SEG Development Eric Gagliano MarketMatch SVP, Client Management [email_address] 866-501-2233 x106
Last Year <ul><li>Creating a BD Plan </li></ul><ul><ul><li>Positioning & Goals </li></ul></ul><ul><ul><li>Market & Competi...
Today’s Topics Best Practices from CUNA Award Winners Departmental Structure Maximize the “Honeymoon” Speaking the CEO’s L...
Resources <ul><li>Best Practices from CU Professionals </li></ul><ul><li>What do banks do </li></ul><ul><li>Brain Storming...
SEG Acquisition
Sean McDonald 
Director, Business Development & Marketing 
Liberty Savings Federal Credit Union Jersey City, NJ 2008 SEG A...
Challenges <ul><li>Getting past the gatekeeper for an appointment with decision maker </li></ul><ul><li>Explain why the CU...
<ul><li>“ We’re finding that it seems to be becoming harder  for banks to get into companies.  Business owners  are weary ...

 
 
Before the SEG Signs <ul><li>Research  company’s clients  (website, Google, press  releases, etc).  If company has common ...
There Is No Magic Bullet
<ul><li>“ BD Professionals need to find ways to effectively build relationships.  Get them to know YOU.  I try to help a S...
After the SEG Signs <ul><li>Arrange on-site to speak to  all staff  (staff meeting, training session, financial literacy s...
<ul><li>“ On-sites are fine but they need to be advertised AND endorsed by the decision maker.  Sitting in a cafeteria or ...
 
Lessons Learned <ul><li>When dealing with a SEG owner/decision maker, you need to realize that they, themselves, may have ...
Lessons Learned <ul><li>You’ll lose contact with your SEGS overtime if new employees are not communicated to.  Getting in ...
Results <ul><li>“ We’ve always had better success making an  ‘in-person’ pitch rather than a direct mail piece or cold cal...
SEG Penetration
Nancy Hutchinson
SVP Marketing/Business Development
Minnesota Power Employees Credit Union
Duluth, MN 2009 SEG Recruitment...
SEG Recruitment & Retention Plan <ul><li>Build relationship with company </li></ul><ul><li>Recruit employee members </li><...
Company Relationship  <ul><li>Implement a written CU/SEG agreement </li></ul><ul><ul><li>Credit Union Exclusivity  </li></...
Company Relationship  <ul><li>Position the CU as an employer profit and benefit enhancer </li></ul><ul><ul><li>401K contri...
Company Relationship  <ul><li>Explain the greater business services opportunity </li></ul><ul><ul><li>SEG Related Seminars...
Company Relationship  <ul><li>Demonstrate that employees want financial education </li></ul><ul><li>Build effective employ...
Recruit Members <ul><li>Incent  member enrolment , not contracts produced </li></ul><ul><ul><li>MPECU targets 4-6 products...
Lifestage Marketing
Community Outreach <ul><li>Pursue a special SEG strategy if yours is a community credit union </li></ul><ul><ul><li>“ Join...
“ A SEG must be carefully managed and promoted.  Credit unions cannot take for granted that once recruited, a SEG employer...
Results <ul><li>After 12 years of this process, MPECU has enjoyed: </li></ul><ul><li>Membership has grown by 41% </li></ul...
On Boarding
Why is On Boarding Important? <ul><li>According to Frederick Reichheld, author of  “The Loyalty Effect” </li></ul><ul><ul>...
“ Quality in a service or product  is not what you put into it. It is  what the client or customer gets  out of it.” - Pet...
Why is On Boarding Important? <ul><li>Most cross-sell opportunities come in the first few months after </li></ul><ul><li>c...
“ You’ll never have a product or  price advantage again. They  can be easily duplicated, but a  strong customer service cu...
What NOT to do…
Customer Lifecycle <ul><ul><li>Target  – Prospective customer stage, targeting with specific products/services </li></ul><...
What’s At Stake? “ Only 26% of the average bank's customers will consider it for their next purchase, and few will look to...
On Boarding is Critical <ul><li>90 Day Window </li></ul><ul><li>Trust the Process </li></ul><ul><li>Manage Expectations </...
Time is of the Essence
Internal Promotion Example
“ Do what you do so well that  they will want to see it again …  and bring their friends.” - Walt Disney
BAI- 90 Day Window of Opportunity Report
The Potential Results…
Communication Methods <ul><li>Schedule Example (90 Days): </li></ul><ul><li>  - 1-2 Day </li></ul><ul><li>  - One Week </l...
Communication Methods
“ Treat every customer as  if they sign your paycheck …  because they do.” - Unknown
Communication Methods <ul><li>Email </li></ul><ul><li>Phone Call </li></ul><ul><li>Letter </li></ul><ul><li>Direct </li></...
Success Tips <ul><li>Touch customers early and often  – include Brand </li></ul><ul><li>Service quality at all touch point...
Keep the Momentum <ul><li>Don’t   stop communications after 90 days! </li></ul><ul><li>Touch customers throughout the life...
One More Case Study Andy Reed
Business Development Manager
American Airlines Federal Credit Union Forth Worth, TX
Situation <ul><li>TIP Charter </li></ul><ul><ul><li>Aviation Related Organizations </li></ul></ul><ul><ul><ul><li>Airline ...
1. Car Buying Advocacy Program CUDL
<ul><li>Work with CUDL </li></ul><ul><li>Dealer Advocate </li></ul><ul><li>Focus on Seminars </li></ul><ul><li>Smart, Savv...
2. Volunteer Army <ul><li>Coordinator Program </li></ul><ul><li>American Airlines & other TIP Employees  </li></ul><ul><ul...
2. Volunteer Army <ul><li>Focus – Primary Products </li></ul><ul><li>Savings </li></ul><ul><li>Checking </li></ul><ul><li>...
2. Volunteer Army <ul><li>Training </li></ul><ul><li>Twice/year offer to fly them to TX for 2 ½ day training  (Ambassadors...
2. Volunteer Army <ul><li>Results </li></ul><ul><li>75-80% of Ambassadors Refer </li></ul><ul><ul><li>Ambassadors have hig...
3. Sales Side  (2 People) <ul><li>Objective: Track TIP Leads & Establish Relationship </li></ul><ul><li>Top-down approach ...
3. Sales Side  <ul><li>Ways around security/badging </li></ul><ul><li>Escort by AA Employee or Coordinator </li></ul><ul><...
3. Sales Side <ul><li>Goals: </li></ul><ul><li>1,800 total contacts per year (4-5 contacts to land TIP) </li></ul><ul><li>...
4. Service Side  (2 People) <ul><li>Objective: Onsite Service </li></ul><ul><li>Onsite CU days </li></ul><ul><ul><li>Forma...
Credit Union Wide <ul><li>All employees at all levels meet with BD during orientation </li></ul><ul><li>Branch Goals </li>...
 
When We Return <ul><li>Commercial Products </li></ul><ul><li>ROI/Measurement </li></ul>
Let’s Take  A Break…
Commercial Products
Commercial Products <ul><li>Extend BD relationship as a resource </li></ul><ul><li>Compete against banks </li></ul><ul><li...
Small Business Dynamics: The Economy-Driving Engine <ul><li>There are an estimated  25   million  small businesses in the ...
Maryland 119.1% -33.1% DC -37.9% 54.0% What’s going on locally? Business Lending Statistics Source: CUNA Economics & Stati...
Small Business Dynamics: Who They Are <ul><li>50%  of small business owners prefer to use the same service providers that ...
What You’re Up Against <ul><li>People </li></ul><ul><li>Talented, experienced </li></ul><ul><li>local bankers and </li></u...
Arrange for  Senior Managers  to speak to Small Business groups Form  partnerships  with local colleges to educate small b...
More Low-Cost Acquisition Tactics Send  white papers/articles  to prospects focused on  changes/issues in their industry M...
Retention Tactics Host  Value-added seminars  for small businesses  (i.e., “How to better market their businesses”)  Lever...
Another  Value-Add Idea Premier America  Credit Union California & Texas 67,554 Members
Now That You Asked… <ul><li>Before every customer call, have your sales force consider the following questions.  If  they ...
