Healthy Growth in the Age of Economic Uncertainty

Bank collapses, recession forecasts, and rising interest rates, oh my!

If there’s anything we know for certain, it’s that uncertainty is here to stay. As much as we’ve tried to get back to “normal,” the volatility that Covid set in motion seems determined to wreak havoc on our best-laid plans.

This month, we’re excited to welcome Laurie Flanders, VP of Client Solutions at Strum Platform, and Ben Stangland, President & COO of Strum Agency and President of Strum Platform, to talk about what it means to know your members inside and out, why “friendly” is not a brand, and what kinds of stories and insights are emerging from credit union data.

They also address this month’s BIG question:

In the age of uncertainty, how can credit unions focus on healthy growth and long-term stability?

 

 

Key takeaways

1. Credit unions can’t be everything to everyone. The key is to create focus and add value, which requires understanding your members inside and out and being responsive to their evolving needs over time. When someone signs up for a 5-year CD it is like a 5-year “lease-to-own” relationship, and it’s your responsibility to convert them to a lifelong advocate before the CD matures.
2. Rebranding is not about reinventing a credit union, it’s about pushing a credit union to focus on what it already does well. But also: “friendly” is not a brand. Almost all credit unions say they offer friendly, top-notch member service. Brands may need to make some folks uncomfortable to really stand out to their target members… without painting a credit union into a corner.
3. Most credit unions say they serve the underserved, but their data says otherwise. If the average credit score of your member is above 700, it’s unlikely that you’re meaningfully reaching underserved populations. Laurie talked about a CEO at a previous job who said, “We need to make some bad loans!” The point was not to lose money, but to adapt products and policies to truly serve those who are underserved and not just the safest consumers. Credit unions should leverage their data to make sure they’re really walking the talk.

 

Read the full transcript:

Cameron:
Hello. And welcome to another episode of the Remarkable Credit Union podcast. We created our podcast to help credit union leaders think outside of the box about marketing, technology and community impact. Each episode we bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual, and provide you with actionable takeaways that you can use to grow your membership, improve the financial health of your cooperative, and magnify the positive impact you have in your community. Today’s big question, in the age of uncertainty, how can credit unions focus on healthy growth and long-term stability? I’m Cameron Madill, the CEO and Co-founder of PixelSpoke.

Kerala:
And I’m Kerala Taylor, the Senior Marketing Manager at PixelSpoke and also a co-owner. PixelSpoke is a digital marketing agency that works with credit unions to create beautiful, user-friendly, award-winning websites. As a certified B Corp and an employee-owned cooperative, we believe that business can and should be a force for good. I’m so excited today to be joined by Ben Stangland and Laurie Flanders. Ben is the president and COO of Strum. It’s a marketing agency that we’ve enjoyed collaborating a lot with here at PixelSpoke over the years. And Strum specializes in branding, marketing, strategy, campaigns and analytics for credit unions.

He’s also the president of Strum Platform, which we’ll get to in a minute, and he has been with Strum for over 25 years. Pretty impressive. Laurie Flanders is a newer addition to the Strum team. She’s the VP of Client Solutions at Strum Platform. And Strum Platform offers data insights that help financial leaders improve relationship building and increase marketing results. Laurie has over 13 years of experience in the financial services industry, including at PenAir Federal Credit Union, which is a PixelSpoke client, and All In Credit Union. Ben and Laurie, thanks so much for joining us.

Ben:
Thanks for having us here.

Laurie:
Thank you.

Kerala:
So I wanted to start with talking about member growth, which always seems to be a very hot topic for credit unions. Obviously growth is important, but I think there are also some pitfalls when it comes to focusing exclusively on growth. So in the spirit of our big question, how do you define healthy growth and what would you put forward as some examples of, perhaps, not so healthy growth?

Ben:
It’s a great question. I think what’s really fascinating about credit unions is we try to incorporate as many people as we can into the credit union and we try to be inclusive. And with that mission of inclusivity, it also has this dynamic effect of how are we getting people that are going to drive healthy growth to us? And what I mean by healthy growth is not just looking at profit, profit is important, but looking at the full relationship of what they’re bringing to the credit unions themselves.

And so one of the things that we actually work on quite a bit is helping our credit unions focus on types of members, so individuals and where their life stage is at, and helping them focus on how do we better serve those types of members that are bringing that overall relationship to us beyond just one product, beyond just an indirect loan or a CD that maybe they’re offering, but how do we create more value for those members to better engage them with our products and services? That is a challenge for credit unions because they want to be inclusive and they want to be everything to everyone. And having that conversation of creating focus is empowering because it creates this, it lifts this burden of, “We only have so many resources, I can’t serve everyone.” So If I have an idea of who I should be serving, I can focus my resources in that direction and build off of that, and that’s empowering, I think, to executives that are trying to figure out better growth strategies for their members.

