3 Things Every CU Executive Should Know

I just had the most fascinating discussion with a credit union marketing professional regarding the major concepts that their strategic planner had with their credit union. One of the themes coming from their strategic planning session was "protecting ROA". Protecting ROA? Last time I checked, protecting ROA is not a strategy. Great ROA is the result of great strategy executed brilliantly. So what is the strategy to "protect ROA"? Build a new branch. Well, that is a very interesting tactic. But guess what? It is not a very good strategy -- especially when you don't understand your brand. It's not a good strategy when you don't know why your best customers do business with you. When you don't have a good answer to the question "Why should I do business with you, and not the company next door to you?" The decision if, when, and where to build a new branch MUST be a brand-driven decision, otherwise it's doomed for disappointment.

From what I understand, this credit union's new branch is going into the "hot" and growing part of town. Well, that's all fine and well. But who is going to go to this branch? Why should they do business there? Does this credit union have credibility with this population there? Or is that new population indifferent to the credit union and what it has to offer? My guess is that people in this other part of town already have a relationship with a financial institution, probably a bank. What does the CU's current membership have in common with people in the new branch location? This credit union can not answer this fundamental question. (Which can only lead to headaches in the future.) This is a mistake which I find credit unions repeating over and over again. Maybe the new branch will be successful. Maybe not. Just being there, will not be enough to get people streaming in the door. Is this a risk a credit union can afford to take? Without getting a good pulse of its membership and desired new membership first?

Most credit unions do not realize that their strategic business advantage is not low rates, nor superior products, but in serving people with a common bond. Knowing your audience intimately, and serving their unique needs. Credit unions often think that it's all about efficiency and geography. Other consultants try to boil everything down to these two factors. Well, efficiency and geography can't explain why people will drive past a myriad of financial institutions to get to the one that they want. People will drive by five pizza shops on their way to THEIR favorite one. What motivates people to do this? Well, for different institutions and constituents, the reason is different. What works for one bank or credit union won't work for another right up the street. Because their fundamental business DNA is different. Because their members/customers are different. And discovering those differences, codifying them, and cranking them up is what our branding work with individual credit unions is all about.

If I could wave a magic wand, and impart three pieces of knowledge to every credit union executive in the country, they would be these:
• With the aid of an experienced facilitator, conduct a focus group with your best members. I guarantee it will expand your mind and change your life.
• A credit union with $320M in assets, and a marketing budget of half a million dollars, had never been heard of by a random sample of people in its general community.
• You'd be surprised why your best members love you and do business with you. (What are you doing to solidify that relationship?)
• When a credit union expands its FOM, or builds a new branch without a clear plan, reason, or commonality with existing members, it is diluting its brand. And that can lead to a diluted ROA.
• Building a branch never leads to as much new business as management anticipates. I've seen this over and over again. Why? Because consumers have more choice than ever. Thanks to the internet, consumers are now informed more than ever. And most consumers don't care about half a percentage point one way or another. Surprisingly, many other factors are more important. Usually management can not clearly and succinctly state the reason that someone should do business with them compared to another financial institution in terms that are meaningful to the CONSUMER. If you can't fulfill this RULE NUMBER ONE, do nothing else until you can answer it. Most especially, don't build another branch.

Okay, so that's four things, but these are important points! I could add much more, but I'll save them for future rants....

(Here are earlier rants, on the term "human resources" and on-brand visual identity.

Branding as best decision from CEO Scott Olson

I am so thrilled to have such an impact with a credit union. I am fortunate to work with such a great team, and we are so honored to be working with Scott Olson, Koren Kent, and the rest of the Cities CU team on developing and refining their brand. Here's what Scott had to say after our initial branding work with them:

"Cities Credit Union is a smaller credit union located in a suburb of St. Paul, Minnesota. Up until three years ago, we were a totally SEG based credit union serving the area’s telephone company employees. Because of phone company consolidation and other cost cutting measures, we felt it best to apply for a community charter in order to diversify our membership base.

After receiving a community charter, we began advertising through a variety of media including: direct mail, newspaper ads, business visitation and even television advertising. We were under the impression that we were doing the right things to promote our credit union. We had some success, but we knew that we were capable of achieving so much more. It was at that time that we sent our Marketing Officer to an EverythingCU.com conference in Portland, Oregon.

Our Marketing Officer came back from this conference totally changed and totally focused on Branding. After hearing and reading what was taught at the conference, we decided that what was lacking in our business plan was a Brand Strategy.

