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The 2020 Vision of Marketing: A Focus on Purpose

By Denise Wymore

How do we systematically go about forgetting everything we know, before it destroys us?—Tom Peters

What if we got it all wrong? If 20 percent of your members are providing you 80 percent of your income, why did you spend the majority of your marketing budget trying to woo in complete strangers? Why in the world would you spend your existing members' money on a campaign that offers a better rate than you're willing to give them? And why would you take dividends from long-term members and buy iPods to give to expensive single-service households? What if we got it all wrong?

I am grateful for this economy for one reason. It requires we step back and take a look at everything we spend money on and ask, is this necessary?

In 1999 as we were busy making Y2K preparations, we learned that marketing was a non-essential function. Should we wake up on Jan. 1, 2000, with no computers functioning, would we put any resources toward marketing? Not likely. That was a warning shot across the bow in my opinion. And many ignored it.

It's time to let our members market for us again. It's the best marketing, it's free, and you know it. But how do we let go of what we know, before it's too late?

1. Stop cheating on them. If you still have a core sponsor that is healthy, happy and loyal, you need to spend more time at "home" and less time trolling for new partners (SEG, community).
2. Know them. Identify your top 20 percent (you may find it's an even smaller number). Go beyond how much they have on deposit or in loan balances. Who are they? What makes them so loyal?
3. Invest in them. Ask yourself, what have you done for them lately? Pretend your credit union is small again. You know them all by name and you just pick up the phone and thank them for their business. How about taking them to lunch? Or buying THEM an iPod as a gift—not a bribe?
4. Enable them. This is the true definition of social media. Encouraging, allowing and supporting communication. It is not marketing. There is no better example, in my opinion than Verity Mom.

Retention is the new acquisition. Everything old is new again. Imagine you've just started a financial cooperative in the lunch room. Ten people are committed to pool their resources so those who can save will get a good return and provide funds for those who need to borrow. Now relax and let them market for you—again.

Denise Wymore is a firebrand, marketing consultant and credit union lifer. Check out her blog, Cult-ivation.

 

Build a Bike, Build a Team ... and Help Kids

By Lisa Hochgraf

I admit I chuckled when I heard some grumbling early on.

Apparently some attendees of CUES Symposium: A CEO/Chairman Exchange, held two weeks back in Phoenix, thought the optional afternoon Build-a-Bike charity event would be simply about using wrenches to assemble bikes for underprivileged kids.

Turns out, Build-a-Bike event participants had to pass teamwork and leadership challenges to earn their seats and handlebars.

 

The challenges included guiding a blindfolded teammate through a lawn minefield using only voice directions, and assembling a shape puzzle without talking. There was lots of smiling and good feeling as work continued.

Participants passed the challenges with flying colors, arriving back at the bike assembly station long before the estimated time.

As the bikes went together and were tested (yup, right there in the hotel ballroom), teams started celebrating their accomplishments.

But perhaps the biggest cheer went up when the full group stood behind the four bikes they had built and learned about how their efforts would help children from an economically challenged part of Phoenix get themselves to the Boys and Girls Club center.

"I have been telling every CEO I can find about how good that event was," says CUES member Kent Oram, CSE, CCE, president/CEO of $887 million Idaho Central Credit Union, Pocatello, Idaho. "I hope CUES continues to provide opportunities for community service."

CUES intends to do just that. And another CUES member (who's also a member of the CUES Board of Directors) was inspired by this event to pay it forward.

President/CEO of Vantage West Credit Union, Tucson, Ariz., Bob Ramirez, CCE (right), says he hopes to have Build-a-Bike be the entertainment at the next holiday party for his CU's staff.    

I say way cool. Build a bike, build a team. Do some kids a good turn. Isn't people helping people what it's all about?

Lisa Hochgraf is a CUES editor.

Read more from CUES Symposium here, here and here.

Financial Literacy: Does it Work?

By Theresa Witham

I've been thinking about financial literacy a lot lately. People in--and out of--the financial services industry are talking about it a lot too.

To learn what credit unions are doing, CUES conducted a survey late last year and released a white paper outlining the results. Financial Education in Credit Unions is available free to CUES members and non-members.

