Source: Isamare/ShutterstockCredit unions talk about getting strategic, but how many are setting a comprehensive strategy and successfully executing upon it? From watching and listening to credit union leaders and strategic planning experts for decades, the answer is … not enough.
When employees understand their company’s role and mission – and credit unions often have lofty ones – those organizations experience a 29% greater return compared to other firms, according to a Watson Wyatt Work Study. Strategic planning, communication and execution are critical pieces to that success, but maybe it’s just too unwieldy to handle all at once.
Start small. Focus on one department, and then shift your credit union toward a broader strategy. Car loans have always been credit unions’ bread and butter, so it’s a great place to begin building your strategic muscle. The current climate, with inflated prices and supply shortages alike, adds new challenges to growing auto loans. Indirect loan growth was slowing even before COVID struck the U.S., as CU Times previously reported. Car loans are a staple on the credit union balance sheet. A comprehensive strategy can quench their drought.
So how can this overused term build into a relevance-maintaining approach across the whole institution? Auto loans are a perfect place to start.
It’s easy to get caught up “inside” our businesses and fail to see the forest for the trees. In the case of car loans, your members’ car buying journey is that forest. Let’s look from the outside in.
Buyers making non-impulse purchases move through various stages. When buying a car, people:
1. Decide they need a car (along with a loan) and start research (awareness).
2. Discover options for a car and financing and mull them over (consideration).
3. Find the car they want and – ugh, the loan they need. Time to make it happen (decision).
Buying a car is exciting! Getting a loan is the necessary thing to get what they want. And that’s where credit unions traditionally enter the car-buying picture – to handle the yucky thing a member needs to get what they want. Credit unions are not yucky!
A better strategy for credit unions is getting involved during the exciting phase of members’ car buying journeys. Be part of their vehicle and financing research … from the beginning. And infuse it all with the credit union mission. Consider this example:
Suncoast Credit Union ($14.8 billion, Tampa, Fla.) engaged its community through its Drive It Forward campaign, making a large splash with its members. In partnership with GreenProfit Solutions and our partner TrueCar, Suncoast earned an estimated $2.6 million in car loans in one month just through its white-label portal.
And, the credit union raised $10,650 for the Suncoast Credit Union Foundation, supporting the education, health and emotional well-being of children in their communities.
By leveraging an online car buying service, the credit union was able to insert itself into the buyers’ journey early. Consumers spend nearly three months researching vehicles before they purchase. During that time, they’re being courted by fintechs and online competitors. Connecting early ensures members understand the credit union’s competitive rates, great service and community mission.
Keeping members close and engaged with great tools throughout their consideration phase positions your credit union as a trusted adviser. Completing a loan pre-approval at this stage also helps stave off those competitors.
Be sure your online loan application process is frictionless and convenient. More than 90% of those applications are abandoned due to complexity and time to complete!
After deciding on a vehicle, financing is an easy choice. Because your credit union is a trusted adviser, you can educate your member about wealth-preserving protection products – GAP, vehicle service contracts and more – with credibility. Empowering members serves your financial wellness mission, while protecting credit union assets and driving additional non-interest income.
Just like that, your member and credit union have grown their relationship. And it all goes back to offering the right tool at the right time.
But what happens if your member financed elsewhere? (It happens.)
Your online car buying service ensures you know which members are in-market, and also who has purchased without financing at the credit union. This enables a hyper-targeted recapture campaign. Strategic at every step.
Credit unions are missing out on opportunities, whether it’s in auto lending or other core services. To better serve members while achieving the mission, take a strategic approach to improvement. Start in one area, like auto lending, to find the right path for your credit union, then expand the new culture across all departments. Don’t just talk strategically. Live it.
Joe WinnJoe Winn is CEO of GreenProfit Solutions, a provider of loan and income growth programs for credit unions and community banks headquartered in Plantation, Fla.
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February 28, 2022 at 10:00PM
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How Auto Lending Can Jump-start Your Credit Union’s Strategy - Credit Union Times
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