Business Lending CUSO <ul><li>Options to Build Business Lending: </li></ul><ul><li>Develop a Business Lending Dept. </li><...
Business Lending CUSO “ Given the opportunity in the market, we believed a number of credit unions could benefit from offe...
Cooperative Business Services, LLC  (Ohio) <ul><li>7 credit union owners </li></ul><ul><li>Focused on underwriting, proces...
Advantages of CUSO Affiliation <ul><li>Cost management efficiencies </li></ul><ul><ul><li>Direct access to over 100 years ...
Business Lending CUSO “ If we do not fund a loan, we will educate the borrower on the reasons why and identify the steps t...
 
Business Lending CUSO Results:  CUSO was profitable in about 1 year More than $10 Million in outstanding balance within 6 ...
A Resource For You <ul><li>Participate with other states’ CUs </li></ul><ul><li>6-7 MD/DC Cus </li></ul><ul><li>Lead CU ta...
Let’s Take  a Break…
Measurement
Speaking the CEO Language   ROI
Perspective
Do  YOU  create value for your organization?
Does your  ORGANIZATION   value what  you do?
HOW  does your organization value what you do?
Polling Question <ul><ul><li>We do not use it at all   </li></ul></ul><ul><ul><li>We have used it, but have either stopped...
 
Today’s Conversation <ul><li>Planning </li></ul><ul><ul><li>New ways to look at ROI </li></ul></ul><ul><ul><li>Preparation...
Let’s Set a Baseline <ul><li>ROI -  return on investment </li></ul><ul><ul><li>The calculation of the return (expected or ...
PLANNING
Overview “ In preparing for battle I have always found that plans are useless, but planning is indispensable.” Dwight D. E...
 
Marketing Expenditures Allocation Advertising is the most widely used promotional tool with public relations almost a quar...
TV advertising isn’t getting any better… Base: 133 television advertisers Source:   Forrester’s 2006 Joint Association of ...
… and interactive marketing will benefit Base: 102 television advertisers Source: Forrester’s 2006 Joint Association of Na...
What is the primary  purpose of your  credit union’s  marketing budget?
Polling Question <ul><ul><li>I take last year’s budget and add/subtract a percentage </li></ul></ul><ul><ul><li>I base it ...
Average Bank Marketing  Budget Expenditures Source:   ABA Bank Marketing Survey Report Bank Assets in Millions 2000 2005 $...
Polling Question <ul><ul><li>3.  I come up with a number of programs that will hit the credit union’s business objectives ...
Factors That Affect Your Budget <ul><li>Strategic Direction of the Credit Union </li></ul><ul><ul><li>Community vs. SEG </...
The Center of Power is Different From  What You May Think… {And YOU can impact it…}
It’s About Leverage! <ul><li>You </li></ul><ul><li>Leverage your budget </li></ul><ul><li>Leverage your time </li></ul><ul...
It’s Also About… <ul><li>Working Upstream. </li></ul><ul><li>Working Smart. </li></ul><ul><li>Enjoying the Results. </li><...
 
ENGAGING
<ul><li>You must “brand” </li></ul><ul><li>your marketing as: </li></ul><ul><li>Unique </li></ul><ul><li>Relevant </li></u...
Unique, Relevant, Sustainable… <ul><li>Unique </li></ul><ul><ul><li>Ensuring marketing/BD efforts are addressing  your  pa...
Importance of Measuring ROI <ul><li>Creates the ability to  understand and communicate  the return on your  marketing/BD d...
 
The Marketing Process 1.  Market Assessment  2. Competitive Analysis 3.  New Product and Offer Creation 12.  Media Mix Sel...
Day in the Life of a Marketing/BD Director <ul><li>“ We spent $25,000 to sponsor the Hispanic Festival. Did we get our mon...
<ul><li>“ We spent $25,000 to sponsor the Hispanic Festival. Did we get our money’s worth from that event?” </li></ul>Even...
Breakeven of Community Event (BCE) <ul><li>BCE =  Event Cost /(Number of Sales x Product Profitability) </li></ul><ul><li>...
How many checking accounts will I need to generate to pay for the Event Sponsorship ? Hispanic Event Analysis
Hispanic Event Analysis
ROMI (Return on Marketing Investment) <ul><li>ROMI =   Product Profitability - Marketing Cost /  Marketing Cost </li></ul>...
Hispanic Event Analysis
<ul><li>Generated 374 new checking accounts at a cost per acquisition of $67 per account </li></ul><ul><li>Estimated profi...
Inspect Everything <ul><li>Do as much work  after  you launch the program as you did to prepare for it </li></ul><ul><li>T...
<ul><li>“ We are projected to sell 46,000 new small business checking accounts this year.  How much could we sell next yea...
Definition of Insanity: <ul><li>“ Doing the same things over and over again and expecting different results.” </li></ul>
Calculation of  Projected Sales Units (PSU): <ul><li>PSU =  Current Sales Run Rate + New  Marketing Programs </li></ul><ul...
Projections estimate a 15% increase in 2005 Business Checking Projections
We can make a sales goal of 53,000 new accounts if we can have…….. <ul><li>A new offer to give away a $50 Office Max gift ...
<ul><li>“ I think giving away a free DVD player for a free checking account is a stupid idea and will never pay for itself...
Calculation of Required  Sales Lift (RSL): <ul><li>RSL =  Offer Cost /(Product Profitability-Offer Cost) </li></ul><ul><li...
What is the lift required on Checking Account Sales to pay for a DVD Player? DVD Checking Offer Analysis
<ul><li>“ I do not think that home equity direct mailing did us any good. Should we save the money next quarter and just d...
Calculation of Return on Investment: <ul><li>ROI =   Incremental Profit - Marketing Investment </li></ul><ul><li>Marketing...
What Should Your Hurdle Rate Be? <ul><li>Recover the cost of your marketing expenses, or achieve a 100% ROI </li></ul><ul>...
Mailed 120,000 Home Equity Pieces and Tested $100 Home Depot Offer Home Equity Direct Mail Analysis
<ul><li>“ I liked our TV commercials, but did  they really do anything for us?” </li></ul>Multi Media Campaign Analysis
Acquisition / Retention Process Cross-Sales Advocate Unaware Aware Understand  /  Value Consider Positive   Experience Acc...
Multi Media Campaign Analysis Examine both sales and awareness level changes
“ If marketing were easy,  we would all be making minimum wage.”
OK….now what?
A Perspective <ul><li>CEO, Senior Management, and Board </li></ul><ul><ul><li>Leveraging capital </li></ul></ul><ul><ul><l...
Wall Street Journal Report Survey of Fortune 500 Companies What is the most important skill for a CEO to have for the futu...
Evolution of Marketing ROI Efforts time Value Returned Emerging Optimizing Strategic
Examples <ul><li>Emerging </li></ul><ul><ul><li>You realize that ROI is important, but are just learning, hesitant or lack...
Where to Start <ul><li>The Process– Keep it Simple </li></ul><ul><li>The beginning </li></ul><ul><li>The middle </li></ul>...
Polling Question <ul><ul><li>I’m a member.  I attend regularly   </li></ul></ul><ul><ul><li>I’ve attended, but am not a me...
Work Smart <ul><li>Know your “Champions” </li></ul><ul><li>Use the analytics at your disposal </li></ul><ul><ul><li>Find i...
Enjoy the Results <ul><li>Be your best promoter And most vocal critic </li></ul><ul><li>Share the progress Weekly Monthly ...
The Secret Spend the time. Build a base of planning, gather the information and then simply update your tools.
Key Variables <ul><li>Marketing’s total impact </li></ul><ul><li>Margin earned </li></ul><ul><li>Non interest revenue </li...
The Secret Become Indispensable Position yourself and the marketing function as a resource contributor versus resource “ea...
Toolkit
Summary <ul><li>Use facts and data  to create intelligent conversations with your managers </li></ul><ul><li>Build a  stro...
ROI Wrap-Up:  Key Take-Home Points <ul><li>View life from the  CEO’s  eye </li></ul><ul><li>Find ways to  engage </li></ul...
 
Wrap-Up:  Key Take-Home Points <ul><li>Network, Network, Network </li></ul><ul><li>Review your process and structure </li>...
