To grow noninterest income in today’s economy, credit unions must focus on the areas they can control—in particular, building deeper relationships with current and new members through a strong, transparent sales culture.
Bob Larson, financial support consultant for CUNA Mutual Group, engaged America's Credit Union Conference (ACUC) attendees in a Discovery breakout session about applying best practice strategies to grow noninterest income in a constantly changing environment.
“You will do better in today’s economy by focusing on what you can control, not on what you can’t control,” Larson said. “Start with understanding your current credit union membership as well as those who’ve just joined your credit union.
“During the past 18 months, credit unions have added a great number of new members,” Larson continued. “Credit unions need to make sure they tap into new members by cross-selling additional services: loans, debit cards, credit cards, bill pay, etc. The more services, the deeper the relationship."
To deepen member relationships, credit unions must ensure their sales culture focuses on building lasting member relationships. The four key components are:
►Champion: instill top-down management commitment and communication;
►Train: prepare staff to meet member needs with confidence;
►Coach: provide staff with consistent recognition and positive reinforcement to align management and staff behaviors to support credit union goals; and
►Track: inspect what you expect to obtain through quantifiable data for coaching, training, and making improvements.
A credit union’s sales culture should start and end with the member, Larson said.
“Let the member control the process because, as Roy F. Bergengren so said, ‘The most important service of the credit union is the education of its members in the management and control of their money"--and this is what ultimately drives your credit union’s sales culture,” Larson said.
Current market conditions have greatly affected credit unions’ earnings. So credit unions must explore every aspect of their income statement to leverage additional income and keep their revenue stream flowing. Larson added that members’ and credit unions’ interests have never been so well-aligned. Take advantage of this by aligning your sales cultures to meet members’ needs.
With the threat of rising interest rates, Larson recommended that credit unions develop a strategy to move some of the certificate dollars from their balance sheets to wealth management programs to improve the loan-to-share ratio. That will generate additional noninterest income in the form of gross dealer concessions for the credit union.
“The time to act is now,” Larson said. “Focus on your members, and the rest will come.”