Short, Sweet, To-The-Point: The Twitterfication of American Business

by Ron Daly 

[This post originally ran on the DigitalMailer blog] 

Just read an article from CUNA Marketing and Business Development Council, “Reach Members in 140 Characters”. They have a lot of great examples of small businesses and community businesses using Twitter to draw interest and save on marketing. They address a lot of what new users wonder about Twitter, specifically:

• Listen to the “static” and the negative/critical talk, because you can. Nobody’s stopping you from finding out what Twitter users think.
• Spice it up by making your messages sharp and memorable – don’t just “robo-tweet”.
• Use your Twitter stream as a focus group/Q and A channel for curious parties.
• Start small and stick with it!

Many of the folks I talk to in the credit union industry wonder how you manage to talk to anyone about anything in 140 character spurts. According to a recent article from LifeHacker, phrasing the first sentence in an email can increase the chances that the email gets read. We all know that a solid subject line gets a reader’s attention, but what about the preview line? For example, you get an email:

Re: Business Collaboration Opportunity

Hi, John – I got your email recently and I’m curious about a possible collaboration between our business and your busi…

The subject line lets you know that A) The person writing is replying to your email and B) they want to talk business collaboration with you. It’s simple and direct. But then there’s your preview line that gets cut off without saying anything else to compel your reader. Want to make it pop?

Re: Business Collaboration Opportunity

We would love to discuss a collaboration with you. Please call me today.

Hammer down a few lines with a hard return or two with extra details and let that first sentence say everything that needs saying. With practice, it can turn your business communication on its ear and make it stand out to your readers.

Start making it short, start making it sweet.

The acorns are still small - is it time to quit watering the oaks?

by Ron Daly 

Here in Virginia (at DMI world headquarters), we've experienced very little rain lately. Last night, however, we had a real soaker. Everything that grows got a much-needed drink and the grass is suddenly greener on everyone's side of the fence. 

This heatwave/thunderstorm pattern's put me in mind of the debate about "Gen Y" members/customers and their late Gen X/Young Boomer parents. Should CUs go after young members in hope of "watering" these financial acorns into the might oaks their parents have been? Should they continue to ignore these (mostly) broke users in favor of more fruitful consumers with better credit? Lending opportunities will keep on going for boomers and Gen X, right? 

Maybe not. The picture's looking a little bleak for the rapidly-aging Americans that have turbo charged our economy these past sixty years. A report from the Today show this morning showed many Boomers and some Gen Xers will run out of retirement money during retirement. Quite a pill to swallow, but not unexpected given the events of the past two years. 

Here's where you prove yourself a clutch player in the lives of your older members. You continue to guide them through the rocky shoal of making sure they can have what they need to stay afloat when they're not working and trying to enjoy their "golden years". Reports such as the one mentioned and increased economic concerns will undoubtedly weigh on your member's minds. Be the shoulder to cry on. 

And then, there's the youngsters. Rob Rubin of FindaBetterBank.com wrote an article in the Huffington Post about attracting younger members and making a conscious effort to decrease the average age of a CU member. It's easy to get caught up in the hype regarding Gen Y and to be sold a bunch of snake oil about how your CEO has to breakdance on YouTube and get a million hits to save you from being acquired in a merger. It's far more important to look at the facts. 

There's a good article in this month's Credit Union Management magazine about "capturing" Gen Y members. It highlights the good work of credit unions like Shell FCU and their iLife program. An important snippet from that article: 

"A lot of kids saw the struggles that their parents were going through and they didn't want to make the same mistakes," says [Traci] Archer [, Marketing Manager]. 

And as a follow up: 

iLife seems to have indeed spurred a youth movement within the Shell FCU membership. According to Archer, in the Spring of 2008, the mean age for all Shell FCU members was 47. In Spring 2010, the mean age was 41. 

That's an actual result. Hard to argue with facts. 

