JMFA: The keys to account growth
No matter how you look at it, Credit Unions need to continue to bring in new business from their members. Financial institutions are in business to serve its current members, but must also continue to grow. Credit unions have ample opportunity for growth from their current members. Here are a couple of strategies to consider:
Target the transition market. Of all account holders, 15 percent leave their financial institution every year and are in transition according to a Wall Street Journal article*. Because of this it is suggested that your new members be targeted up to eight times per year with effective, consistent marketing. The more services your members use the harder it is for competitors to get your members to switch their accounts.
Marketing is something that must be done, in some form or another, to communicate with members and potential members. Marketing creates awareness and establishes your credit union’s identity. Here are a few marketing ideas to consider:
Networking – Depending on the goals of your financial institution, this can be a critical element. If the goal is to gain more home loans, a key staff person should be attending the local realtor and homebuilder associations’ meetings. It would even be beneficial to call nearby real estate offices to set up one-on-one meetings. Real estate agents need to be aware of your credit union’s rates and how you can help their clients fulfill their dreams of owning a home.
Lobby – Lobbies, what a great marketing tool! Having an updated lobby that’s clean and bright does wonders for the image of a credit union. First impressions last a lifetime, so ensure that your lobby doesn’t give off an antiquated or unprofessional feel. The lobby area should make customers comfortable and secure that their financial assets are in good hands.
One Voice – No matter what type of marketing you do, whether it’s print advertising, direct mail, radio spots or even networking, credit unions needs to have one clear, consistent message. When people hear your credit union’s name, what do they envision? Messages should be clear and consistent to avoid confusion.
Educate. Educate. Educate. Studies show that it costs five times more to attract a new member than to expand the relationship with an existing one. However, most credit unions spend most of their marketing efforts and resources on trying to gain new members.
Education of current members is imperative. If members do not fully understand how your credit union’s services and products will benefit them, you are missing a huge area of potential growth. By educating members through face-to-face interaction, convenient after-hours seminars, mailings, on-hold messaging, website content and advertising, members will be up-to-date and more likely to increase their business by signing up for additional products and services.
Build a Sales Culture. The front line is the first line of defense in maintaining member accounts and they are also your offensive line to acquire new accounts. Most institutions are challenged by the need to provide front-line employees with the necessary sales training, technical training, regulatory expertise and member service savvy to build a solid front line.
Make a solid front line by arming employees with all the information they’ll need to answer members’ questions and to cross-sell, up-sell and re-sell additional products and services. Consider this an important foundation for building a sales culture. To prevent interruptions, schedule adequate training time prior to opening, in the evenings or on weekends. Train all of your staff - members want their questions answered quickly, and don’t appreciate being passed around from one employee to another. Anyone who comes in contact with your members should be completely familiar with all the products and services available.
Ensure your credit union is following these account acquisition tips and business is sure to grow through new members and increased use of products and services by your current membership base.
About John M. Floyd & Associates
John M. Floyd & Associates (JMFA) is a profitability and performance improvement consulting firm and a leading provider of overdraft privilege programs serving more than 2,000 financial institutions in 49 states and Central America. JMFA is also recognized for training, account acquisition, executive placement, fraud detection solutions and earnings enhancement programs, as well as product, service, pricing and technology improvement consulting. As a direct result of our programs, JMFA has helped thousands of clients dramatically improve their performance and their bottom line. To learn more about JMFA, please visit www.JMFA.com. To contact Regional Director, James Atwood call him at 877-668-4857 or email him at .
* “Banks Push Harder to Get You to Switch” Jane J. Kim, The Wall Street Journal October 12, 2006.