. Also, it’s that time of year when CUSOs and their credit union stakeholders are putting together 2013 plans and setting organizational goals. I’ve seen many organizations begin by identifying expense line items from every department. Next, they set the needed goals to absorb those expenses. What’s left goes to retained earnings. I believe this is backwards.

For starters, your 2013 plan should align with your five-year business plan and long term strategic initiatives. If it doesn’t, begin the process and make 2013 year one of your five-year plan. Next, evaluate your mission, vision, value propositions; these items define why you do what you do. Ultimately, your brand evolves out of these. Understand that your organization’s brand is not just marketing, it’s operations, the people you employ, the clean parking lot and your tone of voice over the phone. Set in motion a plan to develop next-generation services, financial products, personal financial management tools, calculators, online chat tools, consumer education, financial life planning and others that fit within your CUSO brand lens view.

Think big. We have the time to move forward, but that window of time is shrinking, so we need to start today. Heraclitus (535 BC – 475 BC) was quoted as saying, “Nothing endures but change.” If we prepare for it today we will better ourselves, our credit unions and clients, and the members they serve. 

Larry Hayes is president/CEO of Beyond Marketing LLC.
Contact 281-705-4841 or [email protected]