The article has great examples from a lot of other credit unions that went on a mission to recruit more Gen Y members and succeeded with enviable results. It's easy for young people to get disparaged by the media and the current climate. You can be a shoulder for them to cry on, as well. Make it known you want to create a lifelong financial relationship with them and start treating them with the respect and due deference you've shown the generation that sired them.

That bit of "data" that was being thrown around a while ago about how much money Gen Y stands to inherit? It's looking to be less and less likely all the time. The generation that we presume has been handed everything they've got is very likely to miss out on the big bonanza we've pictured them coming in to when we're all dead. Does that mean you're going to have thriftier, sharper consumers when Gen Y comes of age? Only time will tell, but you could certainly guide these young, pliable members in that direction. That is, if you're interested in having any members at all in the next ten to fifteen years. 

Pay-for-Referral: Putting Your Money Where Your Word-of-Mouth Is

by Ron Daly 

I was over at CU Water Cooler's website, looking at the links of the day for July 6. Quick note to other CU pros: why aren't you over there reading these great stories and links? Get with it. 

One that jumped out at me was the story from MoveYourMoney.org about NetPromoter Scores for CUs, Big Banks, Community Banks and Online banks. I think the title/intended message is a little misleading (35% say they'd leave their banks "if it were easier"...switch kit vendors, take note!). But there IS something to talk about in this article - that awesome NPS for credit unions! 64% said they would refer a friend or family member to their credit union.

We know that the big reason people don't switch from a big bank to a CU or community bank is because they're under the impression that a switch is inconvenient or even difficult. We know that more than half of CU members would encourage friends to switch. What's the missing piece of this puzzle? 

I say incentives. We work with credit unions all the time that offer "$10 for every family member referred" and similar promotions, but is there any way to spice up the offer a little? What about a MAJOR giveaway for most friends-turned-members? 

I ask because I recently watched this interesting (if a little daunting) video about game design in real life. Apparently, the concept of "experience points" is enticing to people. "Leveling up" turns a promotion for "bring in the most members" from a contest into a game. Everyone talks about their being no practical use for social media in finance, let's find a way to make it work. 

A contest idea for everyone:

Give current members points for every new referral, and set up social media "leader boards" that shout out the results day-to-day for each of the promoters. You don't have to make it video game themed, per se, but you should make your grand prize (for your first person to ~10,000 points or whatever) worth the time it takes to send out the information. 

An idea just for promoters:

If 64% of your member base is willing to tell non-members how much they love you, why not pay them for their time? If you have a smart survey program, you can sort out who's a promoter and who's a detractor at your CU - so, why not give only those promoters a special "put up or shut up" offer that rewards their referrals? Maybe it's the above contest and you give some bonus points to those members. You have so much data available to you, if you're willing to work for it and work with it. 

Some possible drawbacks:

Is there a sticking point when it comes to ages? The older you are, the harder it is to convince you to move your money. I'm basing that on no other research than my own opinion, because I've had the same accounts at the same credit union for thirty-seven years. I'd have to be really peeved to move my checking. It affects direct deposits, ACH, bill pay - yes, you can go change all that if you've only had a banking relationship for a few months to a few years, but nearly four decades? I'm one of those people that actually cares about my credit union. You couldn't drag me away, no matter the prize. 

So, where's the "fix"? How do you truly reward members for bringing in profitable new members? How do you REALLY sweeten the deal for those people who have had a relationship with their prior bank for ages? 

Your thoughts and comments are always welcome. 

TARP Banks Missing Payments! Time to Send the Repo Man?

by Ron Daly 

Read this article the other day: "More Than 90 Banks Miss TARP Payments". According to the article, 91 banks and thrifts skipped the May TARP payment, seventeen more than those that missed payment in February and 36 more than those that missed their payment in November. 

I don't know how that makes YOU feel, but I'm guessing you're not slowly clapping at your computer, impressed with the great strides made. I'm guessing you're in a state of disbelief and, like me, you find it insulting that for eight of these banks this is the FIFTH MISSED PAYMENT. 