Laurie:
Yeah, I completely agree. Ben said it so eloquently. I like to refer to it instead of everything to everyone as spray and pray. I think spray and pray is probably the worst version of marketing, especially in the credit union space where we pride ourselves on being good stewards of the members’ money. And if you’re being everything to everyone, you get spread very, very thin on what you are able to afford to be able to offer that to those members. And you lose a really big piece of intentionality and being really, really intentional about the member that you’re serving, what you are looking to do for them, whether that be through a campaign or delivering an additional location or consolidating a location even. When you start to get really, really intentional about who you’re looking to appeal to, things start becoming very obvious around where you should be spending those dollars. And in the spirit of being a good steward, you don’t want to have any leaky faucets.

Ben:
There’s a good story here. I have multiple stories of working with credit unions that want to have overall growth and the board will say, “You need to grow membership by X percentage,” and you pick whatever number you want there, and you can pull levers and push buttons to make sure that you’re going to hit that number. But those levers and buttons come with consequences if you’re not careful on the long-term stability of those members with the credit unions themselves. And what I mean by that is, my own example is, I have two teenage daughters, one is 18, so one’s a driver, one is 15, almost going to drive… A little scary.

And the 18-year-old when she turned 16 and she was at the point where she said, “I’m ready to have access to a car,” I wasn’t going to give her a car, but I wanted to have her have access to a car. And what that meant in my family was, dad was going to get an upgrade and she was able to then use my car at the time. So my car at the time, by the way, is a 25-year-old Volkswagen Jetta, so I’m not giving her a very fancy car here. So I went in and rate shopped for a loan two years ago. I have a 1.24%, 65 month loan on a car. You can’t find that now.

Kerala:
No.

Ben:
No, you can’t find that anywhere. So this credit union was hoping obviously to bring my full membership there on everything. Now, I’m using them for this product. This is not an indirect loan, this is a direct loan that I’ve rate shopped for, but they’re underwater on this loan. I’m not a good member as far as stewards of their capital there. So if you were to look at it and say, “How can I convert this person for more business?” Because every credit union is not like you are coming in and saying, “I don’t want to offer a low rate to your members.” You want to look at that full relationship, but how do you bring that full relationship over? You have to be speaking to me. You have to be targeting me. You have to be understanding where I am currently in my own life stage, and none of that happened. They were hoping that with the rate they’d put it in, it would hope I would just come over and it didn’t happen.

Kerala:
Yeah, that’s a great story. It reminds me of my first and only car loan in my 20s. It was an indirect loan but it was through a credit union, and I actually did not realize until I started working at PixelSpoke that it was even through a credit union. I had no relationship at all with this financial institution and I would’ve been a prime potential member. I was part of that younger generation that they’re always chasing after, and I didn’t necessarily, the only reason I was with my bank was because they had a branch on the main street of my college campus. It was so funny that I made payments to this credit union for six years and didn’t even realize that it was a credit union or really what else they did.

Ben:
One of the pain points too for credit unions is, in fact yesterday I was talking to a multi-billion dollar credit union and the Pacific Northwest and 70% of their new members are through indirect loans. And so when you start having numbers that big, you’re on this treadmill that there’s no soft landing for getting off that treadmill with feeding your own machine. And you have to be smart about understanding and talking to those members to begin with. But if you’re relying on that many indirect, unless I’ll throw in low rate CDs, it’s in the same category for you’re in the same catch where you’re offering one product, this is a low rate. You’re going to be in the same predicament unless you figure out, “How can I speak to those members? How can I be at the table? How can I help them beyond just this one product?” And if you can’t, you’ve got to think hard about, “Should I really be offering this product? Does it make sense for the organization as a whole or is it just a short-term win?”

Kerala:
Well, I feel like that feeds perfectly into my next question, which is about we know that healthy growth and long-term stability go hand in hand. There’s been so much volatility in our economy lately. Rates have been all over the place and it makes it kind of hard to think in the long-term. So I’m wondering, as credit union marketers start to plan for 2024, what long-term considerations should they keep in mind and how can they balance these with shorter term opportunities like for example, the high certificate rates we were talking about?

