Sales Training Helps Capture Business

CUNA’s E-Scan Newsletter
September 3, 2010

Amid the turbulence of the recession and recent financial reform legislation, credit unions and community banks are jockeying for position. Success, in large part, comes down to who's in the best position to take advantage of the opportunity.

Financial institutions only gain market share when their frontline staff transform marketing opportunities into actual sales.

But the results of that process are mixed, according to Jeff Platter, vice president of consulting and marketing firm Haberfeld Associates. As part of his firm's consulting practice, Platter “mystery shops” community bank branches. Unfortunately, he writes in The Bank Administration Institute's Banking Strategies magazine, most retail financial services executives would be disappointed by what he sees in their offices.

Marketing isn't the problem, says Platter, as there are lots of marketing dollars being spent on a variety of media. But when Haberfeld's mystery shoppers actually enter branches, they find a huge disconnect: The employees have not been prepared to determine which products are right for prospects or how to ask for their business.

These companies haven't absorbed the simple lesson that marketing without training is like bait without a hook.

Seize the opportunity

Once someone walks into a branch (or calls) to inquire about a product or service, the job of marketing is—or should be—100% done. Marketing's job is to provide sales opportunities; training is required to make sure those opportunities get converted into sales.

Platter's mystery shopping focused on the process of opening a checking account, customer service behaviors, the sales process, and cross-selling of other products and services.

While the staff members Platter encountered were invariably friendly, eager to help, and proud of their company, their behavior typically revealed these deficiencies:

• Failure to shake hands, ask for the consumer's name, or offer their name.
• Lack of consistently applied professional etiquette.
• Failure to qualify prospects to find out which accounts provided the best fit.
• Absence of a true sales tool for the employee to use.
• Expectations that prospects would pick suitable products, even though the accounts were often complicated.
• Hesitation to inquire about eligibility for accounts tailored to the needs of older clients.
• Neglect regarding whether the prospect was interested in business as well as personal accounts.
• No attempt to get the prospect to open an account that day.

Poorly prepared staff is not unusual, says Platter, who sees it in branches all across the country. He believes that:

1. Staff truly wants to do the right thing for their employer and for consumers. Product and sales training is a great way to invest in those employees.
2. Advertising is expensive. When someone comes into your lobby, you must be in position to take advantage of it. Most institutions aren't equipped to do that.

To turn prospects into customers, Platter recommends that financial institutions:

• Eliminate product “landmines”—offerings that make little sense in relation to other products and which employees are uncomfortable describing.
• Develop a set of professional etiquette rules and have your employees practice them. It might include starting off with the same introduction and asking if the visitor would like a beverage.
• Create a process of three to five qualifying questions that will identify the right account for the prospect. Role play this process.
• Practice recommending the product and asking for the business. It can be as simple as, “This is the right product for you; here's why. Would you like to open that account today?”
• Commit to providing staff with a simple sales tool, including the qualifying questions. Keep it updated.
• Re-examine your account-opening policies and make sure they're consistently applied. Consider ways to make it easier for prospects to do business with you while you stay in compliance with regulations.

The difference between an average and a high-performing retail branch, according to Platter, is three to five consumer and small business new-account openings per week. The opportunities, he believes, are too rare and new customer households too valuable to blow any of them.

This article originally appeared in CUNA's E-Scan Newsletter. Reprinted with permission.

Study: Financial Management Tools Drive Returns, Relationships

Ray Birch
August 31, 2010

A study reveals that online financial-management tools drive deeper relationships, attract younger members, and return about $40 annually in additional revenue per user.

Cathy Graeber, founder of the Swimming Upstream consulting firm, came to that conclusion after studying the habits of consumers using an online financial management tool and the impact the service has on the financial's bottom line. Graeber studied five credit unions and three banks that use Intuit's FinanceWorks, but believes the results apply to any online financial-management program.

Graeber contended that the key finding from her white paper, titled "The Bottom-Line Impact of Offering Online Financial Management," is that an online financial management tool brings an additional $40 in revenue per user, compared with those members using only online banking. "When we looked at the attrition rates and product ownership and did the calculation, we found there was a $40 variance in net product profit between members that use FinanceWorks compared with online users that do not use FinanceWorks," she said.

With credit unions' limited budgets, that's an important number to know, suggested Graeber. "With all of the online tools to consider adding, like bill pay and mobile, you really want to know the bottom-line benefit before adding a solution."

Crerdit unions in the study ranged from $1.2 billion to $4 billion in assets, banks from $1.6 billion to $4.3 billion. The case study often refers to data from a $1.2-billion credit union, but Graeber said findings at the credit union were consistent across the seven other financials in the study. Intuit commissioned Graeber to perform the analysis.

Other important findings:

• Users log into FinanceWorks twice as often as users just using online banking (18 times per month versus nine).
• Financial-management tool users present a 98% retention rate, 53% higher than offline members, and 4% higher than online members not using FinanceWorks.
• FinanceWorks drove deeper relationships. The average FinanceWorks user owns 3.7 accounts, offline members 3.1, and online members not using FinanceWorks own 3.4.
• FinanceWorks users have nearly 30% higher loan balances than those not using FinanceWorks.

"The main thing we saw is that the use of an online financial-management tool made much more active members," Graeber said. "That's important because every opportunity to get members into your website is a chance to cross-sell. And it gives them the ability to serve themselves, which lowers your costs to serve."

Graeber also pointed out that Gens X and Y consistently, across all eight financials in the study, made up at least half the users of the financial-management program, and in some cases comprised two-thirds of users.