Now, before I get too steamed, let's be fair - according to Treasury Secretary Tim Geithner, banks have repaid about 75% of the TARP money they got back in 2008 and the start of 2009. The impact on the taxpayer is expected to be around $105 billion all in all, which is down from an initial estimate of $341 billion. So not all the news is bad news on the TARP front.

But still - five missed TARP payments? How does any bank get away with that? I know you're not all "money people", but five missed payments on anything else nets you a visit from the repo man. 

Your car loan's not paid up and you haven't taken steps to talk to the bank? They're coming for it. Some big, burly guys are going to roll up to your driveway, put the thing on a wrecker and take it back to the branch. Simple, right? 

It's more complicated for banks. The CNBC article calls out Midwest Banc Holdings as an example of a bank that just couldn't cut it: 

In some cases, small banks are renegotiating the repayment terms. Midwest Banc Holdings, for example, agreed to swap $84.8 million in preferred shares issued under the TARP program in 2008 for $15.5 million in common shares. That would have meant an 80 percent loss for the government—and the U.S. taxpayer—on the initial investment. But the swap was contingent on the bank raising more private capital, which it failed to do. Regulators seized the bank in May.

Is there not more that can be done? Are we just going to have to eat the losses without any upside? AIG has already cost us something in the area of $180 billion, for which we get nothing. Foreclosures and housing numbers are still in rough shape and many "toxic assets" have yet to be dealt with by their holders. The oversight panel can keep an eye and raise concerns, but where's the repercussion for those that don't make the payments? While we're all so busy looking for "asses to kick", let's point our foot at those institutions who balk at repaying the taxpayer for OUR investment.  

What do you think? What do we do with banks that haven't paid? What do we "repo"? 

More Ads Coming Out of More Credit Unions - Will It Mean Business or Backlash?

by Ron Daly 

The New York Times did a run-down of credit union ads and the new face of credit union marketing Friday of last week.  The article (in my opinion) goes back and forth between "about time" and "really?" in terms of tone. There are some praise-worthy notes and some jabs that feel a little more like condescension than reporting. But maybe that's just me. 

This was accompanied by a "Bucks" blog post with videos and PDF versions of "anti-bank" campaigns from different CUs around the country. 

I really liked the above ad from America's First FCU. It's got an "anti-bank" element to it, but it ends on a high-note and isn't vitriolic. One aspect of many of the ads featured are actors pretending to be bankers. Really? You really can't come up with one single real-life example of "bankers behaving badly"? Watch the video below:

Visit msnbc.com for breaking news, world news, and news about the economy

Remind me: When's the last time a group of credit union employees tore up the highway in a Lambo? 

There are folks who are concerned all this "bank bashing" is counter-productive. One such person is Jason Sherrill, who wonders if this method of advertising has lead to more people being against financial institutions altogether...and to consequences such as the Durbin amendment. 

I want you to tell me what to think about all this. Are these anti-banking campaigns going to have a negative effect on membership and on our credibility as an industry? 

I set up a simple survey via our online survey tool that will collect your data and I'll print the results when I have an "n group" of 50 voters. 

Talk to me, credit unions. What say you?

Go to http://tinyurl.com/soapsurvey1 and tell us what you think.

[Thanks again to friend-of-the-blog Jeffry Pilcher and The Financial Brand for bringing these stories to our attention.]

Don't Become Mr. Shoehorn - Approaching People on Their Terms

by Ron Daly 

There's one of those guys at every party. Nobody's sure whose friend he is. Nobody knows where he got that leisure suit. And he's trying to get in on everybody's good time - jumping into conversations, telling jokes nobody gets that aren't that funny anyway, and insisting everyone do the macarena. He doesn't just want to enjoy the party and get to know people, he's got to have everyone's attention or he. Will. Die. 

His name is Mr. Shoehorn, and he's spoiling it for everybody. 

Mr. Shoehorn gets an email address

Why bother talking about this guy? Because he's everywhere these days - the Internet has given him a new place to thrive. In the past 20-25 years, email has evolved from fun convenience to necessary communication channel. But the one thing that will never change is the presence of spam. Sure, change all the policies and add all the filters you want, but it's not going to stop spammers - they'll just keep shooting it out there. 

