At its heart, business development is about partnerships, consultant Rich Jones, president/CEO of Leading2Leadership and former credit union business development professional, told attendees of a recent Business Development and ROI (return on investment) Roundtable hosted by the CUNA Marketing and Business Development Council.

When developing partnerships with businesses, credit unions leverage the partnership between employers and their employers, Jones said.

“The real challenge is how to develop a presence inside that company,” he said. “Not a physical branch presence, but a presence for sales and marketing so we can access prospects within and leverage the employer-employee affinity.”

Jones outlined six key performance indicators credit union business development representatives can use to measure success:

1. Member growth

One way to measure member growth is to track conversations with member groups and recording subsequent increases in deposits or loan balances, Jones said. Most core processing systems should offer this capability.

“Making that information part of your core system is part of the process,” Jones said. “Work with your information technology staff to make sure you can get that information out the system and get credit for the relationships you’re building.

“Member growth creates economies of scale,” he continued. “If we’re not creating economy of scale, we’re setting ourselves up to be merged in the near future.”

2. Balance growth

Business development must drive core deposits, which members are less likely to “shop” with other financial other institutions as they often do with share certificates, Jones said.

Business developers must track when business partners make deposits to identify opportunities to recruit more employees as members.

“One of the best sources of low-cost funds is a checking account,” Jones said. “They’re stickier than share certificates and most savings accounts. Most chief financial officers will take all the checking deposits you can bring in.”

Credit unions should track loan balances within the core system by the member’s business partner affiliation, Jones said.

3. Member engagement

This typically is measured by balances per member/household and products per member/household.

Most credit unions have around three products per member, Jones said. He identified “product” as anything with a balance or the capability of having a balance.

4. Capital ratio

The credit union movement’s overall capital-to-assets ratio was 10.5% as of April 2016, according to CUNA’s economics and statistics department.

Capital ratio is driven by retained earnings. “Think about how you can drive economies of scale by leveraging relationships. That will drive capital growth,” Jones said. “If you’re able to talk with 100 people at a lunch-and-learn and convert them to balance-holding members, you’re creating economies of scale.”

5. Loan-to-share ratio

Most credit unions seek a loan-to-share ratio of 80% to 90%. This ratio tells business development professionals which types of balances to pursue.

“You should always go after checking accounts, then determine where to focus the rest of your energy,” Jones said. “The checking account is the engagement account.”

6. Average balance per member

Jones described how credit unions can append members’ reports into their core systems to determine the average member balances held outside the credit union.

Doing this “shows where your opportunity lies,” Jones said, and allows credit unions to “be more strategic in where you focus your business developer’s time.”

Pursuing key performance indicators is the business developer’s opportunity to influence the bottom line, Jones said.