Eric Gagliano Senior Vice President  (866) 501-2233, ext. 106 [email_address] www.MarketMatch.com How to Reach MarketMatch
From the MarketMatch Team… Thank  You! Feedback welcomed, please email me at:  egagliano@marketmatch.com Thank  You!
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SEG Development

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Strategies and tactics to recruit and grow SEGs for credit unions

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  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • # of Staff. Do they pay staff on time? General Background.
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • The Importance of That First Embrace – Gallup Management Journal
  • Poll: Compared to your 2008 marketing budget, is your 2009 budget… a. smaller b. same c. larger d. unsure
  • My bank is executing On Boarding programs for: A. Retail Customers B. Business Customers C. Retail and Business Customers D. None
  • Poll: Compared to your 2008 marketing budget, is your 2009 budget… a. smaller b. same c. larger d. unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • Poll: Are you currently using an On Boarding Program? A. Yes B. No C. Unsure
  • SEG Development

    1. 1. SEG Development Eric Gagliano MarketMatch SVP, Client Management [email_address] 866-501-2233 x106
    2. 2. Last Year <ul><li>Creating a BD Plan </li></ul><ul><ul><li>Positioning & Goals </li></ul></ul><ul><ul><li>Market & Competitive Overview/Trends </li></ul></ul><ul><ul><li>Anticipated Growth Areas </li></ul></ul><ul><li>Acquisition </li></ul><ul><ul><li>Basic Sales Techniques </li></ul></ul><ul><ul><li>Research Tools </li></ul></ul><ul><li>Penetration </li></ul><ul><ul><li>SEG Agreement </li></ul></ul><ul><ul><li>Basic On-Boarding </li></ul></ul><ul><ul><li>Welcome Kits </li></ul></ul><ul><ul><li>Basic Tactics </li></ul></ul><ul><li>Budgeting </li></ul>
    3. 3. Today’s Topics Best Practices from CUNA Award Winners Departmental Structure Maximize the “Honeymoon” Speaking the CEO’s Language with ROI Commercial – A New Door into SEGs
    4. 4. Resources <ul><li>Best Practices from CU Professionals </li></ul><ul><li>What do banks do </li></ul><ul><li>Brain Storming </li></ul>
    5. 5. SEG Acquisition
    6. 6. Sean McDonald 
Director, Business Development & Marketing 
Liberty Savings Federal Credit Union Jersey City, NJ 2008 SEG Acquisition Process/Tips
    7. 7. Challenges <ul><li>Getting past the gatekeeper for an appointment with decision maker </li></ul><ul><li>Explain why the CU matters </li></ul><ul><li>Reaching Penetration Goals & Member Acquisition </li></ul>
    8. 8. <ul><li>“ We’re finding that it seems to be becoming harder for banks to get into companies. Business owners are weary of dealing with them.” </li></ul>Sean McDonald 
Director, Business Development & Marketing 
Liberty Savings Federal Credit Union Jersey City, NJ “ We shouldn’t have to work as hard as we have.” “ Wachovia has a Wachovia@Work program, but in New Jersey, community banks do not offer the types of programs to compete with us.”
    9. 9.
    10. 12. Before the SEG Signs <ul><li>Research company’s clients (website, Google, press releases, etc). If company has common relationships: </li></ul><ul><ul><li>Ask common SEGs for testimonial directly to decision maker </li></ul></ul><ul><ul><li>Ask common partners for personal introduction </li></ul></ul><ul><li>Research if decision maker/owner is in organizations or professional groups </li></ul><ul><li>Use and leverage all professional contacts </li></ul><ul><li>Return referrals to those who give them </li></ul>Network! “ Cold calling stinks … no one likes it!”
    11. 13. There Is No Magic Bullet
    12. 14. <ul><li>“ BD Professionals need to find ways to effectively build relationships. Get them to know YOU. I try to help a SEG get new business before I even talk about the Credit Union.” </li></ul>Sean McDonald 
Director, Business Development & Marketing 
Liberty Savings Federal Credit Union Jersey City, NJ “ After they get to know me, it’s easier to approach them about the CU.” <ul><li>“ BD Professionals need to find ways to effectively build relationships. Get them to know YOU . I try to help a SEG get new business before I even talk about the Credit Union.” </li></ul>
    13. 15. After the SEG Signs <ul><li>Arrange on-site to speak to all staff (staff meeting, training session, financial literacy seminar) </li></ul><ul><ul><li>“ Maintain Excellent Credit” </li></ul></ul><ul><ul><li>“ Managing Money in Difficult Times” </li></ul></ul><ul><li>Ask for permission to include “Stuffer” in the next payroll to introduce CU </li></ul><ul><li>If SEG has intranet, ask for CU to be included as a company benefit for employee and their families </li></ul><ul><li>Target agreement to let CU in periodically throughout year </li></ul><ul><li>Provide Welcome Kit/application/info to be included in “new-hire” packets </li></ul><ul><li>Get one or more ambassadors to serve as liaison </li></ul><ul><ul><li>Ambassador must be trained and enthusiastic about CU </li></ul></ul>
    14. 16. <ul><li>“ On-sites are fine but they need to be advertised AND endorsed by the decision maker. Sitting in a cafeteria or break room for hours on end is a waste of time unless people know that you’re there and what you’re all about BEFOREHAND.” </li></ul>Sean McDonald 
Director, Business Development & Marketing 
Liberty Savings Federal Credit Union Jersey City, NJ
    15. 18. Lessons Learned <ul><li>When dealing with a SEG owner/decision maker, you need to realize that they, themselves, may have no need for a CU. “Sell” it by focusing on how offering CU membership will ultimately benefit their company (more productive employees, owner will look like a hero) </li></ul><ul><li>Try not to agree to on-sites where they say, “You can sit in our break room for a few hours and see what happens.” Your time is valuable and what you offer is important for members. Your visit should be treated with respect. Advertise visit and, if possible distribute information before hand. </li></ul><ul><li>Your ambassador is key … They need to be a referral source. There’s nothing wrong with having more than 1 ambassador. “Heck, have 1 for each department! The point is, you need to have a credit union CHAMPION in every SEG.” </li></ul>
    16. 19. Lessons Learned <ul><li>You’ll lose contact with your SEGS overtime if new employees are not communicated to. Getting in front of new hires , either in person or through promotional material is important. </li></ul><ul><li>Getting SEGs signed is the easy part. Getting employees to join is hard. </li></ul>
    17. 20. Results <ul><li>“ We’ve always had better success making an ‘in-person’ pitch rather than a direct mail piece or cold call. Using the Networking methodology, we have signed on almost 150 new SEGs .” </li></ul>
    18. 21. SEG Penetration
    19. 22. Nancy Hutchinson
SVP Marketing/Business Development
Minnesota Power Employees Credit Union
Duluth, MN 2009 SEG Recruitment & Retention
    20. 23. SEG Recruitment & Retention Plan <ul><li>Build relationship with company </li></ul><ul><li>Recruit employee members </li></ul><ul><li>Reach out to the wider community </li></ul>3-Step Process
    21. 24. Company Relationship <ul><li>Implement a written CU/SEG agreement </li></ul><ul><ul><li>Credit Union Exclusivity </li></ul></ul><ul><ul><li>Accountability (“If we do …, you must…”) </li></ul></ul>This agreement is made this 20 th day of January, by and between ________ and Minnesota Power Employees Credit Union and shall commence for the period of 36 months, renewing in consecutive terms thereafter. If __________ or MPECU wish to terminate this lease they must notify the other party no less than 60 days prior to renewal.   MPECU will operate an automated NCR5670 (ATM) on the business establishment of _________, as it is now located at, _____________, Bldg #2, Duluth, MN 55811.   This agreement shall be for the term commencing January 25, 2006, and continuing thereafter for a period until terminated by mutual agreement of the parties, or by either party, pursuant to other provisions of this contract.   MPECU shall use the Premises for the sole purpose of constructing, maintaining, and operating (including servicing) an ATM. MPECU shall install the ATM and related communications equipment. Any damage or repair cost to the ATM and related equipment will be the responsibility of MPECU unless caused by negligence of ___________.   ___________ shall provide space for the ATM and related equipment. ________ shall be responsible for any modification to the Premises to permit installation of the ATM. Subsequent relocation of the ATM and related equipment on the Premises requested by __________ shall be solely at Cirrus Design’s expense. ___________ shall provide MPECU with thirty (30) days notice of such ATM relocation. __________, at ___________ expense, shall provide for electricity, phone line, and any other utility serving the MPECU ATM. __________ shall maintain the Premises in good order and repair and keep the same free from rubbish and dirt. ___________ agrees to display standard MPECU ATM signage as prescribed by MPECU at the ATM location.   MPECU will comply with all applicable laws, ordinances, statutes, and regulations of the United States and the State of Minnesota, related to or affecting use of the Premises and the ATM   If ___________ fails to perform any obligation within thirty (30) days after written notice from MPECU, __________ shall be deemed in default hereunder. In the event of default by ___________, MPECU may terminate this agreement upon giving fifteen (15) days written notice to ___________. For purposes of such notice, or notice of any other kind related to this agreement, the parties agree service of such notice shall be deemed effective by sending prepaid certified mail and addressed as indicated below or to such other place as may be designed in writing from time to time.