In a recent article from eMarketer, consumers were eager to share what they wanted from an email marketing messages. The results weren't surprising: 

Interchange Fees and Credit Unions - Members Taking Action

by Ron Daly 

Interchange fees are the topic of many blog posts in the industry these days. Some posts are for changes, some are against, some are matter-of-fact and some are downright angry. One alarming article released yesterday says that 90% of yearly interchange revenue could be lost, which comes down to "$15 to $35 per debit card per year". 

CUNA has been pressing the issue in its daily News Now emails. Today's story deals with the Treasury and what Dan Mica called the "most serious threat" facing CUs at this moment in history. But it was a different story (and a different reaction by our company's clients) that caught my attention. 

Read this excerpt from the News Now article, "Grassroots interchange opposition, strong and growing":

WASHINGTON (6/2/10)--While the halls of Congress have emptied for the week, grassroots credit union advocacy regarding interchange legislation continues this week through both legislator-led town hall meetings and credit union activism on several fronts.

One of those fronts is a Credit Union National Association-backed effort to verbally and electronically reach out to representatives, and this communication effort resulted in over 80,000 individual contacts as of Tuesday.

CUNA is asking credit union backers to urge their legislators to oppose federal intervention into the current interchange rules. An amendment offered by Sen. Richard Durbin (D-Ill.) which was successfully added to the Senate's regulatory reform package would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions. CUNA has recently said that this rule change forces the Fed into the role of a price-fixing body, when interchange fees should be driven by market forces.

State credit union leagues have also chipped in to back credit union concerns, and Virginia- and Louisiana-based credit union leagues are among those that have joined state-level small banking associations to publicly oppose federal interchange intervention.

Some examples of emails sent to members, compelling them to call and email their leaders and take action: 

From Horizons North Credit Union: 

 

From Shell Federal Credit Union: 

 

From Belvoir FCU : 

 

They're simple emails with a simple message: "Interchange is going to hurt the credit union. Contact your leaders now and tell them to act in our mutual best interest."

What does it cost you to send an email to your members? Hopefully, the answer is "not much". How much will interchange fee changes hurt your CU? The answer is probably "a lot". Risk versus reward, people. Members need to know about things like this and when it comes to asking them to do something as simple as sending an email, that's only about three minutes of their time. Never hurts to ask, right?

So, here's your million-dollar-question-of-the-week: What's your credit union doing to encourage calls and letters to legislators from members? Tell us about it in the comment section.

Reg E Opt-Ins, Part 2: Compelling Arguments

by Ron Daly 

Our last post walked through some of the headaches associated with Reg E opt-in programs at credit unions. Members are reportedly planning to throw away their opt-in forms and not bother with overdraft protection, and there's really not much we can do other than make a compelling argument as to why members should enroll.

An article from CU Journal from the 17th of this month has advice from Rory Rowland of Rowland Consulting. I thought some of it was worth sharing with you.

Some mistakes that Rowland says CUs are making: 

• Waiting to see what happens: "This is not a healthy strategy. Get a plan of action. Place an (opt-in) banner message on your website to encourage people to opt in. When members overdraw, send them and e-mail and tell them about the new regulation and that they need to opt in. If they are in the top 29% of your abusers, call them." 
• Lack of monitoring: "You need to know how much income you are making from courtesy checking-20% to 29% of your members give you 90% of your NSF income. Target those top 29% and get them to opt in before July 1."
• Front-line staff have no idea what they are doing: "Do you have talking points written for front-line staff to tell members how to opt in?"

Waiting It Out, or Just Not Getting On Board?

by Ron Daly

There's an old joke about a guy who lives at the foot of a volcano. The volcano erupts, spilling lava toward his home and his village. His neighbors hop in their car and say "Our car is fast, we can get away in time. Come with us." 