Laurie:
Yeah. I’m so glad you asked this question. I really enjoy this one. I am going to tee it up by telling you a little bit of a story. So I came to the credit union industry from the bank, but don’t tell anybody. And my first day I’m in this training class and we’re having some conversations about the credit union. They’re telling me all the things that I need to know. I mentioned something to the trainer at the time about deposit dollar and how we track and measure deposit dollar. And her immediate response was, “We don’t care about that.” And I was like, “What do you mean you don’t care about deposit dollar?” I was so confused because at the bank, if someone had a large amount of money on deposit and they were upset or going to leave the bank, we would move heaven and earth to try to save them.

And so I couldn’t understand why they didn’t care about deposit dollar. And as I learned more and more about the differences between credit unions and banks and how they each function, I learned why deposit dollar wasn’t as important at the time. In that training class that day, I went into a space where I started talking about the overall relationship and how while deposit dollar may or may not be important from a metric standpoint, it is important in the overall relationship of the member, and in their financial picture, deposit products play a very important role, just as important as their loan products. And if we were going to properly serve the member, we should have both, which to me is really the answer to this question. It’s genuinely about balance. It’s about instead of focusing on one product or another, it’s about finding a balance within your member and building deep relationships with them, understanding what that member’s needs are and having the right solutions to meet their needs to create a situation where you’re not focusing on one product or another.

At that time, when I joined deposit dollar was not something that was important. And for a long time in the credit union space, it really wasn’t something we talked about very much other than the entire relationship picture. Then all of a sudden deposit dollar became very important to all of our credit unions pre COVID, and we all started running after deposit dollar, and then COVID hit and nobody wanted deposit dollar. And then here we are again back at the same point where we were before looking for deposit dollar. And I find myself watching this pendulum shift back and forth as we run from one side of, I hate to say it this way, but like rats, one side of the cage to the other, chasing a piece of cheese. And the truth of the matter is, in a lot of cases and with a lot of credit unions, we are teeing ourselves up for what can only be described as a, we’re going to call it a really stressful time, at the very least. For some it could be disastrous as we chase after one versus another to avoid that.

And in those circumstances where chasing the cheese is unavoidable because of outside factors, you have to have a long-term strategy to couple with a short-term need. So when you have that five-year CD offer at 5%, I was laughing as we were talking about some of this with Ben earlier about, I look at those members as lease to own. You have leased that member for five years. You have five years worth of months to create a situation where that member wants to be in a relationship with you. It’s a lease to own. You want them to want to own a piece of the credit union and you want to be able to own a piece of their wallet share. And if you don’t couple one with the other, ultimately you’ll find yourself in a space where you enter into one of those very stressful times at the end of that five-year window.

Ben:
I think one of the things too that’s really important on Laurie’s story is really you have to create the situation. You have to own it. You can’t just be there. You have to create it. And what I mean by that is a lot of credit unions have with the economy, especially pre COVID, had just grown and not really done that much investment. And because they’re in certain pockets of the country that have grown, they’ve experienced and benefited from that overall economy growth in their market, unintentionally. You have to be intentional. We’re seeing consolidation with credit unions. We’re going to see more consolidation of credit unions coming up, especially those that are not being intentional and creating situations for that healthy growth. And it comes down to understanding your members inside and out and figuring out ways to service them better, the members you want to service, and also those that are basically you need to develop the products and saying, “This is how we can help our members for their own financial journey,” so you’re at the table.

Cameron:
Well, and I think that’s a perfect segue, Ben. For those who haven’t heard it, there was a podcast we did with Ben and Charlotte from the Strum team back in, I think, 2018. It was a long time ago. It’s one of the best, it’s evergreen content because it ties into this concept of, how do you go from a lease to own model to having that kind of deeper, longer term commitment? And I’d never heard this phrase before Ben talked about these moments of magic. We actually quoted this in a See You Inside article over the summer about lifecycle marketing. And what I like about that is there’s these moments where all of a sudden change as possible and sometimes there are moments of magic. There are things like getting married or the birth of a kid. Sometimes they’re also moments of, I don’t know what the negative one is, but where it’s like, I remember I had a back injury and all of a sudden if you wanted to sell me a chair, a bed, you name it, all of a sudden I went from a total non prospect to a highly engaged one.

So the idea that these are these moments when as we move through life, as we move through time, all of a sudden we’re open to a conversation about a deeper relationship. You can’t just call a current or prospective member up and have this deep conversation at any moment, but at these particular moments they’re very receptive. So I’d love to hear from either of both of you. Are there any examples you’ve seen recently of financial institutions that are really just being there in the right way at the right time for their members to deepen their relationship?

