Grow Wallet Share With Predictive Selling

Consumers aren’t borrowing, but they’ll refinance if offered a good deal.

April 1, 2012

How can a credit union boost its loan portfolio when consumers don’t want to borrow money?

By identifying loans members have elsewhere and getting them to move their business to the credit union, says Paul Leavell, strategic consultant for the Raddon Financial Group.

He says all loan types have leveled off or are in decline, due either to consumer deleveraging or account closures by financial institutions.

Unfortunately, many credit unions lack initiative on the sales side.

“Credit unions grew up as a workplace benefit—but they can’t have that mindset anymore,” Leavell says. “You need to be proactive in getting business.”

His advice for capturing more wallet share:

• Train staff to sell. Credit unions are hesitant to ask for members business, he says. “But if you don’t have a sales culture, you don’t have a service culture. Sales is service. Your ability to get loan business amounts to your ability to ask for it.”

• Identify opportunities. Gather business intelligence through credit data and other sources to see where members have their loans.

Five Steps to Boost Wallet Share

  1. Use business intelligence
  2. Examine what “service” really means
  3. Grow relationships by selling
  4. Examine transaction data for business opportunities
  5. Develop a relationship strategy.

In addition, Leavell advises pulling credit reports whenever new members open checking accounts. “This is the number-one thing you can do to increase loan volume. Even low-income people have loans.”

• Match your mission to consumer sentiment. Members want to pay off debt. Help them do so by refinancing higher-rate loans they’ve obtained from other providers.

• Implement auto loan recapture. Check members’ credit reports “as often as possible” to see if they’ve obtained auto loans elsewhere.

If they have, call them with a better offer. “Members don’t mind hearing from you,” Leavell says. “It should be part of your ongoing service efforts.”

• Focus on checking. It’s the gateway to cross-selling other services and it drives noninterest income.

“If you have a weak branch network,” Leavell adds, “focus on credit cards.”

• Identify members who are likely to leave. Determine which members’ deposit accounts have declined substantially—and call them.

“Just reminding members that you exist can help you keep them,” Leavell says.

• Charge members who don’t support the credit union. “A cooperative is like a potluck: Everyone must bring something to the table,” Leavell says. “If only 30% of your member households are profitable, 70% are eating for free.”

Leavell addressed the CUNA Marketing & Business Development Council Conference in New Orleans.