We began our Branding Company search in the fall of 2005. We considered several local companies as well as ones that were nationally recognized. The one company that seemed to “stick out” was EverythingCU. EverythingCU not only taught, but lived their own unique brand in the fact that they deal exclusively with credit unions. After all, we say credit unions are unique, but do we act that way with our business practices? EverythingCU was a testimony to that uniqueness.

The decision to choose EverythingCU to find our unique brand was one of the best decisions I’ve made as the President/CEO.

EverythingCU took the parts of our business that we had a competitive advantage in and showed us how we can emotionally connect that with our membership. We found that:
• Our advertising was doing very little or nothing in making us known in our community.
• That we had only a product driven marketing approach.
• While our current members liked and trusted us, they likely would not recommend us to a friend or family member.
• Our competition was not other credit unions, but large banks.

We also found that even the very large credit unions in our area (who have a marketing budget in the millions) are still virtually unknown. This to me was amazing!

We’ve only gone through the beginning stages of our Branding process and I’ve already seen a huge change in our staff, our members, and our community outlook. Our staff is engaged, excited and ready to tell our story. Our members have already commented on the positive changes they’ve seen and felt as well. They seem to linger a little longer in our lobby and chat. They’ve also started telling others.

I am anxious and excited for the rest of our story to be discovered. Even if the process stopped right now, our credit union has been forever changed. Not only will we be successful in telling our story, but we’ll have a fabulous time doing it. That’s what the credit union movement is all about!!"

--Scott Olson, President/CEO, Cities Credit Union, St. Paul Minnesota

Good news from Jen at Cities

The reverberations from our initial branding trip to Cities CU are still being heard. Here's the latest update from Jen Edlin, Vice President.

"We are having a wonderful day. We're still in a bit of a glow from our successful board meeting last night - Koren was fabulous of course. The BOD was surprising receptive - I actually thought we'd have more splaining-to-do-Lucy however the questions they asked about the whole process led me to believe they support the direction we're going in. I think they missed that "credit union difference" more than they have admitted to.

And if that wasn't enough, we had a great staff meeting this morning. Koren reviewed the progress so far and gave copies of our "story" as it stands now. The staff has been talking about nothing else ever since. One person said she'd always read about the difference between credit unions and banks but has never "felt" the difference - and now does. She has definitely had her "ah-ha" moment and so has the rest of the staff.

I'm sure you're sick of us saying how much we are enjoying this, how much we wish you could come here earlier, how interesting and enjoyable you and your coworkers are....so I won't say it all again. Saying "meow" would be an understatement - it's an all out purr-festivus for the rest of us."

Jen - Cities

Purging the term "Human Resources"

We need to eliminate the term "Human Resources" from our vocabulary. I can not think of a more derogatory term for people. After all, people want to be, and deserve to be, treated as people, and not as widgets. Smart businesses have already eliminated this term from their culture. For example, Southwest Airlines has a "Vice President of People". Southwest Airlines says that as a company, it is all about the people, and not about the planes. It's the people and their unique culture that is its biggest competitive advantage.

Do you realize where this term "Human Resources" comes from? It comes directly out of our industrial age, when machinery and capital investments were more important than blue-collar workers. People could be easily be replaced. So what if they worked in horrible conditions? Worked in factories for 10 hours shifts, six days a week, for a dollar a day? Or even died on the job?

Well, it's time for companies to wake up and get with the program in the twenty-first century! The leading successful business thinkers of our time realize that instead of "Human Resources" being the least important part of a successful company, it's actually the very very most important. There is no greater role for a CEO than to make sure the right people are in the right positions in the company. Just ask Jack Welch. In his writings and interviews, he acknowledges that that was his primary responsibility as CEO. And for further proof, read the book Good to Great by Jim Collins. He and his team researched what made the difference between a good company, and a company that made a transition to greatness. And the major conclusion of the book is that the first thing you do is get the right people on the bus. Then you figure out where to drive the bus. But getting the right people on the bus comes first!