Laurie:
I love this question and not just because I think Ben’s cool, but I like the concept of the moments of magic. I think that’s a really powerful concept, and I think you spoke to it really well, Cameron. And the thing is that it is genuinely magical when a member or non-member for that matter, chooses the credit union, and that’s genuinely what they’re doing. They have an abundance of other choices and they choose you. And that’s a magical moment in and of itself. And in my past life, as I led other branches and branch leaders, I would tell my teams all the time, “When someone walks in the door and says they want to move their entire financial relationship to you, one of two things have happened. Someone somewhere who loves them very much and expects us to take care of them like family has recommended that they come here and join the credit union family or someone has done them wrong.”

It’s often more likely the second option, but it is our job to uncover that so that we can understand what we need to continue to do more of or what we need to make sure we don’t repeat because whatever it was has created a situation where they were willing to leave their PFI, which is a huge jump and it causes them a lot of work, so something happened to bring them through our doors. The funny thing is that the credit unions that I’ve worked with that have been most successful at really understanding and delivering on moments of magic really double down on the fact that moments of magic don’t just happen. Sometimes you create them. And in the credit union industry, we can often fall victim to the idea that people are just going to walk through the door. If they had a need, they would come here and tell us because they love us so much, we don’t need to do anything because they wouldn’t bank with anyone else because they’re so loyal.

And the truth of the matter is, that is a subset of your members, but there’s a large subset that is out in the world getting bombarded with opportunity to bank somewhere else every single day. And their magical moments are not less now than they were 20 years ago. The difference is how they’re getting those magical moments fulfilled. They’re not always walking in your doors. And if you are not looking to uncover and create magical moments at every single touch point that you have with a member, then you are missing opportunity.

I also think one of the really important things that those successful credit unions do is they don’t look at magical moments as just member focused. This is not something that is only tailored for the member. Magic happens inside your four walls first. This is an inside out thing. And teaching and having access to deep data analytics to understand the behaviors of your member and be able to recognize areas of opportunity is extremely important. This is something that has to be taught behavior. This is something that’s communicated every day in every meeting from the top down, and you’re all in the boat rowing in the same direction towards all of those magical moments.

Ben:
I agree completely. I think having those moments is being relevant and you’re not going to have those moments all the time, but making sure that you’re relevant in speaking to the members and where their needs are at currently, so you’re at least at the table and hearing them and understanding what their needs are, I think that’s so important. And I think it gets glossed over on, “I’m going to offer these offers to this particular member,” and they don’t need that and they don’t want that. And how does that make you feel when you are offered something from somebody that should know you intimately, should know all about you? This is banking relationships. They’re intimate because if you think about it, they know what you spend your money on, everything. And if you’re not speaking to them, how does that relationship feel to you? It doesn’t feel genuine.

It feels like you’re trying to sell me, and we don’t want to do that. We want to help. And so in order to help, you have to be relevant. And that’s really where the magical moments really happen is being relevant at that moment for that particular person so you can add value to them. If something happens to you that’s bad and if you want help, you’re going to turn to them and look for… And there’s lots of opportunities right now. I mean, there’s things happening in our world, there’s unfortunately the fire in Lahaina, what’s happened there. Giving back to that community, it’s not you’re giving back to expect something out of your give, you’re giving because you truly want to be supportive of this community.

You want to be part of that community. And that’s what’s beautiful about credit unions is saying they’re not just a financial institution, they’re part of your life. How can they be more part of your life and then help you with your own financial journey. By the way, I didn’t know that you wrote anything on my quote at all until this podcast, so I appreciate that. You probably told me, I just completely forgot about it, Cameron, so thank you.

Cameron:
The royalty checks are going to be flowing in any day now.

Ben:
No, I appreciate it. No, it’s great.

Kerala:
I think in a weird way, COVID represented a moment of magic. It was an extremely difficult anxiety ridden time, but it did present this interesting opportunity for credit unions to really show up for their members, and I think a lot of credit unions delivered. One of our clients sent out a survey and got like 8,000 responses, which they weren’t quite prepared for, but it just showed, hey, members really wanted to make their needs known and really wanted to be heard. And we just saw so many credit unions stepping up as far as adding new products and services to their mix, really stepping up their digital game, just finally having the incentive to invest in technology. And COVID is here to stay. We’re not really in a post COVID era, but we’re definitely in a time where things are sort of back to normal for better or for worse. And I guess I’m just curious, what is your take on where credit unions are at with their product and service mix and their technology? What do you see next for them? Are there any credit unions doing anything really interesting in these spaces?

Laurie:
I think that the credit unions that are winning the most in this area of technology and they’re bombarded with options. Credit unions have access to technology we could only have dreamed that we would have access to before, and we’re not always the fastest at making some of those transitions into new and exciting technology spaces. And so I think that the credit unions that are really starting to do this well are getting very, very intentional about understanding the member that they serve and what that member would like to have in their own technology journey. What does your member want access to, if your demographic is not a demographic that would accept well retina scanners on your ITEMs, then maybe this isn’t something you should invest in?