    22. 25. Company Relationship <ul><li>Position the CU as an employer profit and benefit enhancer </li></ul><ul><ul><li>401K contributions </li></ul></ul><ul><ul><li>Flex Spending </li></ul></ul><ul><li>Focus on key employer decision maker </li></ul><ul><ul><li>Keep a “Little Black Book” (Birthdays, Anniversaries, Family info., etc.) </li></ul></ul>“ We don’t just focus on one person. People come and go and you don’t want anyone in the organization to think that you treat anyone else special. I’ll often know 4-5 people in a SEG very well.”
    23. 26. Company Relationship <ul><li>Explain the greater business services opportunity </li></ul><ul><ul><li>SEG Related Seminars </li></ul></ul><ul><ul><ul><li>“ Retail Credit Card Fraud Identification” </li></ul></ul></ul><ul><ul><li>Relationship Pricing </li></ul></ul>
    24. 27. Company Relationship <ul><li>Demonstrate that employees want financial education </li></ul><ul><li>Build effective employer support for the CU </li></ul><ul><ul><li>Partnerships </li></ul></ul><ul><ul><li>Sponsorships </li></ul></ul><ul><ul><li>Picnics </li></ul></ul><ul><li>Target, specialize and focus on selected SEGs </li></ul><ul><li># of Employees </li></ul><ul><li>Do they pay on time? </li></ul><ul><li>General company background </li></ul>“ Don’t be afraid to turn down a SEG.”
    25. 28. Recruit Members <ul><li>Incent member enrolment , not contracts produced </li></ul><ul><ul><li>MPECU targets 4-6 products per new member </li></ul></ul><ul><li>Dedicate significant resources to the SEG program </li></ul><ul><ul><li>Management </li></ul></ul><ul><ul><li>Branch Managers </li></ul></ul><ul><li>Build employee awareness to achieve success </li></ul><ul><ul><li>Meet and Greets </li></ul></ul><ul><ul><li>Flyers/Stuffers </li></ul></ul><ul><li>Offer a “can’t miss” product to build membership </li></ul><ul><ul><li>Lifestyle Marketing </li></ul></ul><ul><li>Use credit union ambassadors effectively </li></ul>
    26. 29. Lifestage Marketing
    27. 30. Community Outreach <ul><li>Pursue a special SEG strategy if yours is a community credit union </li></ul><ul><ul><li>“ Join organizations”: Chamber, Rotary, etc. </li></ul></ul><ul><ul><li>Sponsor activities, or be on boards that build community and awareness </li></ul></ul>
    28. 31. “ A SEG must be carefully managed and promoted. Credit unions cannot take for granted that once recruited, a SEG employer will support the needs of the credit union, and that employees will automatically join and use its services.” Nancy Hutchinson
SVP Marketing/Business Development
Minnesota Power Employees Credit Union “ You have to get involved at every level!”
    29. 32. Results <ul><li>After 12 years of this process, MPECU has enjoyed: </li></ul><ul><li>Membership has grown by 41% </li></ul><ul><li>Assets size has more than doubled </li></ul>
    30. 33. On Boarding
    31. 34. Why is On Boarding Important? <ul><li>According to Frederick Reichheld, author of “The Loyalty Effect” </li></ul><ul><ul><li>A 5% increase in retention can lead to a 100% increase in profitability. </li></ul></ul><ul><li>In the banking industry, banks spend, on average, $500 to acquire a new customer and less than $52 to retain. </li></ul><ul><ul><li>Which would you rather see the bank invest? </li></ul></ul>
    32. 35. “ Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.” - Peter Drucker
    33. 36. Why is On Boarding Important? <ul><li>Most cross-sell opportunities come in the first few months after </li></ul><ul><li>checking accounts are opened. </li></ul><ul><li>In fact 73% of all cross sales occur in the first three months of a </li></ul><ul><li>banking relationship. </li></ul><ul><li>Gallup Management Journal, November 2005 </li></ul>
    34. 37. “ You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.” - Jerry Fritz Sooooo … we can’t do this…
    35. 38. What NOT to do…
    36. 39. Customer Lifecycle <ul><ul><li>Target – Prospective customer stage, targeting with specific products/services </li></ul></ul><ul><ul><li>Acquire – New customers open an account and are introduced to your financial institution </li></ul></ul><ul><ul><li>Service – Continuous On Boarding and day-to-day servicing (transaction and value-added) </li></ul></ul><ul><ul><li>Develop – Present offers to expand and grow relationship </li></ul></ul>
    37. 40. What’s At Stake? “ Only 26% of the average bank's customers will consider it for their next purchase, and few will look to a bank for their investment needs. To improve their cross-sell odds, banks must target online banking and bill pay customers.” Forrester Research 2006
    38. 41. On Boarding is Critical <ul><li>90 Day Window </li></ul><ul><li>Trust the Process </li></ul><ul><li>Manage Expectations </li></ul><ul><li>Communicate </li></ul>
    39. 42. Time is of the Essence
    40. 43. Internal Promotion Example
    41. 44. “ Do what you do so well that they will want to see it again … and bring their friends.” - Walt Disney
    42. 45. BAI- 90 Day Window of Opportunity Report
    43. 46. The Potential Results…
    44. 47. Communication Methods <ul><li>Schedule Example (90 Days): </li></ul><ul><li> - 1-2 Day </li></ul><ul><li> - One Week </li></ul><ul><li> - Two Week </li></ul><ul><li> - Three Week </li></ul><ul><li> - 60 Day </li></ul><ul><li> - 90 Day </li></ul>
    45. 48. Communication Methods
    46. 49. “ Treat every customer as if they sign your paycheck … because they do.” - Unknown
    47. 50. Communication Methods <ul><li>Email </li></ul><ul><li>Phone Call </li></ul><ul><li>Letter </li></ul><ul><li>Direct </li></ul><ul><li>Considerations: </li></ul><ul><li>Determine who will send each communication (President, Branch Manager, CSR, etc.) </li></ul><ul><li>Retail or Business Product </li></ul>
    48. 51. Success Tips <ul><li>Touch customers early and often – include Brand </li></ul><ul><li>Service quality at all touch points – direct mail, online, frontline telephone and branch team. </li></ul><ul><li>Demonstrate understanding – customer relationship, customer value, and financial expert. </li></ul><ul><li>Include actionable steps </li></ul><ul><ul><li>Segment Audience – Targeted Communications </li></ul></ul><ul><ul><li>Provide Consistent Training </li></ul></ul><ul><ul><li>Ensure Accountability </li></ul></ul><ul><ul><li>Have a special plan to onboard SEG Ambassadors </li></ul></ul>
    49. 52. Keep the Momentum <ul><li>Don’t stop communications after 90 days! </li></ul><ul><li>Touch customers throughout the life of their relationship </li></ul><ul><ul><li>Keep calling/mailing limited to no more than once per quarter </li></ul></ul><ul><li>Target customers according to their current relationship </li></ul><ul><ul><li>Homeownership status </li></ul></ul><ul><ul><li>Age </li></ul></ul><ul><ul><li>Income </li></ul></ul><ul><ul><li>Product Usage </li></ul></ul><ul><ul><li>Other demographics/Lifestyle characteristics </li></ul></ul><ul><li>Include actionable offers in an effort to retain, reward and deepen relationships. </li></ul>
