4/8/2013

Annual Convention and Exposition

#mculace

Key Lending Strategies  y g g For Growth, Profitability,  and Retention May 16, 2013    1:15 – 2:15 p.m. Facilitated by Celeste Cook cuStrategies LLC Sponsored by ©cuStrategies LLC 2013

www.mcul.org

Unlocking Your Potential for Growth!!! • Understand how to maximize growth and profitability  through a holistic management/leadership approach  • Learn what you can do to maximize your most  powerful marketing resources to grow your credit  union • Explore strategies to increase membership and loan  growth • Discover creative strategies to attract and retain more  members (even your disgruntled members) b ( di l d b ) • Learn what you can do to build stronger relationships  with every member, capture more loan opportunities,  and increase profitability www.mcul.org

#mculace

1

4/8/2013

Experience the  Proactive Lending Paradigm Shift! • “Now is not the time to continue doing what  we have always done!” • “In the midst of change lies opportunity!!!”

Rethink Outthink Innovate! Rethink…Outthink…Innovate! Source:  Mark DeBellis, PSB Integrated Marketing, Reflections through the Windshield

www.mcul.org

#mculace

The $10 Million Dollar Question!!!

What can we do Wh t d differently or better to  ensure loan growth and  profitability??? fi bili ??? www.mcul.org

#mculace

2

4/8/2013

Take Your Credit Union  to the Next Level

Transform Your Transform Your Credit Union for … Growth, Profitability, and  Retention!!! www.mcul.org

#mculace

People Helping People

Focus On Focus On People!!! ((not just members!!!) j ) www.mcul.org

#mculace

3

4/8/2013

Building Your Lending Brand

“It It is the service is the service we are not obliged to give that customers value most.” Quote from James C. Penney, Customer Love

www.mcul.org

#mculace

Number One Responsibility  of Every Employee!

Grow The Credit Union!!! www.mcul.org

#mculace

4

4/8/2013

Key Leadership Strategy • Understand the dynamics of the economy and  d d h d f h d the impact it is having on credit unions as well  as banks so you can establish and maintain a  holistic leadership approach to greater  financial strength and growth!!! g g

www.mcul.org

#mculace

Snapshot of U.S. Economy US Economic Profile • The unemployment rate in the United States   h d has decreased from 9.9 percent in December  df 99 ti D b 1 2009 to 8.3 percent as of March 2012. • Bankruptcies2:    – 2008 ‐ 1,117,771  – 2009  2009 ‐ 1,473,675       1 473 675 – 2010 ‐ 1,593,081 Source: http://data.bls.gov/timeseries/LNS140000001  April 22, 2012 Source:  American Bankruptcy Institute, http://www.abiworld.org. 2 August 15, 2011

www.mcul.org

#mculace

5

4/8/2013

Golden Opportunity!!! This is a  “Golden” Opportunity For Credit Unions!!! WHY??? www.mcul.org

#mculace

Snapshot of  Michigan Credit Unions • • • • • • •

Number of CUs  Federally chartered Federally chartered  State chartered  Average size  Total assets  Members  Membership/Population Membership/Population 

309  117 192 $134.8 $41,641.0 4,441,628 45 0% 45.0%

Your Opportunities:  55% of Population!!! Source:  CUNA:  http://www.cuna.org/download/factsheet/Michigan.pdf 04.05.13

www.mcul.org

#mculace

6

4/8/2013

Snapshot of  Michigan Credit Unions vs. Banks Average Interest Rates  Product • • • •

CREDIT UNIONS

One‐year certificate  Money market accounts  Auto loans  Classic credit card  Classic credit card

0.47%  0.18%  3.34%  11.64%  .64%

BANKS 0.38% 0.14% 4.25% 17.25% 7. 5%

Source:  CUNA:  http://www.cuna.org/download/factsheet/Michigan.pdf 04.05.13

www.mcul.org

#mculace

Key Leadership Strategy Grow Better…Bigger will follow!!!