And so I think that you can go out there and get very overwhelmed with the options that are available to credit unions, and in the vein of being a good steward of the member’s money, I think understanding what would best serve their needs, what makes their life better, and going at that technology first is probably number one in making sure that you’re making the right investments in the right space at the right time. We have lots of FinTech friends out there and things that have really started to revolutionize the way that a lot of our clients are doing business and some fun stuff. And I can encourage my credit union friends and families out there to please, don’t be afraid to weigh it out and to understand the risk, but not to sit still because doing nothing is not a strategy either. You’ve got to get really intentional about what’s going to elevate your game here.

Ben:
I know that I always laugh because technology is changing all the time and people are trying to keep up with it. I think what’s interesting about the credit union industry is there are those that feel like they don’t want to be cutting edge, but they want to be fast followers. And I have to laugh a little bit about that quote because it’s either you’re cutting edge or you’re following. There’s no fast followers for any technology that’s out there. There’s pros and cons for both of those, obviously being cutting edge and following, but let’s be real and let’s be truthful about what we’re investing in. I think a lot of the technology that we’re seeing credit unions invest in now are things that they were trying to, at least the conversations I’m having, some of the things that they were trying to do a few years back and realizing, “Maybe this is taking a little bit longer than we thought,” and investing in having other third parties actually do it, which makes a lot of sense in my mind.

Partnering with the right types of third party providers is really important because again, I’m going to go back to my first quote when I was talking about overall focus and the amount of resources that a credit union has, only has so many limited resources and you want to put that focus in the right direction. I’m seeing lots of things like looking at alternative credit scoring, looking at data warehouses, creating those, looking at some interesting ones. We’re taking a traditional loan product and converting that into a deposit product, something that FINOFR is doing. They were RateReset before they’ve changed their name. We didn’t do their name by the way. So interesting technologies that are out there. Obviously, our platform is getting a lot of traction with just understanding the members and then activating that data for marketing automation and tracking the actual marketing ROIs on that, so those campaigns.

That’s been extremely important to our clients, to understand what’s actually working and what’s not working, and then be able to do AB testing or whatever tests they want and be able to see results on the backend in real time. That’s been exciting to see. So this is a fun time to look at how can we better service our members with looking at technology, but also you have to make sure that you’re investing in the right one, which is tricky. It’s not an easy thing to navigate because terminology too, if you’ve been in this industry, is very confusing when some person says, “In my digital transformation,” that can mean a hundred different things. So understanding and being able to have honest conversations with your partners is extremely important too.

Cameron:
I’d love to go in a slightly different direction from all this technology stuff, but I do want to show our audience, we did retina scan, Ben and Laurie, and they already they’re [inaudible 00:28:38].

Ben:
I love it.

Cameron:
Zoom will be doing that, I’m sure.

Ben:
Yeah.

Cameron:
So I know you guys do a lot of different things at Strum, but I think you’re most well known in the credit union spaces for your branding and creative work. And I know for our team, they’re always literally figuratively licking their lips when we get to work with one of your clients because we just know that the brand work is just going to be really beautiful and where you want it to be. So I’m curious in that area of what you do when you guys are working on a rebranding project circa 2023, how do you approach creating brands that will both stand the test of time, that foundation, but also can grow and evolve as you’ve been talking about Ben and Laurie, with just the inevitable change that none of us know exactly what form it will take?

Ben:
Yeah. Well, and I’m going to answer both your question, but this is a two part question. Looking at brands, we try to push credit unions to overall focus on what they do well. I can’t tell you how many rooms I’ve been in when the credit union said, “I want to be the friendliest credit union,” that’s what they want to be. That’s great, that’s a great aspiration, but what do you truly want to be for your brand? Everyone can’t be the friendliest credit union out there. I had one yesterday say they’re going to be the friendliest credit union in the Pacific Northwest. That was the answer to that question. So I think pushing past that and figuring out what to focus in, and the more uncomfortable the credit union feels normally, the better the brand. And that might sound a little uncomfortable for people, but that’s where you’re really going to stand out and you can’t represent everything to everyone.