    50. 53. One More Case Study Andy Reed
Business Development Manager
American Airlines Federal Credit Union Forth Worth, TX
    51. 54. Situation <ul><li>TIP Charter </li></ul><ul><ul><li>Aviation Related Organizations </li></ul></ul><ul><ul><ul><li>Airline </li></ul></ul></ul><ul><ul><ul><li>Government Related Aviation </li></ul></ul></ul><ul><ul><ul><li>Employees on airport property (Support & Service) </li></ul></ul></ul><ul><ul><ul><ul><li>Specifically excludes: Retail, Restaurants and Car Rental </li></ul></ul></ul></ul><ul><li>Geographically Disbursed (43 branches across country) </li></ul><ul><li>Cashless CU </li></ul><ul><li>Security Regulations/Badging makes it difficult cold call or visit TIPs </li></ul>The Key: 4 Function Structure
    52. 55. 1. Car Buying Advocacy Program CUDL
    53. 56. <ul><li>Work with CUDL </li></ul><ul><li>Dealer Advocate </li></ul><ul><li>Focus on Seminars </li></ul><ul><li>Smart, Savvy & Sophisticated </li></ul><ul><li>A Women’s Guide to Car Buying </li></ul><ul><li>(Also offer Teen Buying) </li></ul><ul><li>Presented by Barbara Terry (NASCAR) </li></ul>1. Car Buying Advocacy Program <ul><li>First Seminar Results: </li></ul><ul><li>85 Participants </li></ul><ul><li>40 Referrals for Approvals </li></ul><ul><li>25 Loans </li></ul>
    54. 57. 2. Volunteer Army <ul><li>Coordinator Program </li></ul><ul><li>American Airlines & other TIP Employees </li></ul><ul><ul><li>170 people strong </li></ul></ul><ul><li>Represent the credit union </li></ul><ul><ul><li>“ They’re were we’re not” </li></ul></ul><ul><li>Focus on key gate keepers in TIP companies. Typically: </li></ul><ul><ul><li>Modest means </li></ul></ul><ul><ul><li>Under served/Under banked </li></ul></ul><ul><ul><li>Younger (off-sets older AA member-base) </li></ul></ul><ul><li>Their Job </li></ul><ul><li>Refer </li></ul><ul><li>Feed information to members </li></ul>
    55. 58. 2. Volunteer Army <ul><li>Focus – Primary Products </li></ul><ul><li>Savings </li></ul><ul><li>Checking </li></ul><ul><li>Overdraft </li></ul><ul><li>Debit </li></ul><ul><li>Rewards Program </li></ul><ul><li>Visa Points </li></ul><ul><ul><li>Double Points in first 60 days </li></ul></ul><ul><li>Incentive Trip (every other year) </li></ul>
    56. 59. 2. Volunteer Army <ul><li>Training </li></ul><ul><li>Twice/year offer to fly them to TX for 2 ½ day training (Ambassadors asked to attend once every 2 years) </li></ul><ul><ul><li>CU philosophy </li></ul></ul><ul><ul><li>Initiation into CU culture </li></ul></ul><ul><ul><li>Products & Services Basics </li></ul></ul><ul><li>Annual Budget for Entire Program </li></ul><ul><li>$19,000 </li></ul><ul><li>$7,400 for trip every 2 years </li></ul>
    57. 60. 2. Volunteer Army <ul><li>Results </li></ul><ul><li>75-80% of Ambassadors Refer </li></ul><ul><ul><li>Ambassadors have higher products per member than CU staff </li></ul></ul><ul><li>Training Results (April 2009) </li></ul><ul><li>Of 38 Attendees (60 days post-training) : </li></ul><ul><li>360 new products </li></ul><ul><li>55% refresher attendees (51% of new product sales) </li></ul>2009 Goal Actual as of Aug. Consumer Loans $689,000 $1,728,977 Mortgage Loans $837,000 $3,202,957
    58. 61. 3. Sales Side (2 People) <ul><li>Objective: Track TIP Leads & Establish Relationship </li></ul><ul><li>Top-down approach (Focus on CEOs/Owners) </li></ul><ul><li>“ Can you provide contact at local level?” </li></ul><ul><li>Bottom-up from local information </li></ul><ul><li>Means: </li></ul><ul><li>Cold Call </li></ul><ul><li>Email </li></ul><ul><li>Visit </li></ul>
    59. 62. 3. Sales Side <ul><li>Ways around security/badging </li></ul><ul><li>Escort by AA Employee or Coordinator </li></ul><ul><li>Set-up appointments in advance </li></ul>TOOL
    60. 63. 3. Sales Side <ul><li>Goals: </li></ul><ul><li>1,800 total contacts per year (4-5 contacts to land TIP) </li></ul><ul><li>15-30 NEW initial (cold call) contacts per month </li></ul><ul><li>4 Nationwide PREFERRED PROVIDER agreements </li></ul>
    61. 64. 4. Service Side (2 People) <ul><li>Objective: Onsite Service </li></ul><ul><li>Onsite CU days </li></ul><ul><ul><li>Formal Presentations </li></ul></ul><ul><ul><li>Informal “Table” Visits </li></ul></ul><ul><ul><ul><li>Break room </li></ul></ul></ul><ul><ul><ul><li>Benefit Fair </li></ul></ul></ul><ul><ul><ul><li>Company Picnic </li></ul></ul></ul><ul><li>Revisits </li></ul><ul><ul><li>Ranking system (3, 6, 12 month) </li></ul></ul><ul><ul><li>Partners recommendations/desires </li></ul></ul>
    62. 65. Credit Union Wide <ul><li>All employees at all levels meet with BD during orientation </li></ul><ul><li>Branch Goals </li></ul><ul><li>RESULTS: </li></ul><ul><li>10% TIP Growth in 2008 </li></ul><ul><li>29% TIP Growth in 2009 </li></ul>
    63. 67. When We Return <ul><li>Commercial Products </li></ul><ul><li>ROI/Measurement </li></ul>
    64. 68. Let’s Take A Break…
    65. 69. Commercial Products
    66. 70. Commercial Products <ul><li>Extend BD relationship as a resource </li></ul><ul><li>Compete against banks </li></ul><ul><li>A new foot in the door </li></ul><ul><li>CUSOs </li></ul>
    67. 71. Small Business Dynamics: The Economy-Driving Engine <ul><li>There are an estimated 25 million small businesses in the U.S. and they are growing at a rate of 14% per year </li></ul><ul><li>Small businesses would constitute the world’s 3 rd largest economy </li></ul><ul><li>Delivers approximately $50 billion in annual revenues </li></ul><ul><li>Small businesses tend to be 2 – 3 times more profitable than the average retail customer </li></ul><ul><li>1 in 13 US retail banking customers is an “under-banked business (no business checking or savings) </li></ul>
    68. 72. Maryland 119.1% -33.1% DC -37.9% 54.0% What’s going on locally? Business Lending Statistics Source: CUNA Economics & Statistics Dept. All financial data is December 2008. 111 credit unions have outstanding MBLs (23%) 3 credit unions have outstanding MBLs (5%) CUs Banks Total Assets $15.4 Billion $40.2 Billion Market Share/Deposits 11.80% 88.20% Total Business Loans $169 Million $13 Billion Market Share/Biz Lend 1.27% 98.73% Biz Loan as % Assets 1.09% 32.62% 3 yr Change $92 Million (-$7 Billion) CUs Banks Total Assets $6.7 Billion $1.6 Billion Market Share/Deposits 19.62% 80.38% Total Business Loans $2 Million $559 Million Market Share/Biz Lend 0.36% 99.64% Biz Loan as % Assets 0.03% 35.54% 3 yr Change ($-1 Million) $196 Million
    69. 73. Small Business Dynamics: Who They Are <ul><li>50% of small business owners prefer to use the same service providers that they use for their personal needs </li></ul><ul><li>32% of these businesses are women-owned, and 9% are minority-owned </li></ul><ul><li>Nearly 90% of small businesses use commercial banks as their primary financial provider </li></ul>