Not only does the study show the advantages of a financial management tool to generate business, it also can be a sound defensive strategy, concluded Graeber. "Besides some of your competitors offering the service, you face third-party sites like Mint and Wesabe who say, 'Don't worry about the bank or credit union and come to us.'"

The white paper can be downloaded at http://www.swimmingupstream.com/.

This article appeared at www.cujournal.com and is reprinted with permission.

Remote Deposit Capture is Focus of New Tech Council White Paper

CUNA Councils
August 24, 2010

Remote Deposit Capture (RDC) promises to extend greater convenience to members while at the same time potentially reducing operational costs and investment in building infrastructure, according to a new white paper from the CUNA Technology Council.

RDC is when a member or business account holder utilizes an optical scanning device, such as a home-office scanner or mobile cell phone camera, to capture (scan) images of checks for deposit, upload them to a computer on site, and through a software application, edit and send the front and back images securely over the Internet to the credit union for processing and deposit.

As noted in “Remote Deposit Capture: Thinking Out of the Branch To Better Serve Members,” RDC is a valuable tool for credit unions that have:

• members who reside some distance away from a branch
• members who frequently travel or are stationed in other countries
• members whose college-age children are in a location without a branch
• members who wish or need to make deposits during non-business hours

RDC may also prove useful to credit unions that have a small number of branches in comparison to a large field of membership, as is the case with some select employee group (SEG)-based credit unions.

The new white paper covers key points related to RDC and RDC application development, including:

• the business rationale for offering Remote Deposit Capture
• eligibility criteria and deposit limits
• hardware and software considerations, including functionality and platform expansion
• image correction concerns
• vendor partnership
• fraud detection and risk management controls, including duplicate detection
• the importance of member education and trained back-up support

In addition, four credit unions are profiled through in-depth case studies, providing the reader with an understanding of how remote deposit capture functions as well as its primary challenges and advantages.

CUNA Council members are entitled to complimentary copies of these and more than 200 white papers; non-members may purchase the white papers for a price of $50 per copy.

The paper is available online in the white paper section of each council site – select the “Tech” tab.

Ten Ways to Connect with Your Community

Lana J. Chandler
August 23, 2010

Reaching out to the community is one of the best ways to differentiate your branch from competitors. Community involvement helps you show appreciation to local clients, increase your visibility, and give back to your community.

More than Money

Getting involved with your community is more than making donations. Here are ten ways to take it further:

1. Join business and civic associations and participate in their activities. Attend regular meetings, serve on committees, and go to functions.
2. Do volunteer work in the community. Actively support local nonprofit organizations. Even if your budget is tight and monetary donations are limited, you can still volunteer your time. Soup kitchens, literacy programs, homeless shelters, and Meals on Wheels are examples of local nonprofits that always welcome help.
3. Adopt a local school. Educate students on how to manage their money and basic banking skills.
4. Celebrate the Christmas season with a “mitten tree.” Some institutions call it a “giving tree.” Place a tree in your lobby. Invite people to decorate the tree with new mittens, gloves, hats, and scarves. Donate the items to disadvantaged children in your community. Besides providing needed items for the children, the tree allows employees and clients to get involved with their community and help in a small way. Tip: Partner with schools or community non-profit groups that sponsor outreach programs. You need a credible partner who can ensure the donated items will be distributed to disadvantaged children.
5. Host an open house. Use the opportunity to fortify relationships with your existing clients, meet new prospects, and showcase your branch's warm and friendly staff.
6. Hold free seminars aimed at older consumers. Work with your local AARP chapter and coalition for senior citizens to do consumer education seminars. Bring in guest speakers like someone from the state attorney general's office to talk about consumer fraud; have employees talk about topics like investments or estate planning.
7. Get involved with local housing organizations that help low-income families buy their own homes. Volunteer to counsel these families and individuals about home buying, budgeting, and banking.
8. Sponsor sports programs of local teams. Encourage the teams to bring in trophies and pictures to display in your lobby.
9. Rent a booth at local fairs and events. Hand out freebies like bottles of water and fans.
10. Invite art classes of local schools to exhibit their work in your lobby.

This story appeared in Branch Manager's Letter at www.branchmanagersletter.com and is reprinted with permission. Contact publisher Lana J. Chandler at 304-343-0206 or Lana@BranchManagersLetter.com.

Effective Strategies for Credit Card Pricing is Subject of Latest OpSS Council White Paper

CUNA Councils
August 19, 2010

Credit unions have a real opportunity to gain credit card market share from banks today, according to a new white paper by the CUNA Operations, Sales & Service (OpSS) Council. Even before the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) took effect, big banks were drawing consumers' ire, between the bailouts, their reactions to the economy's effects on their credit card programs and their preparations for the new regulatory environment.

The new paper, “Credit Card Pricing: Effective Strategies for a Post-CARD Act Market,” notes that with a well-designed, competitive value proposition—including pricing strategies that make their cards attractive without posing excessive risk—and a comprehensive marketing/communications plan that trumpets the credit union difference, credit cards can still be a credit union's highest-yielding asset.

This white paper for the CUNA OpSS Council specifically discusses:

• Significant CARD Act provisions and pricing implications
• Effective pricing strategies
• Credit union advantages
• Metrics
• Marketplace forecasts

It also includes three case studies showing how credit unions' pricing has evolved to fit today's marketplace.

CUNA Council members are entitled to complimentary copies of these and more than 200 white papers; non-members may purchase the white papers for a price of $50 per copy.

The paper is available online in the white paper section of each council site – select the “OpSS” tab.