On-brand visual identity

We here at EverythingCU.com are so excited to be growing so much that we are in the process of bringing on another visual print and web designer. Poor Josh is just straight out with so much work! We've got to get him help quick! Oh well. That's what happens when you are as talented as Josh is. :)

And that's got me thinking about another point which I think is vitally important for modern companies to understand. A point of differentiation between our branding agency and many others is that our design work is integral to our brand work. Great visual design is a direct result of brand strategy. It's not an add-on. It's not an afterthought. And it's not beautiful visual done in a vacuum-- by that, I mean worked on independently of the brand strategy. Of course I think our design is also gorgeous and visually engaging. The main point I can not overemphasize is that our visual design is integral, and flows naturally from, the brand strategy. That's something that is very, very hard to achieve when trying to build your own brand identity, or when trying to sharpen your branding efforts through multiple independent providers.

We love you too, Jen!

Wow. Wow. After an amazing week of intense brand foundational work with Cities Credit Union, here's what Vice President Jen Edlin had to say about our visit:

"Hi Morriss, Matt, and Josh - You've rocked our world. We weren't really sure what to expect and you certainly didn't disappoint. We are headed in a direction that we've never thought possible before (i.e. - personal relationship focused instead of number and product focused) and this new direction is much closer to our heart.

Thank you for your kind words about our people here. I doubt you'd ever say "Your people suck!" to a new client but I tend to believe we really do have top notch staff.

It was absolutely a pleasure to meet you and your staff. I can't wait to continue the process.

Jen Edlin - Cities CU"

It doesn't get any better than that! Thank you so much for the kind words, Jen! We're so excited to be working with you, and we can't wait to continue the process as well! We're looking forward to the next time we visit you again as well!

You rock too, Koren!

We are all so excited about the week of intense brand work we just completed for Cities Credit Union in Vadnais Heights (a section of St. Paul, MN). Here's what Koren Kent, Marketing Manager just said about our trip:

"Hey Morriss!!! We definitely miss you and can’t wait for you guys to come back!! Glad to hear you did have some fun in MN. I hope the flight home wasn’t so hard on Matt. I know I already told you, but I am going to tell you again. You guys have done such a great job! I knew that the brand process would be good - but I had no idea that it would be this good. I am so impressed with you, Matt and Josh. You really have a great thing going. I am so glad we are on full force with this. You will forever change our credit union! It’s Amazing!! Enough rambling – Hope you are having a great week! Talk soon, Koren"

Koren, all I can say is YOU rock OUR world! You have such an amazing team of people at Cities CU, and such a wonderful leader and role model in Scott... it is totally OUR pleasure to be working with you!

Madison virgin!

After saying goodbye to Matt and Josh at O'Hare, it was off to Madison for me, to visit my step-brother and his family, and also to meet Bonnie Rosenmeier and Jen Chavez at Dane County CU. I'd never been to Madison before, and I wanted to check it out as a possible site for this year's EverythingCU.com brand event.

Bonnie and Jen took me out to a FANTABULOUS brew-pub called Great Dane Pub and Brewing Company. They had an impressive selection of their very own brews. I had to check out the porter, and it was delicious! Bonnie and Jen told me all about their current branding efforts at Dane County CU, and even took me back to their headquarters to give me a sneak peek at their new brand positioning and new logo that they've just rolled out. Looking sharp!

Madison is a beautiful town! It has such a beautiful capital building that can be seen from all around... and it's incredible how it's situated on an isthmus between two lakes (the only such capital city in the country)... truly a wonderful sight. Stay tuned, and we will reveal the location of next year's brand event....

EverythingCU Branding Whirlwind hits Minnesota

Phew! What a trip! Just got back to Massachusetts after an incredible trip to the twin cities of Minnesota, with a stop in Madison Wisconsin on the way back!

The journey begins with the EverythingCU.com team of myself, Mad Tiger (Matt Taggart), and Josh Lynn meeting the wonderful folks of Cities CU of Vadnais Heights (a section of Saint Paul MN) at the Depot, a converted train station that was once the hub of transportation for Minneapolis, and is now home to two different Marriotts, a skating rink, and a water park. Our stay at the Depot was wonderful! Even the breakfast lady that we will never forget -- shrieking "GOOD MORNING!!!" at what seemed to be the top of her lungs to EVERY person foolhardy enough to enter the breakfast room. (While that might seem nice at first, it gets old really really quickly!)

Our brand journey with Cities CU starts with Koren Kent, Gnome 28 at the BBB. We were so ecstatic when we learned that not only had Koren framed her Branding, Bonding, and Brew diploma on her wall, she somehow managed to convince the entire CU to make the gnome into their PC's background image! And imagine our surprise and delight when we pulled up to Cities CU for the first time and read "Welcome to Vadnais Heights EverythingCU" in lights 60 feet in the air on their highway-visible LED read-out sign!