    70. 74. What You’re Up Against <ul><li>People </li></ul><ul><li>Talented, experienced </li></ul><ul><li>local bankers and </li></ul><ul><li>relationship specialists </li></ul><ul><li>backed by a team of </li></ul><ul><li>product partner </li></ul><ul><li>specialists </li></ul><ul><li>Access to sales and </li></ul><ul><li>service specialists in </li></ul><ul><li>ways that work for </li></ul><ul><li>you…in person, on the </li></ul><ul><li>phone, over the web </li></ul><ul><li>Service </li></ul><ul><li>Guaranteed first-rate </li></ul><ul><li>customer care from </li></ul><ul><li>banking team, branch, </li></ul><ul><li>telephone or Internet </li></ul><ul><li>We regularly ask for our </li></ul><ul><li>customers’ feedback and </li></ul><ul><li>measure the results </li></ul><ul><li>Convenient, anytime </li></ul><ul><li>access; it’s easy to do </li></ul><ul><li>business with us </li></ul><ul><li>Ideas </li></ul><ul><li>Understanding your </li></ul><ul><li>business is our #1 </li></ul><ul><li>priority. We ask…and </li></ul><ul><li>we listen </li></ul><ul><li>Proactive, thoughtful </li></ul><ul><li>ideas to help you grow </li></ul><ul><li>your business, retain </li></ul><ul><li>your employees and </li></ul><ul><li>accumulate wealth </li></ul>Wachovia Bank Value Proposition
    71. 75. Arrange for Senior Managers to speak to Small Business groups Form partnerships with local colleges to educate small business owners on lending programs, etc. Establish a “Centers of Influence” program with CPAs and Attorneys Target select trade shows Arrange for CEO presentations to small groups of prospects Create special events to recognize top women, minority business owners and other niche segments Low-Cost Acquisition Tactics
    72. 76. More Low-Cost Acquisition Tactics Send white papers/articles to prospects focused on changes/issues in their industry Manage media relationships to gain exposure Join the regional Economic Development Committee
    73. 77. Retention Tactics Host Value-added seminars for small businesses (i.e., “How to better market their businesses”) Leverage sponsorships to benefit customers Ask your good customers for referrals Invite spouses of small business customers to event marketing Hold networking breakfasts for customers Utilize in-house Credit Union talent to “educate” customers Learn from your peers . Find out what’s successful and try it in your market.
    74. 78. Another Value-Add Idea Premier America Credit Union California & Texas 67,554 Members
    75. 79. Now That You Asked… <ul><li>Before every customer call, have your sales force consider the following questions. If they don’t ask the questions, someone else will and probably already is. </li></ul><ul><li>Is it easy to do business with me/us? </li></ul><ul><li>How do they perceive my/our customer service? </li></ul><ul><li>Am I taking care of their business and personal needs? </li></ul><ul><li>Am I suggesting better or more innovative ways to meet their present and future needs? </li></ul><ul><li>If concern areas are outside my scope of responsibility, am I alerting the appropriate people so problems can be addressed and corrected? </li></ul><ul><li>Am I achieving a value proposition? </li></ul><ul><li>Am I/we employing all of the Credit Union’s resources for the benefit of the member? </li></ul>
    76. 80. Business Lending CUSO <ul><li>Options to Build Business Lending: </li></ul><ul><li>Develop a Business Lending Dept. </li></ul><ul><li>Outsource to a third party </li></ul><ul><li>Form CUSO </li></ul>
    77. 81. Business Lending CUSO “ Given the opportunity in the market, we believed a number of credit unions could benefit from offering business services but may not be able to make the necessary investment to build capabilities on their own. Capital limits also played a role, as well as the ability to participate and diversify a commercial loan portfolio among a group of credit unions.” - Doug Fecher CEO Wright-Patt Credit Union Dayton, Ohio “ Given the opportunity in the market, we believed a number of credit unions could benefit from offering business services but may not be able to make the necessary investment to build capabilities on their own. Capital limits also played a role, as well as the ability to participate and diversify a commercial loan portfolio among a group of credit unions.” - Doug Fecher CEO Wright-Patt Credit Union Dayton, Ohio
    78. 82. Cooperative Business Services, LLC (Ohio) <ul><li>7 credit union owners </li></ul><ul><li>Focused on underwriting, processing and servicing the loans </li></ul><ul><li>Each credit unions assigns a primary contact within the CU for small business loans </li></ul><ul><li>Once a loan is approved, the CUs each fund a certain percentage of the loan – to diversify the risk of each </li></ul><ul><ul><li>The CUSO provides servicing, receiving payments and distributing monthly portfolio reports along with loan payments to each CU </li></ul></ul><ul><li>CU’s participate up to their 12.25% limit </li></ul><ul><li>For more info, go to www.cbscuso.com </li></ul>
    79. 83. Advantages of CUSO Affiliation <ul><li>Cost management efficiencies </li></ul><ul><ul><li>Direct access to over 100 years of direct industry experience </li></ul></ul><ul><li>Effective management of liquidity </li></ul><ul><li>Geographical diversification of portfolio </li></ul><ul><li>Loan participation advantages </li></ul><ul><li>Borrower concentration management tool </li></ul><ul><ul><li>Lead CU can fund as little as 10% of their loan </li></ul></ul>
    80. 84. Business Lending CUSO “ If we do not fund a loan, we will educate the borrower on the reasons why and identify the steps they can take to become a stronger credit. If we approve a loan, we will try to provide several lending solutions to the borrower. This level of service distinguishes us and credit unions in the small business market.” - Keith Reed President/COO Cooperative Business Services Dayton, Ohio
    81. 86. Business Lending CUSO Results: CUSO was profitable in about 1 year More than $10 Million in outstanding balance within 6 months Servicing 40 Credit Unions ($20 million to $1.4 Billion) PORTFOLIO THROUGH JULY 2009 309 Loans $191,155,295 Avg. Transaction Size: $618,625 Avg. Rate of Return: 6.1943% ‘ 09 Conversion Rate (Appt. to Close): 87.62%
    82. 87. A Resource For You <ul><li>Participate with other states’ CUs </li></ul><ul><li>6-7 MD/DC Cus </li></ul><ul><li>Lead CU takes min. 10% </li></ul><ul><li>Other CUs do not need to fit your member criteria </li></ul><ul><li>Example: </li></ul><ul><li>$10 million loan in NC </li></ul><ul><li>NC CU took $1 million </li></ul><ul><li>Remaining 9 million shared between CUs in: </li></ul><ul><ul><li>VA </li></ul></ul><ul><ul><li>NY (2) </li></ul></ul><ul><ul><li>FL </li></ul></ul><ul><ul><li>TX </li></ul></ul>
    83. 88. Let’s Take a Break…
    84. 89. Measurement
    85. 90. Speaking the CEO Language ROI
    86. 91. Perspective
    87. 92. Do YOU create value for your organization?
    88. 93. Does your ORGANIZATION value what you do?
    89. 94. HOW does your organization value what you do?
