What are credit unions known for? This is a great question to ask yourself and others whether you are a credit union leader, an employee, or an advocate. What answers will you get? Will they be positive or negative? Will they identify strengths or weaknesses? Will they confirm or challenge your current beliefs?
Recently, a controversial bill being presented by congress brought this question to a LinkedIn comment discussion. Answers on this comment string ranged widely based on the individual’s experience, professionally and personally, with credit unions. Of course those responding within the industry presented a favorable opinion; outside of the industry, responses varied widely.
I decided to Google the question to see what the Internet reported. Of course, the results brought up a number of different answers, but as I read through 3+ pages, I noticed a consistent theme. Here are just a few I found from both proponents and neutral sites:
MyCreditUnion.gov: “Credit unions are not-for-profit organizations that exist to serve their members.”
Money.USNews.com: “Credit unions are cooperative and member-owned.”
LoveMyCreditUnion.org: “When you join a credit union, you’re more than a member, you’re an owner – and that means you have a say in how your credit union is run.”
Investopedia.com: “Credit unions look to serve their membership and tend to be more flexible with it comes to customer needs.”
As you can see, the theme here is that credit unions are known for their focus on the member. And rightly so. As an industry, this is something we consistently shout from the rooftops. It needs to be something the industry protects, and also strives to champion moving forward. But what does that really mean?
Through casual conversations, the topic of what I do for a living often comes up (I train credit unions on sales). Anecdotally, I ask them if they are credit union members and what they think of their credit union. I am not sure if it’s because they know I work with credit unions directly, or if it is an accurate representation of their opinion, but often the comments favor a more negative tone as they confide in me their displeasure in the lack of personal service.
Of course, the credit union movement is strong, and we are experiencing growth in membership, product and service penetration. The industry is doing something right, but there is a real opportunity to do more. Allow me to share a few personal experiences outside of the industry to illustrate how.
Recently, my wife went to a health and nutrition store to find a less expensive alternative to some workout supplements we had been taking. The supplements we had been taking were excellent, they were just quite costly. She was hoping to find a product that would work just as well, but at a faction of the price.
Thinking it might be easier to show what we were looking for, my wife took the supplement with her. She handed it to the sales associate and asked if they carried something like it at the store. The sales associate took it, read all of the ingredients and then told her they didn’t carry this exact formula. The associate went on to say that in order to get the exact formula we would need to purchase three separate products which would cost more than the cost of our current product.
The reason my wife went to the store was to make a purchase but she left without buying a thing.
So what went wrong? The sales associate focused only delivering what my wife had asked for and not what she actually needed. The associate spent time with my wife going as far as to look up all of the ingredients and try to piece together a solution, but failed to truly accomplish what my wife wanted, a cheaper solution.
What my wife was actually looking for was a supplement that delivered similar results at a lower cost. She was looking for a different solution, not the same solution in new packaging. In a store packed to the ceilings with supplements, there had to be at least one if not many solutions that met our needs. The sales associate focused on only one option. As a result, she did not make a sale that day; and missed the opportunity to gain a customer for life.
As credit unions who truly desire to create exceptional member experiences and not make this same mistake. Credit unions need to move away from the Order Taker approach to a truly member-centric, service focused, proactive advocate role.
Another experience at a tire center perfectly illustrates what all credit unions should strive for.
I was in need of new tires for my car. A few friends and family members recommended I go to a tire center a few miles from my house. I like recommendations, so I chose to go there.
As I drove to the tire center, I passed a number of other shops along the way. The thought kept popping into my mind, “Why not just pull into one of these closer shops? Tires are tires, right?” But in the end, I drove on and followed the recommendation.
As I arrived, I noticed an individual walking out of the door. No sooner had I parked and got out of my car, then a service tech was there to welcome me. He thanked me for “driving” in and asked if I was looking to get new tires or needing service on the ones I had. After getting my response, I was invited into the office to look at options.
Once inside, he quickly got to work. I am not sure how, but he already knew my tire size and that I needed four new tires. He began with, “We offer a wide range of tires for your vehicle. What is more important to you, price or longevity of the tire?” Of course I was looking for the best quality at the best value, but price was most important. He asked a few other questions about what kind of look I wanted, the tread, and warranties I was after.
When he had gathered the information he needed, he made 3 recommendations, two options that met my lower price request, and one that was about 20% more expensive.
Rather than asking me which one I’d be interested in, he explained that the cheaper tires will cost less right now, but would likely only last a year, and that they didn’t come with a reliable warranty. He then went on to explain that the more expensive tires would cost more now, but would last one to two years longer. Additionally, they had a better tread for winter driving (big concern for Northern Utah), and that the warranty was also better.
He then asked which I’d like to go with? It was a lot more than I wanted to spend, but how could I go with any other option after hearing all of the benefits of the more expensive tire?
As they were putting on the tires, the tech called me over to let me know of a few things they had noticed. He told me my fluids were low and that they had topped them off for free, but the rear brakes were low and needed to be replaced. He quoted me a price and asked if I’d like to get those replaced today or schedule a time to come back.
Finally, when the car was ready to go, he explained the warranty and the free rotation they offer and let me know they would contact me when it was time for them to be rotated.
In the end, I believe I spent a few hundred dollars more than anticipated, but it didn’t matter. I drove away feeling like I had gotten an amazing deal, and was treated like I was the only customer that mattered to them that day.
So what did this tire tech do right?
First, the tech was there to greet me when I arrived. He thanked me and asked me what brought me in, rather than making an assumption.
Second, he gathered the information he needed to serve me. That included asking me questions to learn what I valued most, and a few questions about things I hadn’t considered.
Third, when he presented his recommendations he educated me and gave me the information I needed to make the best decision for me.
Fourth, he didn’t just sell me what I was asking for, he upsold me the best value. Although I ended up spending more money, I did so willingly because he took the time to deliver what I needed.
Finally, the tech made assumptions when it was appropriate and asked for information when it wasn’t. He asked questions to learn why I was there, what I had in mind, what I needed, was hoping for, and desired to have. He assumed I was ready to buy and wanted all of the other services they offered that benefitted me.
Credit unions have an exceptional reputation. They are known for their focus on the member, even existing for the sole purpose of serving their members’ needs. However, where does your credit union really fall on the performance curve? Do they operate like the health and nutrition store, or are they more like the tire center? Does your credit union miss the opportunities your members present every day, or do they create opportunities through sales? Are you allowing members to walk away with their needs unfulfilled, or do you deliver exceptional value beyond what the member even knows is possible?
Sales and service are intertwined. As a credit union, you cannot truly serve your members’ needs if you are not selling to them. Herein lies the opportunity to do better. While growth is happening, credit unions are still missing much of their members’ business. What is your checking penetration? What percentage of your members have active deposit accounts and long term savings with you? How many have credit cards with other institutions that they actively use? Is there an opportunity for growth, and if so, how can you win that business through sales?
Credit unions have an excellent reputation, and are known by many to be member focused. Truly, credit unions exist to do just one thing – to serve their members’ financial needs. Through sales, credit unions can take the member-centric focus to the next level and transcend the competition.