Here are a couple of highlights:

When asked to rank (with one being most important) four goals for improving members' financial situations, respondents said:

1. increasing members' awareness about what they should be doing financially,
2. educating members,
3. helping members take action to meet their goals, and
4. encouraging members to change behavior.

How are CUs delivering financial education? 54 percent of respondents reported using workshops; 58 percent use e-mails or newsletters; and 69 percent use printed newsletters or magazines.

A short time after our survey was released, I was browsing through Time magazine when I saw the headline "How to Teach Kids About Money." What really drew me in was the subhead "Today's conventional wisdom isn't working. What will?"

The article, by Barbara Kiviat, claims that there is little evidence that traditional classroom-based financial literacy courses help students make better financial decisions outside of school.

"A 2008 survey of college students conducted for the JumpStart Coalition for Personal Financial Literacy found that students who'd had a personal-finance or money-management course in high school scored no better than those who had," Kiviat writes. Read the JumpStart press release here.

While traditional programs may not work, letting young kids manage real money and make real decisions does show promise.

One such example is the Ariel Community Academy, a Chicago charter school for grades K-8. It is a public school with corporate sponsorship from financial services firm Ariel Investments.

From the Arial Investments Web site:

"In addition to the mandated Chicago public school curriculum, ACA has incorporated concepts of investing and financial literacy into the classroom. Through a partnership with Nuveen Investments, a Chicago-based investment and trust company, the Ariel-Nuveen Investment Program awards each incoming first grade class a $20,000 grant. This money is designated to the class as a whole and follows the students until their graduation

"In the early years the money is invested and managed by a group comprised of representatives from Ariel and Nuveen. However, as the students advance through the school’s unique investment curriculum, they become actively involved in making the investment decisions. In fact, a Junior Board of Directors (made up of seventh and eighth grade students) is ultimately responsible for deciding how the $20,000 is invested. Upon graduation all profits that have accumulated in the class’ account are divided in half. One half is given by the students in the form of a class gift to improve the school. The other half is distributed among the graduates as cash or matched contributions toward a 529 college savings plan, depending on each student’s choice. The original $20,000 grant is then turned over to the next incoming first grade class, making the program self-perpetuating."

Per the Timearticle, for the first-time ever, last year's graduating class had less than the original $20,000 thanks to a dismal stock market. Is that too painful a lesson for 8th graders?

Adults for the most part have plenty of real-life financial experience. They bounce checks. They see fees add up over late payments. And if they are smart and contribute early in their careers to a 401(k) program or other retirement fund, they'll have the joy of seeing their funds increase more and more, thanks to that wonderful thing called compound interest!

But as the last few years have demonstrated, adults also made a lot of really bad mortgage decisions. So I wonder if some adults need refresher courses to get back on track.

I think the real-world experience that the Ariel Community Academy kids are getting is a great idea. But I also think that a lot of adults would benefit from a back-to-the-books approach. Sometimes we just need a little refresher. And to be honest, most adults never got to experience a program like the ACA one so they make their mistakes with a lot more at stake!

And while the research may show that traditional financial literacy doesn't help students outside the classroom, it doesn't say anything about whether it will help adults make better decisions. I am with Christopher Stevenson in thinking that financial literacy, especially when offered by a trusted credit union, can make a difference.

In fact, according to a new Filene Research Institute report, college students about to graduate are an ideal target for financial education. Read more about the one-day seminar that has been tested with great success over the past five years at the University of Wisconsin-Madison in this article.

Looking for training options for your members? Here is a shameless plug: CUES offers online financial courses for CU members in its Financial Success Suite and for CU employees in Educated Investor University. Why do employees need financial literacy education? Check out my colleague Leisa Goodman's recent post.

Theresa Witham is a CUES editor.
 

Leadership Checklist

Posted by Lisa Hochgraf

 

If you're a leader, all the world is always a stage, Michael Useem asserted during his keynote at CUES Symposium: A CEO/Chairman Exchange held last week in Phoenix. Said another way, leaders need to be prepared to stand up and, well, lead at any time. (In the photo below, two CU leaders take advantage of a networking break during Useem's session. Eric Stiegel (left) is president/CEO of $87 million U.S. Employees Credit Union, Chicago, and Ed Gvazdinskas is president/CEO of $180 million Heartland Credit Union, Springfield, Ill.)