    90. 95. Polling Question <ul><ul><li>We do not use it at all </li></ul></ul><ul><ul><li>We have used it, but have either stopped or use it infrequently. </li></ul></ul><ul><ul><li>We use it fairly regularly. </li></ul></ul><ul><ul><li>We constantly measure ROI and use if for pre- and post- planning reviews. </li></ul></ul>To what level do you currently utilize ROI or ROMI calculations in your marketing planning and/or review? <ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul>
    91. 97. Today’s Conversation <ul><li>Planning </li></ul><ul><ul><li>New ways to look at ROI </li></ul></ul><ul><ul><li>Preparation is fundamental </li></ul></ul><ul><ul><li>YOU can do it… today </li></ul></ul><ul><li>Engaging </li></ul><ul><ul><li>Ensuring all players are on board </li></ul></ul><ul><li>Executing </li></ul><ul><ul><li>Getting the ideas off the shelf and into action </li></ul></ul><ul><ul><ul><li>Tools! </li></ul></ul></ul><ul><ul><li>Make the most of what you have </li></ul></ul><ul><li>Measuring </li></ul><ul><ul><li>Numbers are important but trends tell all </li></ul></ul><ul><ul><li>Communication is imperative </li></ul></ul>
    92. 98. Let’s Set a Baseline <ul><li>ROI - return on investment </li></ul><ul><ul><li>The calculation of the return (expected or realized) of certain activities generated by a specific program and investment. </li></ul></ul><ul><li>ROMI - return on marketing investment </li></ul><ul><ul><li>The calculation of the return (expected or realized) of certain marketing activities and their impact on an organization , based upon a specific program and investment. </li></ul></ul>
    93. 99. PLANNING
    94. 100. Overview “ In preparing for battle I have always found that plans are useless, but planning is indispensable.” Dwight D. Eisenhower
    95. 102. Marketing Expenditures Allocation Advertising is the most widely used promotional tool with public relations almost a quarter of the budget Budget Analysis Allocation of Ad Expenditures Newspapers remain the most important mass medium with $3 out of every $10 Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study
    96. 103. TV advertising isn’t getting any better… Base: 133 television advertisers Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study In the past two years, would you say television advertising has become...
    97. 104. … and interactive marketing will benefit Base: 102 television advertisers Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study Now that 1 in 10 households own DVRs, which of the following forms of non-television advertising -- if any -- will you spend MORE on?
    98. 105. What is the primary purpose of your credit union’s marketing budget?
    99. 106. Polling Question <ul><ul><li>I take last year’s budget and add/subtract a percentage </li></ul></ul><ul><ul><li>I base it on the asset size of the credit union </li></ul></ul>How do you create your Marketing Budget for the Year? <ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul>
    100. 107. Average Bank Marketing Budget Expenditures Source: ABA Bank Marketing Survey Report Bank Assets in Millions 2000 2005 $(000) $(000) Less than 25 23 23 25 - 49.9 32 38 50 - 99.9 70 80 100 - 249.9 146 179 250 - 499.9 328 330 500 - 999.9 555 518 1,000 - 4,999 1,507 1,222 5,000 - 24,999 5,279 5370
    101. 108. Polling Question <ul><ul><li>3. I come up with a number of programs that will hit the credit union’s business objectives and I justify the costs for each program </li></ul></ul><ul><ul><li>4. I take whatever Finance gives me </li></ul></ul>How do you create your Marketing Budget for the Year? <ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>I take last year’s budget and add/subtract a percentage </li></ul></ul><ul><ul><li>I base it on the asset size of the credit union </li></ul></ul>
    102. 109. Factors That Affect Your Budget <ul><li>Strategic Direction of the Credit Union </li></ul><ul><ul><li>Community vs. SEG </li></ul></ul><ul><ul><li>Market Segments </li></ul></ul><ul><ul><li>Market Share </li></ul></ul><ul><ul><li>Growth Goals </li></ul></ul><ul><ul><li>Orientation towards Marketing and Branding </li></ul></ul><ul><li>Media Costs in Your Market(s) </li></ul><ul><li>Number of Branches/Markets </li></ul><ul><li>Ability to Provide ROI </li></ul>
    103. 110. The Center of Power is Different From What You May Think… {And YOU can impact it…}
    104. 111. It’s About Leverage! <ul><li>You </li></ul><ul><li>Leverage your budget </li></ul><ul><li>Leverage your time </li></ul><ul><li>Position Marketing as a driver </li></ul><ul><li>Your CEO </li></ul><ul><li>Leverage every dollar </li></ul><ul><li>Plan to succeed </li></ul><ul><li>Board of Directors </li></ul><ul><li>Maximize member satisfaction </li></ul><ul><li>Complete due diligence </li></ul>
    105. 112. It’s Also About… <ul><li>Working Upstream. </li></ul><ul><li>Working Smart. </li></ul><ul><li>Enjoying the Results. </li></ul>
    106. 114. ENGAGING
    107. 115. <ul><li>You must “brand” </li></ul><ul><li>your marketing as: </li></ul><ul><li>Unique </li></ul><ul><li>Relevant </li></ul><ul><li>Sustainable </li></ul>
    108. 116. Unique, Relevant, Sustainable… <ul><li>Unique </li></ul><ul><ul><li>Ensuring marketing/BD efforts are addressing your particular institutional needs </li></ul></ul><ul><li>Relevant </li></ul><ul><ul><li>Focusing on the market segments that create the highest level of impact and leverage </li></ul></ul><ul><li>Sustainable </li></ul><ul><ul><li>Being able to replicate the successes and minimize the failures… knowing what is/isn’t working and to what degree </li></ul></ul>
    109. 117. Importance of Measuring ROI <ul><li>Creates the ability to understand and communicate the return on your marketing/BD dollars. </li></ul><ul><li>Helps to better evaluate which programs are the most effective and which need to be modified or eliminated </li></ul><ul><li>Assists in getting the resources you need </li></ul><ul><li>Allows you to have an intelligent conversation regarding your marketing/BD budget </li></ul><ul><li>Prevents you from becoming a Dilbert cartoon </li></ul>
    110. 119. The Marketing Process 1. Market Assessment 2. Competitive Analysis 3. New Product and Offer Creation 12. Media Mix Selection 11.Operational & Systems Planning 17. PR and Internal Comm. 16. Product Pricing and Offer 15. Sales Support 14. Promotions/ Merchandising 13. Marketing Message & Creative 8. Client Understanding & Segmentation 7. Internal Brand Mgmt. 6. Brand management 5. Brand Development 4. Financial Analysis with ROI 20. Measuring Performance & Quality Control 19. Staff and Partner Management 18. Marketing Role Definition 10. Retention and Process Improvement 9. Experience and Service Management Effectively Managing the Twenty Activities of Marketing Developing Marketing Strategy/Planning Defining Brand Strategy/Managing the Brand Understanding and Managing Clients Executing the Marketing Plan Managing the Marketing Function
    111. 120. Day in the Life of a Marketing/BD Director <ul><li>“ We spent $25,000 to sponsor the Hispanic Festival. Did we get our money’s worth from that event?” </li></ul><ul><li>“ I think giving away a free DVD player for a free checking account is a stupid idea and will never pay for itself.” </li></ul><ul><li>“ I do not think that home equity direct mail did us any good, should we save the money next quarter and just drop it?” </li></ul><ul><li>“ We are projected to sell 46,000 new small business checking accounts this year. How much could we sell next year?” </li></ul><ul><li>“ I liked our TV commercials, but did they really do anything for us?” </li></ul>
    112. 121. <ul><li>“ We spent $25,000 to sponsor the Hispanic Festival. Did we get our money’s worth from that event?” </li></ul>Event Analysis
    113. 122. Breakeven of Community Event (BCE) <ul><li>BCE = Event Cost /(Number of Sales x Product Profitability) </li></ul><ul><li>It answers: </li></ul><ul><li>How much in product sales will I need to pay for my event? </li></ul>
    114. 123. How many checking accounts will I need to generate to pay for the Event Sponsorship ? Hispanic Event Analysis
    115. 124. Hispanic Event Analysis
    116. 125. ROMI (Return on Marketing Investment) <ul><li>ROMI = Product Profitability - Marketing Cost / Marketing Cost </li></ul><ul><li>It answers: </li></ul><ul><li>Did my profits pay for the marketing program? </li></ul>
    117. 126. Hispanic Event Analysis