We had earlier contracted with Koren and Scott Olson, President of Cities CU to brand their credit union. And our journey began by presenting the foundation and fundamentals of branding to the management team of Cities - Scott, Koren (Marketing Officer), Jennifer Edlin (Vice President), and Mike Enright (Loan Manager). We also prepped them as to things to look for the in the first of the focus groups that were about to be held that night (Wednesday 1/11).

Then after pausing for a short breath back at our hotel at the Depot, it was time to go conduct the focus groups. Our first session consisted of White Bear Lake residents who had no affinity with Cities CU. It was enlightening to find out that despite the fact that Cities CU had spent tens of thousands of dollars on cable advertising for the past couple of years, they had ZERO recognition from this group. Although it was also wonderful to learn that after I revealed what a credit union was, and the fact that Cities was sponsoring this focus group because it cared what people in the White Bear Lake community think, interest in switching their accounts to Cities was so enthusiastic that Scott had to come out from behind the one-way mirror and introduce himself to the group! That shows not only how wonderful and genuine that Scott is, it also shows there is a huge pent-up demand for a financial institution that cares and trusts in the community that it serves. At least that's true in the White Bear Lake area of Minnesota. We also learned such valuable information from members culled from Cities' most valuable list, that we decided the NCUA ought to make it mandatory for all credit unions to conduct focus groups! It's always such an eye-opening experience! Cities' loyal members showed their obvious passion and concern for the credit union in a number of ways.

Thursday started bright an early with a presentation of brand fundamentals to the rest of the credit union staff. The trust and respect that this team had in Scott's leadership and management style was apparent. What a wonderful team to work with! After a short break in the afternoon, we headed back to the focus group facility for day two of the sessions. We learned a number of new insights, including that people are looking for an institution that stands for the same values that they themselves believe in. And how community participation can also be one way to demonstrate those values and make the connections. Koren and Scott immediately changed the way they think about marketing based on these sessions, and made some realizations about things they needed to change right away. Good stuff!

Thursday night we checked out the Town Hall Brewery. A quite impressive tin roof and fun atmosphere. We checked out quite a variety of the local brews on tap. Poor Matt was fighting a cold the whole time, but he managed to survive. What a trooper! It was fun being in the middle of the city that boasts the Vikings, the Twins, the Timberwolves, and the Wild (NHL).

The EverythingCU team started with the Cities management team bright and early on Friday morning for a discussion of what we had just learned in the focus groups conducted, and we decided on the psychographic characteristics of Cities CU's target member. Then we began the process of writing the first chapter of the credit union's story. We had a special moment when in the process of getting at the core of the credit union's values, Matt asked each member of the management team to describe the attributes of the other team members -- it became quite clear that this team has the utmost respect and trust with each other -- a truly special situation! And one not often found in credit union management teams today.

Then it was time to say goodbye to our new friends after a successful first trip on the Cities CU branding journey.

Our first little free space of time on the trip was Friday evening -- so we definitely had to check out the water park! It was a wonderland of fun -- a large hot tub area in one corner, a giant pretend train in the middle of it all with 3 slides coming out of it for all the kids... another area with a rope climb and a basketball hoop. Every 15 minutes or so, the bells and lights would go off and then a huge rush of water would drench the entire pool area. Poor Matt was still battling his cold, so Josh and I were the only ones to hit the pool -- and the slides! The exciting slide has stairs that go up about 3 floors in height -- and then the slide IMMEDIATELY goes outdoors -- crazy stuff in the middle of the Minnesota winter! -- but thankfully it didn't feel cold as it felt the same temperature as the water that was going down it. And then the very end of the slide dumped us back into the building -- what a trip! After going feet first the first time, Josh and I dove head-first on all subsequent trips down the tube.

Friday night we checked out downtown Minneapolis - cold, cold cold! (Although not as cold as it usually is in January!) We found an incredible American eating establishment called Mission that was quite modern. The food was truly amazing! If you visit the web site, be sure to check out the gallery. It looks really cool inside. Even though we decided that the ceiling was off-brand. Every detail counts! In walking downtown, we discovered Minneapolis' skyways -- enclosed glass walkways that connect most of the skyscrapers in the downtown core. What a great way to get around without freezing off important body parts!

The next morning Josh and Matt headed back to Massachusetts while I headed off to Madison, WI, so we said our goodbyes in O'Hare....