Map out a holistic approach  to growth to ensure  successful loan growth and successful loan growth and  profitability www.mcul.org

#mculace

7

4/8/2013

Map Out A Holistic Leadership Vision… Leading and Supporting  Relentless Growth Credit  Union  Union Brand  (Vision)

Talented  Talented People

The Right  The Right Metrics

Sales and  Sales and Service  Culture

Market  Your Brand (Vision) 

Salaries  and  Incentives

Member‐ ship  Growth

Reinforce‐ ment Strategies

Remove  barriers to  deliver  brand

Develop  Leadership

Loan  Growth

www.mcul.org

Member  Retention Strategies

#mculace

Map Out Your Strategies

For Growth, Profitability and Retention! A holistic approach to driving growth and retention! Credit Union Strategies

Sales Initiatives

Goals Accountability A bili

Training

Reinforcement S Strategies i

WOW Programs WOW Programs

Branding/ Marketing

Sales and Service Initiatives

Reward Programs

Reward  Programs

www.mcul.org

Employee Programs

Member Programs

#mculace

8

4/8/2013

Key Leadership Strategy Turn Your Vision into Action • Develop your Holistic Vision and transfer it into a  well‐organized practical step‐by‐step action plan well‐organized, practical step‐by‐step action plan  that includes: – Strategic Plan:  Your Vision is a living, fluid plan – Strategic SMART Goals:  Create focus on Vision!!! – Action Steps:  Bring Vision to Life!!! (no more than 3  steps for each Action Plan Item) – Activities for each Action Step (no more than 3) – Time Lines (mandatory but not written in stone) – Measure and track success (a must!!!) www.mcul.org

#mculace

Strategic SMART Goals

•S •M •A •R •T www.mcul.org

#mculace

9

4/8/2013

Measure/Reward the “RIGHT” Results Credit‐Union Wide CSF’s that drive growth, profitability and retention • • • • • • • •

Loan Growth* h* Loan Yield vs. Delinquency Ratio* Membership Growth New Checking w/ e‐Statements Checking Penetration Cross Sell Ratio  ll Debit Card Signature‐Based Transactions Bill Pay (#1 Retention Tool)

www.mcul.org

#mculace

Measure/Reward the “RIGHT” Results Individual Level CSF’s that drive loan growth and retention • Credit Score Analyses (CSA’s) C dit S A l (CSA’ ) • Loan Steals from the Credit Report  • Mortgage/Auto Loan/Checking Closed  Referrals  • New Checking with E‐Statements/Bill Pay g / y Establish a Minimum Goal for every position!!! www.mcul.org

#mculace

10

4/8/2013

Proactive Lending

Strategies that bring you  Strategies that bring you more loans and  increased profitability!!! Give Members and non‐members a reason to do  business with your Credit Union!!! www.mcul.org

#mculace

Risk-Based Lending Strategies • Price slightly below the competition!!! • Price for profitability according to the risk level Price for profitability according to the risk level • Establish an “as low as” marketing rate (24‐ month term) to attract all members and potential  members to your credit union! • Market to “Good” Bankruptcies and C, D, and E  Paper with a “Fresh Start Program” including a  S Secured Credit Card” d C dit C d” • Market to people in communities or SEGs for  auto refinance opportunities www.mcul.org

#mculace

11

4/8/2013

Creative Lending Strategies Consider Bankruptcies!!! • Recent Recent bankruptcies may be a good  bankruptcies may be a good risk!!! – No debt – Can’t file bankruptcy again for 8 years under  new bankruptcy law p y – Earn higher yield on  loans 

www.mcul.org

#mculace

Target “Good” Bankruptcies Good Indicators for Recent Bankruptcies

– Bankruptcy due to medical, divorce, or job  Bankruptcy due to medical divorce or job loss/income loss – Always paid before the bankruptcy – Same address or at address for minimum 2  to 3 years prior to bankruptcy – Same or similar occupation for 2 to 3 years  l f prior to bankruptcy – Comparable salary or low DTI and UDTI www.mcul.org

#mculace

12

4/8/2013

Turn High Risk Members  into Profitable Loyal Members • Offer the Fresh Start Program w/ secured credit  card – Secured credit card (can offer a quick bounce back of credit  score—up approximately 85 points*) – Checking with e‐statements – Auto loan 80% LTV or 100% LTV – 1/4 % discount rate with payroll direct deposit into checking  with e‐Statements – 1/4  % discount rate with automatic loan payment p y – With good payment history for 6 to 12 months we will  refinance auto loan at lower interest one time during the life  of loan if credit score improves *Guesstimate

www.mcul.org

#mculace

Proactive Lending Philosophy

Develop a Proactive Develop a Proactive Lending Philosophy To Capture More Loans!