You have to stand for something. You have to stand for something and have a rally cry around it that other people understand, can relate to, feel that community and want to build upon. And if you don’t have that, it’s watered down. And when it becomes watered down, you become ignored, just another financial institution and unfortunately become a friendly institution. So you have to push past those words. And that’s uncomfortable, it’s not a fun conversation with folks. It’s very hard to do. I was talking to Laurie about this before this podcast is, military credit unions are very tough to work with in this area when we’re looking at rebranding or even renaming because of so much heritage with the financial institution, what they’re bringing to the table. Your second parts of this question though is, how do we evolve with our brand? And I think that’s something that no one can really answer at the point in time when they’re building that brand. They realize that the brand will evolve. When I say PixelSpoke, what are the first things that I think about in my mind?

Cameron:
Friendly. No, I’m just kidding.

Ben:
Yeah, exactly. Friendly.

Cameron:
Well, maybe. I don’t know.

Ben:
Yeah. So when I meet you, what are my first things that come to my mind? How do I feel about your company? And all those things come in, besides the visuals, it’s how you feel. And so I think everything is fluid here and we can’t control everything, but we want to make sure that there’s a way, a path forward that we can evolve your existing brand into something else and look at it and say, “Okay, this is how we were at this point. This is how it’s evolving.” And we’ve done this multiple times. We’ve done this recently. We do this all the time. So it’s very common for us to do even a brand valuation. This brand currently represent you or not?

Cameron:
In technology terms, it’s like, you can’t predict the future, but you can make sure you don’t paint yourself into a corner.

Ben:
Exactly.

Cameron:
Trying to think through some of those future pathways, and I used to be a very unskilled painter in high school and I did that a few times. So I think we all know what that feels like.

Laurie:
Yeah. I have had the divine opportunity to sit on the other side of the table from Strum for a rebrand, and have gone through some of those conversations, those meetings that feel a little bit more like an argument than they do like a meeting. And when you come out on the other side after doing all of that deep work, it’s a beautiful thing to watch it all start to come together. But the best brands out there have gone into the uncomfortable like they were packing a lunch to have a picnic because they just knew that it was going to get ugly. But on the other side of ugly was something really, really beautiful and valuable and that’s what they were here to do. And creating that brand that stands, the test of time for me is behavioral. It’s a communication of the brand to every team member, every touchpoint, every channel delivery. It is cohesive across the organization.

I think that Strum can come in and hold your hand and help you, and build a beautiful brand and help you define what that is. If we leave, and on the flip side of that, you’re like, “Okay, cool. Slap that up on the wall and let’s move on,” then that’s what you’re going to be left with. And so I think that when those people get to together and they do that hard work, getting really genuine about who they want to be, it becomes ingrained in them. And we have to remember that years down the line, it still needs to be communicated. This is why we’re making this decision because it supports our mission, vision and values. It’s part of our brand story.

Cameron:
Yeah. I think I am pretty friendly, I’ve got to be honest guys. But I used to work with a business coach who used to tell me, he’d be like, “Listen, if you’re not feeling at least a little bit uncomfortable, you’re not even trying,” and it was the point that we all want to differentiate in the root of differentiation. The root word is different, and being different is uncomfortable, but it’s also a really powerful compelling thing when we learn that we can now uniquely deliver value to this subset of everyone who we could deliver value to in an even deeper, more meaningful way.

Ben:
I think that if everyone felt comfortable, it would be a pretty boring life. I think that you have to push yourself to feel a little uncomfortable to even grow as an individual, even outside of even a credit union brand itself. It’s pushing yourself into uncomfortable situations, whether it be a podcast with PixelSpoke, where you’re speaking live to speaking in front of other people. I think that’s the only way really we can grow as human beings.

Cameron:
Well, and I would like to add, not only is Laurie joining this podcast, she’s doing it from Florida with a hurricane approaching.

Ben:
There you go.

Cameron:
Yeah. Kudos for managing your whatever discomfort you may have. I’d love to chat, to wrap things up, about the Strum analytics platform and obviously at the core of that, you guys have access to all of this credit union data. And I’m curious, obviously, I’m sure individual client data is proprietary, but are there any interesting trends or insights that you can share with our audience from what you’re seeing and learning from all that data?

Ben:
Yeah. I’ll share a couple and then Lauren, I’m going to have you probably share more. One thing that’s very interesting for credit unions when I pull their data is there’s not an 80/20 rule with overall profit for members at a credit union.

Cameron:
Interesting.

Ben:
It’s more of a 95/5-

Cameron:
[inaudible 00:35:59].

Ben:
… so 5% and sometimes less of the credit union is driving 95% of the overall or sometimes over a hundred percent of the overall profit, and what that means is your bottom tiers are driving negative profit to the organization. So that’s sometimes a surprise to folks if they haven’t looked at their data and haven’t realized, and that’s why it’s so important, the very beginning of this podcast to have healthy growth, and how do we do that? And again, I don’t want, profit is one of those terms that some credit unions have problems talking about to be honest, and it is something that needs to be talked about. It’s not the only thing that should drive the credit union, but it’s a very important thing because it makes us all healthy organization so we can serve others. Laurie, do you have others?

