They'll Be Runnin' from Collectors When They Come! The next hill to climb
by Ron Daly
Ready for some good news in all this doom-and-gloom? We've turned a corner in the financial crisis!
Ready for the bad news? It's the corner of Wall Street and Main Street.
What does that mean? Not everyone had stocks. Not everyone had thousands/millions/billions tied up in the market. Not everyone has 401k's and retirement packages.
But doggone if just about everyone has a credit card.
And now, banks and credit card companies are shielding themselves against bankruptcy by calling in the tab, so to speak - massive rate hikes, lowering of credit limits, and seizure of assets.
That question is one of the most famous examples of up-selling in American history. Today, credit union executives and marketing teams are striving to create the same up-sell message that will increase their service-per-member ratios. The fact of the matter is, credit unions are not really that good at up-selling when they are not face-to-face with the member. Until now...
How do you seal the deal in a wireless world?
Wikipedia defines Up-selling as a sales technique whereby a salesman attempts to have the customer purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.
Not too long ago a member had to walk into a branch to join, add a new service they needed or get a loan for a dream that they had. The face-to-face contact made our jobs easier to up-sell additional products or tell them what was new at the credit union.
Not anymore. Members can now join remotely, apply for loans online, make deposits and withdrawals from free ATMs around the world and hit a shared-branch. Have you ever stopped and considered how many members actually walk into your branches? Wonder if some members even know where your branches are? Or quite possibly what a credit union really is?
Sealing the deal in today’s wireless world is challenging credit unions. Experience has shown that credit unions are really not that good at up-selling when they are not face-to-face with the member.
TELL US NOW:Does your credit union still rely on face-to-face up-selling as its main method of moving products to members?
I took a few days to travel recently and needed cash. Not having any, I did the only sensible thing I could: hit up an ATM.
Now, my CU didn't have any branches where I was (out-of-state and all that) so I had to visit various ATMs in the area. And I was stunned and how much it cost in the long run.
I took two trips and removed $60 bucks each time. Each time, I was assessed a $3 fee from the ATM I visited and tacked on another dollar when I got home (from the CU itself, which doesn't like it when you go out of network).
So that's eight dollars gone. Think of all I could have bought with that! Two chicken sandwiches from McDonald's! A new Gary Larson calendar! 1,600 shares of GM!
I was relaying this problem to Ron, who looked at me quizzically.
"Why didn't you use the free ATM locator?" he asked. "Our credit union's website offers a program that shows free networked ATMs in a search area" (NOTE: That network he's referring to is the Co-Op Network, which is awesome.)
I could've kicked myself. Why didn't I think of that? But the better question is will YOU remember it when you go on your next trip? Banks and ATMs make millions every year in fees...money out of your pocket.
So use your Co-Op locator. Failing that, just go to a convenience store/grocery store and ask for cashback on a purchase. It can be a minor purchase, too, so not only do you get $40, you get delicious gum!
On Greed and Fear: How Credit Unions get the most out of the crisis.
by Ron Daly
Came across an article today written by Warren E. Buffett. Buffett knows money, I think that's safe to say. Read his very good article here.
Anyway, he said something in his op-ed piece that really stuck with me:
"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."
This was one of those things that, on the first read, was smart sounding. But reading it again gave me a clarity I hadn't expected. It made me think about our industry and how we SHOULD be looking at the opportunity presented. Now, more than ever, attention is placed on the stability of credit unions versus big banks. In the midst of the big earning days of low-rate loans and bum securities, banks were greedy and CUs were fearful...fearful of loaning and mortgaging irrational sums. Naturally, lending money to people who couldn't afford to pay it back turned out to be a bad idea.
So now comes the time where CUs are thriving and banks are scrambling to make up the difference. Is this the time to drop marketing? Is this the time to be weak-willed when it comes to drawing members? Quite the contrary.
Now's when CUs need to:
1) Market Hard 2) Consider their next round of member rewards and incentives 3) Become the "Bull" of finance, not the "Bear".
You are worthy of attention, CUs - you made the right decisions at the right time and you're getting praised for that. Now's your chance to be greedy when the other financial institutions are fearful.
I get this complaint from Credit Unions and other businesses all the time:
"We don't want to start sending e-mail messages and statements to our clients because we're going to get phished".