www.mcul.org

#mculace

13

4/8/2013

The Key To Success… More Loans…More Revenue!!! A proactive lending philosophy that drives: – Better loan decisioning – More loan opportunities – Higher Yields – More profitable members – Member loyalty for life‐‐PRICELESS!!!

www.mcul.org

#mculace

The Credit Union Difference

We work hard to  We work hard to save PEOPLE hundreds of  thousands of dollars  during their lifetime!!! www.mcul.org

#mculace

14

4/8/2013

Helping People Save  Hundreds of Thousands of Dollars!!! 700 Score L Loan Amt. A t $25,000 $25 000 Term 60 Months Rate 7.25%* Payment $498.02 Total Pmts. $29,881 $ ,

$37,482 ‐ $29,881 = $7,601 Savings to Member!!! *Arbitrary interest rates not reflective of any particular financial institution’s interest rate.

www.mcul.org

#mculace

Cultivating A Proactive Lending Philosophy No matter what the member requests, always  respond with: d ith

“Absolutely, let me see  what I CAN DO for you!!!” www.mcul.org

#mculace

15

4/8/2013

Cultivating A Proactive Lending Philosophy

Never respond to  Never respond to the member’s request! Respond with the  RIGHT SOLUTION!!! www.mcul.org

#mculace

Cultivating A Proactive Lending Philosophy

Turn Every Unsecured Loan  Turn Every Unsecured Loan Request Into a  Secured Loan! Review Your Recent Unsecured Loan Request  Denials!!!  Why? www.mcul.org

#mculace

16

4/8/2013

Turn Unsecured Loan Requests into Secured Loan Requests • • • •

What are you driving? What are you driving? What year is your car? Do you have any other cars? Do you know the value of your home? Never ask member if they want to  collateralize their auto?

www.mcul.org

#mculace

The Proof Is In The Pudding!!! • We turned “another” unsecured request into a  “SECURED” SECURED  Solution!!!!! Solution!!!!! This member initially  This member initially applied for a personal loan and was on Eric’s DENIIALs  for January….Eric worked his denials; called the  member and after asking the member WHAT she is  DRIVING – he went a step further ‐ even though he is  not as familiar with the COMAKER loan he offered the  loan and mailed the documents to the member… • Maddie was able to finish the loan at the Charlotte  office… Source:  cuSrategies’ Credit Union Client

www.mcul.org

#mculace

17

4/8/2013

Proactive Lending Philosophy

TTurn Loan Officers Into  L Offi I t Proactive Financial  Solution Partners!!! www.mcul.org

#mculace

Role of  Proactive Financial Partners • Never deny a loan again…Defer it!!! ALWAYS focus on what you CAN DO on what you CAN DO for for the member  the member • ALWAYS focus today!!! • Sit next to your member to review the credit report • ALWAYS focus on the positive stuff first in the credit  report!!! • Show your member what has impacted their credit  p g y y report negatively and what they can do to raise their  credit score • Steal every loan opportunity off the credit report that  isn’t a credit union loan! www.mcul.org

#mculace

18

4/8/2013

Role of  Proactive Financial Partners • Proactive Risk Assessment:  Identify if you have a low  risk or high risk member without using the credit risk or high risk member without using the credit  score • Turn your high risk members into low risk members • NEVER tell your members to come back in six months • Close your high risk members differently than you  close your low risk members—Be HONEST AND FIRM • ALWAYS ASK for Referrals every time with every  member!

www.mcul.org

#mculace

Capture Auto Refinances From Other Financial Institutions

How would you like to lower your  H ld lik l monthly auto payment today? (Ask if member DOES NOT have  auto loan with CU) www.mcul.org

#mculace

19

4/8/2013

Credit Union Success Stories

90+ loan opportunities  captured within an 8‐hour  period through staff!!! p g Mobiloil FCU

www.mcul.org

#mculace

If Auto is Paid For…

How would you like to get  How would you like to get rid of high‐interest rate  credit card debt?