Laurie:
Yeah, I completely agree with Ben. I think that profit can be an uncomfortable conversation in the credit union space, but it is such a valuable conversation to be had not only at the C-suite level, but throughout the organization because we make decisions sometimes to launch new products or to focus on a certain campaign based on a certain space and need for the member. It’s good for them to know whether this is something that is profitable or not profitable. We make choices at the credit union level sometimes to go after members we know are not profitable because it is part of who we are. Some of the trends that I have seen with some of our clients is the average age of member for quite a few of our clients has actually trended down, which I think is really cool. Feather in the cap of a huge initiative industry-wide to really start to appeal to a younger demographic, so I think that’s a really interesting trend. I’m interested to see how that continues as we see more and more active financial business from our generation Z, what does that look like?

So in addition to that, one of the trends that I see with almost all of my credit unions, if you ask a credit union, they’ll tell you that they serve the underserved and then they find out once they actually see their data that they don’t. If they find their average book of business in their loan portfolio is at a 7, 10 credit score, and if your average credit score is 7, 10 and “A” Paper and you pride yourself on serving the underserved, are you really serving the underserved? And I think that that’s something that’s really, really important. I think that we can make a lot of claims when we don’t have data on the things that we do. And I don’t think for one minute that those claims are made from a space of wanting to be misleading by any means. It’s just a lack of visualization of the actual penetration of the underserved into our credit union demographic.

And I once worked for a really great CEO who came in one day to a leader meeting and said, “I just looked at our collections numbers and our average FICO score on our loan book of business, and you guys need to go out there and write some bad loans.” And he didn’t mean he wanted us to go out and write bad loans. He meant that he wanted to challenge our thought process on who we were approving loans for because our mission, vision and values spoke to the underserved, but our actual outputs spoke to a very conservative lending matrix that did not lean into our mission, vision and values. And so I think that more credit unions are starting to have that realization and start to explore things like alternative lending models and how do they distribute that risk a little bit better so that they can be that credit union that serves the underserved.

Cameron:
Well, thank you for those great insights. It makes me think of, I always love that statement that profit is like air. No more than air is the purpose of life. Profit is not the purpose of business, it’s just a necessary precondition for survival. And I think of the famous, I’m sure it’s been said at lots of places, but REI cooperatives thing of, no mission, no margin. And I think that’s where bringing data to both impact, which is something we’re big believers of here at PixelSpoke as a certified B corporation, and then also the finances and that there actually can be… God, can I avoid saying synergistic? I don’t know. There’s a positive feedback loop between those two things when it’s done right and they both need to be paid attention to. All right, thank you. You guys have been wonderful guests. Very mindful, very thoughtful, very intentional. Let’s be mindless, let’s be impulsive. Let’s do some rapid fire questions. All right, Ben, if you had a different career, what would you do?

Ben:
I would be a business consultant. I love just talking to other people about businesses. Cameron, that’s why I like, honestly, having some of our conversations. But whether it was credit unions or not, I would be interested in learning and sharing insights that I’ve had, I’ve been blessed with. So I’d like to be a business consultant probably.

Cameron:
You would be great at it. Laurie, what about you?

Laurie:
I would be Olivia Pope. I don’t know if you’ve seen the TV Show Scandal. I would be a fixer in D.C. Because there is literally no drama in my life, so I would just go fix everyone else’s drama.

Ben:
She’s not seen Ray Donovan. I asked her about that after that question. I said, now I have a different light of you being a fixer. That’s interesting. Go watch Ray Donovan after this.

Cameron:
I’ll reach out to you whenever I’ve got drama in my life, Laurie. Laurie, what’s your favorite meal?

Laurie:
This is so funny. I’m a big soup girl for being in Florida. That doesn’t make a whole lot of sense, but I make a really mean tortilla soup. My family loves it. I end up having to bring it everywhere we go, so I’m a big soup person.

Cameron:
I love it. What about you, Ben?

Ben:
Cast Iron chicken. I’m trying to perfect it. My oldest daughter loves this dish as well. I’m cooking more of it because she’s almost out of the house, so enjoying that meal.

Cameron:
All right. Ben, what is the best advice you’ve ever received?

Ben:
Oh, this is a classic. This was marriage advice. So this is a good one. I received this advice that marriage is not 50/50. It’s a hundred percent, a hundred percent, and I truly believe that. If you think about other relationships, if you want to have them work going in with the full heart and with the expectations that other person’s going to put in as much as they can too, you’ll have a healthy relationship.