 

For example, leaders need to be able to convicingly talk about the strategy behind a merger, and address staff fears at such a time, said Useem, William and Jacalyn Egan professor of management and director of the Center for Leadership and Change Management at the University of Pennsylvania's Wharton School, home to CUES' CEO Institute I.

 

This common demand on leaders to be at the top of their game, ready to "perform" at any juncture, begs the question of what qualities all leaders might share. "What characteristics do Jack Welsh (of General Electric) and Mother Theresa have in common?" Useem asked.

 

Useem presented this checklist of things leaders need to be able to do, either innately or by learning how to do them:

 

1. Articulate a vision: Formulate a clear and persuasive vision and communicate it to all members of the enterprise.

 

2. Specify a strategy: Set forth a pragmatic strategy for achieving that vision and ensure that it is widely understood.

 

3. Honor the room: Frequently express your confidence in and support for those who work with and for you.

 

4. Identify personal implications: Help everybody appreciate the implications of the vision and strategy for their own work and future with the firm.

 

5. Convey strategic intent: Make it clear what is expected of those who work with and for you, and then--assuming that they are well trained and prepared to do what is expected--avoid micro-managing.

 

6. Motivate the troops: Appreciate the distinctive motives that people bring, and then build on those diverse motives to draw the best from each.

 

7. Convey your character: Through gesture, commentary and accounts, ensure others appreciate that you are a person of integrity.

 

8. Say it so it sticks: Communicate all the above in ways that people will not forget; simplicity and clarity of expression help, as do elements ranging from personal gestures to grand events.

 

After laying out this "checklist," which he likened to the checklist pilots follow to ensure a safe flight, Useem asked CUES Symposium attendees to come up with a few additional skills leaders need to have in these times. One of those was "smiling" (see the photo and caption on this page). What would you add?

 

Lisa Hochgraf is a CUES editor.

Financial Literacy--Look to Your Employees First

By Leisa L. Goodman

I DVR most TV shows I watch, so I don't see many ads, but one recently caught my attention. It poses a question that goes something like, "Will we remember this era as the great recession? Or the recession that made us great?"

Hopefully, the community as a whole is ready to listen to the wake-up call the economy is sending, and learn from our mistakes so we can come out on the other side stronger and wiser for the wear. Credit unions can help by making financial education readily available.

If increasing financial literacy is one of your credit union's goals, you may want to start by taking a look at your employees first. Here are four reasons why: 

Financial distress is distracting. Knowledge is power. Real estate values are plummeting and unemployment remains high despite a recent decrease and living expenses are increasing, leaving many distracted by financial concerns--including your employees.

The Society for Human Resource Management recently released poll results noting that 35 percent of employers have reported an increase in employee requests for financial ed.

Nearly two-thirds of those companies have responded by offering financial education resources for their employees. The result? On-the-job concentration levels increase due to a sense of overall financial well-being.

Lower employee turnover. A recent study published by the Filene Research Institute, "The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions" examined a program offered by Staples, Inc., in which tax preparation help and financial education were offered to low-income employees.

Staples found employee retention rates increase by 32 percent, a tremendous return on investment--for each employee who participated at a cost of $75, the company saved $480.

Increase in contributions to employer-based accounts. The Filene report also found a significant boost in employer-sponsored plans such as stock purchases, 401(k) retirement plans and tuition reimbursement.

Increased sales. When employees understand the products they are selling, they explain things to members with confidence. Credit unions offering financial education to employees see their sales increase.

Case studies conducted by Precision Information, LLC, found that credit unions offering Educated Investor University to their employees experienced considerable spikes in product sales. (Full disclosure: Educated Investor University is marketed by CUES.) Sample results include credit unions with a:

• 275 percent increase in sales of new investment products,
• 325 percent increase in gross revenue,
• 275 percent growth in IRA sales,
• 282 percent increase in money deposited in new IRAs and 
• 321 percent increase in new term deposit accounts.

Take a good look at your employees' financial ed needs; you may just find the underserved are right under your nose.

Leisa L. Goodman is a CUES Marketing Specialist.

Also read "Teaching Smart Money Management: How Financially Literate is Your Staff?"