    118. 127. <ul><li>Generated 374 new checking accounts at a cost per acquisition of $67 per account </li></ul><ul><li>Estimated profit of $55,410 based upon a one year account profit model, or over a 220% return on investment </li></ul><ul><li>Household profitability of the accounts after a 6 month basis averaged $278 </li></ul><ul><li>Gained brand exposure to critical market segment of over 180,000 in a 5 day period </li></ul>Hispanic Event ROI Summary
    119. 128. Inspect Everything <ul><li>Do as much work after you launch the program as you did to prepare for it </li></ul><ul><li>Talk to clients, operations, front line sales personnel, ambassadors and managers </li></ul><ul><li>Speak to the 5 best performing branches/SEGs and the 5 worst performing branches/SEGs </li></ul><ul><li>The numbers alone do not always tell the story </li></ul>
    120. 129. <ul><li>“ We are projected to sell 46,000 new small business checking accounts this year. How much could we sell next year?” </li></ul>Projections
    121. 130. Definition of Insanity: <ul><li>“ Doing the same things over and over again and expecting different results.” </li></ul>
    122. 131. Calculation of Projected Sales Units (PSU): <ul><li>PSU = Current Sales Run Rate + New Marketing Programs </li></ul><ul><li>It answers: </li></ul><ul><li>The collection of marketing/BD activities will generate this number of sales. </li></ul>
    123. 132. Projections estimate a 15% increase in 2005 Business Checking Projections
    124. 133. We can make a sales goal of 53,000 new accounts if we can have…….. <ul><li>A new offer to give away a $50 Office Max gift card for the first quarter </li></ul><ul><li>Our prospect direct mail budget increases from 1.5 million pieces to 2 million pieces </li></ul><ul><li>Our member direct mail budget increases from 300,000 to 500,000 pieces </li></ul><ul><li>We add 10 new sales people </li></ul>
    125. 134. <ul><li>“ I think giving away a free DVD player for a free checking account is a stupid idea and will never pay for itself.” </li></ul>Required Sales Lift
    126. 135. Calculation of Required Sales Lift (RSL): <ul><li>RSL = Offer Cost /(Product Profitability-Offer Cost) </li></ul><ul><li>It answers: </li></ul><ul><li>How much of an increase in sales volume will I need to pay for my marketing program? </li></ul>
    127. 136. What is the lift required on Checking Account Sales to pay for a DVD Player? DVD Checking Offer Analysis
    128. 137. <ul><li>“ I do not think that home equity direct mailing did us any good. Should we save the money next quarter and just drop it?” </li></ul>ROI
    129. 138. Calculation of Return on Investment: <ul><li>ROI = Incremental Profit - Marketing Investment </li></ul><ul><li>Marketing Investment </li></ul><ul><li>It answers: </li></ul><ul><li>What kind of return did I get on my Marketing Expenditure? </li></ul>
    130. 139. What Should Your Hurdle Rate Be? <ul><li>Recover the cost of your marketing expenses, or achieve a 100% ROI </li></ul><ul><li>Recover your expenses and produce a 20% return on your investment, or a 120% ROI </li></ul><ul><li>Double the return on your marketing dollars, or produce a 200% ROI </li></ul>
    131. 140. Mailed 120,000 Home Equity Pieces and Tested $100 Home Depot Offer Home Equity Direct Mail Analysis
    132. 141. <ul><li>“ I liked our TV commercials, but did they really do anything for us?” </li></ul>Multi Media Campaign Analysis
    133. 142. Acquisition / Retention Process Cross-Sales Advocate Unaware Aware Understand / Value Consider Positive Experience Accept Information Seek Information Active Consideration Purchase Commitment Retain Recommend <ul><li>Acquisition </li></ul><ul><li>Communication & WOM Driven </li></ul><ul><li>“ Rational” and “emotional” elements </li></ul><ul><li>Retention/ Growth </li></ul><ul><li>Experience Driven </li></ul><ul><li>“ Rational” and “emotional” elements </li></ul>
    134. 143. Multi Media Campaign Analysis Examine both sales and awareness level changes
    135. 144. “ If marketing were easy, we would all be making minimum wage.”
    136. 145. OK….now what?
    137. 146. A Perspective <ul><li>CEO, Senior Management, and Board </li></ul><ul><ul><li>Leveraging capital </li></ul></ul><ul><ul><li>Expense vs. investment </li></ul></ul><ul><ul><li>Support vs. lead </li></ul></ul><ul><li>CEOs and CFOs typically grow up on the “numbers side” of banking </li></ul><ul><ul><li>Speak their language </li></ul></ul><ul><ul><li>Think like your CEO/CFO </li></ul></ul><ul><ul><li>Gain buy in </li></ul></ul><ul><ul><li>Discuss assumptions </li></ul></ul>
    138. 147. Wall Street Journal Report Survey of Fortune 500 Companies What is the most important skill for a CEO to have for the future growth of their organization? Marketing Financial 52% 14%
    139. 148. Evolution of Marketing ROI Efforts time Value Returned Emerging Optimizing Strategic
    140. 149. Examples <ul><li>Emerging </li></ul><ul><ul><li>You realize that ROI is important, but are just learning, hesitant or lack information to complete the review. </li></ul></ul><ul><li>Optimizing </li></ul><ul><ul><li>You are completing the review as a follow-up to marketing programs. </li></ul></ul><ul><li>Strategic </li></ul><ul><ul><li>You use ROI/ROMI to both plan and review, you engage all levels of the credit union and you communicate the expectations, results and modifications across all levels. </li></ul></ul>
    141. 150. Where to Start <ul><li>The Process– Keep it Simple </li></ul><ul><li>The beginning </li></ul><ul><li>The middle </li></ul><ul><li>The implementation </li></ul><ul><li>The analysis </li></ul>
    142. 151. Polling Question <ul><ul><li>I’m a member. I attend regularly </li></ul></ul><ul><ul><li>I’ve attended, but am not a member </li></ul></ul><ul><ul><li>I’ve never attended </li></ul></ul>With what frequency do you (or a member of your Marketing function) attend the credit union’s regular Asset/Liability Committee (ALCO) meetings? <ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul><ul><ul><li>____% </li></ul></ul>
    143. 152. Work Smart <ul><li>Know your “Champions” </li></ul><ul><li>Use the analytics at your disposal </li></ul><ul><ul><li>Find information </li></ul></ul><ul><ul><li>Talk with the front-line </li></ul></ul><ul><ul><li>Dissect the competition </li></ul></ul><ul><ul><li>Share what you learn </li></ul></ul><ul><ul><li>Use your MCIF to drive information and automate some processes </li></ul></ul><ul><li>Create ambassadors </li></ul><ul><li>Engage all staff </li></ul>
    144. 153. Enjoy the Results <ul><li>Be your best promoter And most vocal critic </li></ul><ul><li>Share the progress Weekly Monthly Recaps Program End </li></ul><ul><ul><li>Post-mortem </li></ul></ul>
    145. 154. The Secret Spend the time. Build a base of planning, gather the information and then simply update your tools.
    146. 155. Key Variables <ul><li>Marketing’s total impact </li></ul><ul><li>Margin earned </li></ul><ul><li>Non interest revenue </li></ul><ul><li>Average balances </li></ul><ul><li>Cross selling </li></ul><ul><li>Promotional expense </li></ul><ul><li>Quantity and quality measurements </li></ul>
    147. 156. The Secret Become Indispensable Position yourself and the marketing function as a resource contributor versus resource “eater”.
    148. 157. Toolkit
    149. 158. Summary <ul><li>Use facts and data to create intelligent conversations with your managers </li></ul><ul><li>Build a strong partnership with your Finance Group </li></ul><ul><li>Results for programs work best when both the field and Marketing have ownership </li></ul><ul><li>Pilot programs are a great tool for testing new ideas and creating realistic projections </li></ul><ul><li>Always keep your results close to you </li></ul>
    150. 159. ROI Wrap-Up: Key Take-Home Points <ul><li>View life from the CEO’s eye </li></ul><ul><li>Find ways to engage </li></ul><ul><li>Involve the stakeholders </li></ul><ul><li>Focus on what matters Most </li></ul><ul><li>Be Strategic and Planned </li></ul><ul><li>Have a process, but be Flexible </li></ul><ul><li>Always look Forward </li></ul>
    151. 161. Wrap-Up: Key Take-Home Points <ul><li>Network, Network, Network </li></ul><ul><li>Review your process and structure </li></ul><ul><li>On Board </li></ul><ul><li>Review your commercial product suite </li></ul><ul><li>Measure ROI </li></ul>
    152. 162. Eric Gagliano Senior Vice President (866) 501-2233, ext. 106 [email_address] www.MarketMatch.com How to Reach MarketMatch
    153. 163. From the MarketMatch Team… Thank You! Feedback welcomed, please email me at: egagliano@marketmatch.com Thank You!

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