It's one of those funny statements like "life isn't fair" that's right and wrong all at the same time. The Credit Unions we serve aren't being phished. No one's asking them for crucial information and taking advantage of it. What happens is this: 1) Some crumb-bum (pardon my French) sets up a website/e-mail address and snags a picture of a CU's logo. 2) They start e-mailing people (members or not) and asking for their social security numbers, member numbers, account numbers, names, addresses, mother's maiden name, etc. 3) Here's where we get a split: 3A] The targeted e-mails drop the phish e-mail in their SPAM folder. End of discussion. 3B] The member gets smart and deletes it. End of discussion. 3C] The member ACTUALLY SENDS ALL OF THEIR CRUCIAL PERSONAL INFORMATION TO A COMPLETE STRANGER WITHOUT THINKING!!!!
Sorry, went a little crazy there. But it DRIVES me crazy. People short their members out of essential services in favor of "steering clear of trouble", so they say. Oh really?
I recall the 70s (yes, I was clean-living enough to remember some of it) - people would put boxes in front of ATMs marked *ATM BROKEN, PLACE DEPOSITS HERE*...and people did.
And, of course, we stopped using ATMs altogether.
Then, people started "vishing" - or voice phishing - by calling up people and taking their information or asking for mail-ins.
So naturally, we stopped using the telephone.
Is any of this sinking in? You can't just run away from technology because people start using it for ill. You're cheating the people you serve out of what they need to manage their money and make decisions regarding the use of your business.
Special Report - The deep breath before the plunge: What you need to read, what you want to know
Our regular contributors offer good reads regarding the Financial Meltdown.
from Ron Daly:
"Frankly, there's no better way to put this than CNN did in this explanatory article (Click Here). It shows causes, thoughts, solutions and suggestions that we as homeowners, workers, families and people with credit need to consider. It's 9 pages worth of very sharp, very smart information."
from Greg Crandell
"There are few things right now that concern me more than mortgages...the (Wall Street) Journal just reported one in six homes is "under water" - meaning the mortgage is more than the home is worth now (Click Here)."
Shoot First, Ask No Questions, Offer Blind Opinion
by Ron Daly
image from lessonforhope.org. The Far Side is the property of its owners. All rights reserved. (and WHY are we using this cartoon? Read the WHOLE article to find out.)
Well, it's official: the economy stinks.
Not that anyone with half a brain (or considerably less) couldn't see it coming. But things get really rocky when the Dow starts to plummet and the banks all fail and the government offers a "Sweetened Bail-Out" package...you get the idea.
But then some of my employees were chatting and had heard that, throughout the web, things were looking grim. There was this story from CNN which is terribly depressing - and with the word "depressing" comes the word "depression".
Yes, depression. As in The Great Depression. As in "Brother, Can You Spare a Dime?" depression. Which 60% of Americans think we're facing. And that means 60% are overreacting.
You might not agree with me. You might think we're doomed. But the Wall Street Journal doesn't think so...which is to say the Nobel Laureate who authored this article doesn't think so. The LA Times seems to argue that depressions in economics are inevitable, but another "Great Depression" is highly unlikely. People in Congress and in the Media have been yelping about depressions and recessions and bailouts and the plummeting market and that's got you worried. You should be worried, but you shouldn't be terrified. You should be ACTING on good information given to you by informed market professionals. Don't sell everything you own. Don't give away all your possessions and run off into the desert. Just think carefully and don't get overwhelmed by people telling you we're all doomed.
So...what's with the Orangutans?
Gary Larson, creator of the Far Side cartoon series, wrote this comic in the late 1980s. Jane Goodall's foundation threatened a lawsuit against Gary Larson, saying the cartoon was in terrible taste and was a blight on the reputation of Jane Goodall herself. Larson was hurt - he loved Goodall's work, being a nature lover himself, and respected how hard she had worked to preserve chimp habitats. What finally made the difference? Goodall herself, who thought the cartoon was hillarious. She reprimanded the legal aide that started the bru-ha-ha and apologized to Larson himself.
Soon, Goodall invited Larson and his wife to her wildlife refuge and even began to use the cartoon on t-shirts to support her foundation. She even wrote the foreward of one of Larson's anthologies.
How does this apply to the financial crisis? This recent downturn is being overblown, and it will get better. We will rebound, folks. In the meantime, we don't need to overreact. We need to see what's in danger with our own finances, find out what we can do to adjust, and batten down the hatches until the sun starts shining again.
:: Credit Union News :: The stability of the CU industry has been a hot topic for many online news sources recently. The stories that follow extol the virtues of credit unions in shaky financial times:
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