"No," says the man, "God will come for me and save me from the lava."

Later on, the lava has reached his porch and burned off the front steps and the siding. The man climbs to the second floor of his house and a military tank full of survivors rolls by and says "Sir, jump onto the tank. We can't get burned and we'll keep you safe."

"No," says the man, "God will come for me and save me from the lava."

The lava gets deeper, and the house starts to dissolve. The man must climb up to his roof. A helicopter drops him a rope ladder, saying "Climb up! Climb up!"

"No," says the man, "God will come for me and save me from the lava."

The man gets swallowed by the lava, and is reduced to ash.

He gets to Heaven and talks to God. "I thought you'd save me!" the man said to the Almighty.

God looked confused. "I sent a car, a tank, and then a helicopter - what more do you WANT from me?!?"

Which reminds me - Reg E is still an issue. 

Get with the program! 

Reg E is an issue that threatens everyone in the financial services industry - it's going to affect income and capital, it's going to affect member relationships, and it's going to affect the bottom line. Credit unions across the country are scrambling to try and find a way to get folks "opted in" before the deadline on August 15 (yes, there's a July 1 deadline on new members, but August 15 affects everyone). There's a lot of worry, as some credit unions/banks just can't do without the fee income. And when the next step is a choice that hinges on the members and customers, the results could be a blessing or a curse. 

Blessing: the income still exists, members just have to opt-in to overdraft protection (or courtesy pay, whichever you prefer). Which means they'll get their way at POS and pay for it later, and the CU can collect on the error.

Curse: everyone is automatically opted out after August, and that's going to mean a big hit on income. Whether they come back to overdraft protection or not is at their discretion. 

Everyone knows that Bank of America announced they were doing away with overdraft fees and came off looking like a good guy as a result. But they're still offering overdraft protection, they're just making it so that it takes the difference out of your savings or credit account and charging a $10 fee for it, according to this NYTimes.com article. When every headline related to that story says "Bank of America does away with overdraft fees" and you're asking people to CHOOSE to be assessed those fees, how do you win? 

What's worse, according to this CU Journal article, is that members are planning to throw out their opt-in forms when they get them, and somewhat more disturbingly: 

The findings should be noted by credit unions and banks, said [Brian] Beach, [CEO of ACTON Marketing], because those customers will not have overdraft protection when they overdraft, will start to have their retail purchases denied and most likely will move their accounts elsewhere. “The psychology of overdraft users is such that they are extremely averse to having their debit card transactions denied at retail,” said Beach. “If they begin to be denied, they will not just re-opt-in with their current bank or credit union. Most likely they will cut and run.”

So, here's the question: how obvious is your car, your tank, your helicopter? Will a person who is at risk to use this service you've provided to them for years know what happened when their transaction is declined? Or are they just going to blame you and leave for a bank? In a new, debt-conscious America, will people want the chance to go over the limit at all? 

The lava's on its way. Get as many folks on board as you can. And if they get "burned", remind them - they had (and still have) a chance.

Your feedback is always welcome. 

EDITOR'S NOTE: 

 Full disclosure time. DigitalMailer is offering a Reg E Opt-In package that uses email and secure online forms/databases to record member opt-ins and encourage more sign-ups. 

Email us at info@digitalmailer.com, let us do a walk-through of the system for you, and if you tell us you're a Soapbox reader, we'll give you a discount on the system. 

This is your call to action - get started now. 

Tired of the Bank? CBS Says "Dump That Sucker"

by Ron Daly

We've been talking about the "Move Your Money" movement for a while now. CBS's EconWatch published a story earlier this week titled "Hate Your Bank? Dump That Sucker For a Credit Union!" It came with the video below and spelled out the differences between banks and CUs. [Note -- email readers, please click over to the website to watch the video.]

We've had quite a few of these in 2010. Do you find your credit union gets more memberships/inquiries because of them? What do you wish these videos would say? Are videos like these something you share with members via email or your website, like TDECU does on their home page? 

Tell us all about it in the comment section.