Cameron:
I love it.

Ben:
There you go.

Cameron:
All right. Laurie, what about you?

Laurie:
So it’s funny, I wanted to think this through, but in the nature of rapid fire, I was given some advice when I was younger by my dad around accountability. And he said, “We run at the problem.” And as I have gotten older and in my professional life, I’ve always thought about it as running at the problem, run at the problem regardless of what it is. And I once heard a story about the buffalo and how buffalo they deal with rain and storms. And unlike cow, they run at the storm instead of away from it, whereas a cow runs with the storm and gets rained on, the buffalo will run through it to the other side. And so my best advice that I’ve ever been given is be the buffalo and just run at the problem.

Cameron:
Be the buffalo. I love it. Then last question for each of you. What’s one place you’d like to visit that you’ve never been to?

Ben:
Portugal. So wife’s been talking about it for a while, never been, would like to go. So if you’ve gone, give me advice.

Laurie:
For me, Austria. I made a promise to my late stepdad that I would go and visit. It was one of his favorites and I haven’t been yet, but I will be going.

Kerala:
I’ve spent some time in Austria but have not in Portugal, so I’d love to revisit both places. Let’s do our final take. If you remember our big question today was, in the age of uncertainty, how can credit unions focus on healthy growth and long-term stability? So I’m just wondering in a few sentences if you guys can summarize your thoughts on this question.

Ben:
Sure. I’ll start. I think understanding your member is key, just period. You need to know your member more than just dollars, balances. You need to know about them. So whatever information you can pull in, that’s what you’re going to use to better serve them. So focusing your organization around that member that you want to bring in, this is not just a marketing initiative. I know this podcast is technology and marketing, but this is not just marketing and this is organization. So how do we shift the whole ship to create focus for the right type of member coming in? That’s extremely important.

Laurie:
Yeah, I agree. And to add onto that, I would say water your own grass. Each and every one of these credit unions has a wealth of opportunities sitting right under their nose and their own membership. A lot of our initiatives talk about onboarding new members, onboarding new loans from new members, and how do we maximize a new member? And the truth of the matter is that if we were all maximizing the members that are already sitting inside of our organizations, we would have a lot more resources to be able to serve our communities.

Ben:
We actually call that re-boarding, believe it or not. There you go.

Kerala:
That is so great, and I especially appreciate it. We of course, think marketing is important and we speak to a lot of marketers, but a lot of what you’re talking about goes well beyond the Marketing team. Well, Ben and Laurie, thank you so much for joining us today.

Ben:
I appreciate it.

Laurie:
Thank you guys.

Ben:
[inaudible 00:45:41].

Kerala:
All right, folks. It’s time to try to distill this fascinating conversation down into three key takeaways, which is always hard. But let’s start with this notion that credit unions can’t be everything to everyone. It’s tempting, but the key really is to create focus and add value. And that requires understanding your members inside and out, and being responsive to their evolving needs over time. So when someone signs up for, say, a five-year CD at 4%, great, you got a new member or you got a member who’s signing up for an additional product, but it’s more like a five-year lease to own relationship, and it’s your responsibility to convert them to a lifelong advocate before that CD matures. A second takeaway is that rebranding is really not about reinventing a credit union. It’s about pushing a credit union to focus on what it already does well, and also friendly is not a brand.

This is something we say time and time again to our own clients because almost all credit unions say that they offer friendly top-notch member service. That’s great and that’s important. But as far as branding goes, you might even need to make some folks uncomfortable to really stand out to their target members. And of course, it’s a delicate balance because you also don’t want to paint your credit union to a corner. And lastly, most credit unions say they serve the underserved, but their data might say otherwise. So for instance, if the average credit score of your members is above 700, it’s unlikely that you’re meaningfully reaching underserved populations. I love Laurie’s story about a CEO at a previous job who came in and said, “We need to make some bad loans,” and the point here was obviously not to lose money, but to see about adapting products and policies to truly serve those who are underserved and not just the, quote, “safest,” unquote, consumers.

So credit unions should leverage their data to make sure they’re really walking the talk. Well, thanks for joining us today for another great episode. The Remarkable Credit Union is brought to you by PixelSpoke, a digital marketing agency that works with credit unions to create user-friendly, high converting, award-winning websites. As a B Corp and worker-owned cooperative, we believe that business can and should be a force for good. You can learn more and check out our work at pixelspoke.coop. That’s pixelspoke.coop. Until next time, I wish you the best of luck in making your credit union remarkable.