www.mcul.org

#mculace

20

4/8/2013

Credit Union Success Stories • 45 auto loans closed in one week l l d k • 1 auto loan captured through drive‐thru in  less than 5 minutes PSCU Credit Union

www.mcul.org

#mculace

Teller Recapture Strategy 130+ loan opportunities (signed loan  mini‐applications) captured in one  day in one branch!!!* *Existing members who had loans financed at  other financial institutions other financial institutions Premier FCU

www.mcul.org

#mculace

21

4/8/2013

Proactive Lending Philosophy

Never deny a loan  Never deny a loan again… Defer it!!! Defer it!!! www.mcul.org

#mculace

The ugly duckling today could very well be  a beautiful swan tomorrow!!! Examples • John goes from 573 to 728 in four months • Andre goes from 561 to 625 in less than four  months • Michael goes from 656 to 712 in less than one  g month

www.mcul.org

#mculace

22

4/8/2013

Proactive Lending Strategies Capture more loans with… • Credit Score Management Seminar – Learn how you can manage, protect, and  raise your credit score – Learn what impacts your credit score and  how your credit score impacts you – Learn what hurts your credit score L h h di – Learn what you can do to raise your credit  score www.mcul.org

#mculace

Proactive Lending Strategies Capture more loans with…

FREE Credit Score Analysis  Today! One‐on‐One Personal Consultations!!! www.mcul.org

#mculace

23

4/8/2013

CSA Results August ‐ November 2011 • Number of CSAs conducted:

827

• Number of loan opportunities  captured due to CSAs:  

574

PSCU www.mcul.org

#mculace

Key Leadership Strategy

Use your most powerful  U t f l resources g to drive growth!!!

www.mcul.org

#mculace

24

4/8/2013

The Power of Business Development • • • • •

Hire the right people (absolutely critical!) Hire the right people (absolutely critical!) Develop the right programs Establish the right goals Reward the right results…loans!!! Network…Network…Network!!!

www.mcul.org

#mculace

The Power of Employees… Your #1 Marketing Resource!!!

• $100 for every loan you refer to the  credit union (over $5,000)

www.mcul.org

#mculace

25

4/8/2013

The Power of Your Members! Your second most powerful resource!!! 

• $100 for every new and/or refinance  loan referred to the credit union!!!

www.mcul.org

#mculace

Member Reward Programs • Target B, C, D, and E Members!!! d b !!! • Target 70 percent of the market who have  loans with banks!!! Refinance today and lower your monthly  auto payment and get $200 cash back!!! t t d t $200 h b k!!!

www.mcul.org

#mculace

26

4/8/2013

Member Reward Programs • $100 Auto Loan Referral Program $50 Checking w/ e‐Statement Statement Reward and  Reward and • $50 Checking w/ e Referral Program  • $100 Auto Refinance Promotion • Match or beat policy on auto refinances • $100 Auto Loan Preapproval Program • ¼ percent discount on auto loan with  checking, e‐statements , and payroll direct  h ki t t t d ll di t deposit

Money/Savings can motivate!!! www.mcul.org

#mculace

BEST TIP OF THE DAY!!!

HAVE V FUN ALONG THE WAY!!! www.mcul.org

#mculace

27

4/8/2013

FUN Sales Initiatives for Serious Results!!! • Headshaving Ceremony – Loan Loan Volume Doubled from $10 Million Volume Doubled from $10 Million+ to over $20  to over $20 Million+ and CU has sustained comparable loan growth  for over 12 months

• $20 Bills for Tellers for signed mini apps for auto loan  refinances from another financial institution – 130 signed mini loan apps in one day in one branch – 16 signed mini loan apps in 4 hours in one branch on a  W d d Wednesday

• SurPRIZES and Fine Dining Experience – 23 checking accounts opened in 2 days (previously  averaged 5 checking accounts per week)  www.mcul.org

#mculace

Annual Convention and Exposition

#mculace

Celeste C. Cook CEO/Founder, cuStrategies LLC cccook@cu‐strategies.com 404.783.5898

www.mcul.org

28