Season's Greetings from DigitalMailer's Family of Blogs

Thanks to all our loyal readers for another GREAT year of blogging. We've covered industry news, met some great people and learned a lot about our clients, friends, and fellow bloggers. 

Please take some time in the next few weeks to browse our archives. We'll be out of office/offline until after the new year. We hope everyone out there has a safe and happy holiday and that 2010 is a great year for everyone out there.

Thanks again, and we'll see you in '10! 

Your chance to join the NACUSO Technology Advisory Board

From the CU Soapbox and Robbie Wright of the Life and Times of a CU Employee comes an exciting new contest - read more below!

Most everyone in the credit union industry has heard of NACUSO.  The National Association of Credit Union Service Organizations is the trade association for CUSO’s across the nation and has been doing great work in encouraging collaboration between credit unions.  NACUSO has a number of advisory boards and I happen to sit on their Technology board.  As is the norm with advisory boards, our membership is fairly fluid and we are always looking for new talent and news ways of using technology to further credit unions.

We currently have an opening on the Technology Advisory board and will be looking to fill that position by the end of January.  In the same vein as Young and Free and Forum Solutions‘ search for a speaker for their symposium, we will be hosting an online video contest for our vacant spot.

If you think you have what it takes to encourage credit unions to collaborate,  adopt new technologies, and want to be on the bleeding edge of financial services technologies, bust out that video camera.  The submission deadline is January 15th and we’ll announce the new member on January 29th, 2010.

To submit your video, upload it to a video sharing site such as Vimeo, Viddler, or YouTube (anyone with robust sharing capabilities) and shoot an email with the information .  I’ll post your submission to the NACUSO website.  We’ll throw a poll up on the website beginning in January to let everyone start voting and give us some insight before we make a final decision.  Feel free to leave a comment with any questions or shoot me an email.

Oh, by the way, you might want to know what you are getting yourself into.  At this point, we have a monthly conference call that lasts less than an hour and tend to trade emails back and forth throughout the month.  This may change slightly in the future as new projects come along, but that’s about it.  Ideally, one should be able to attend the NACUSO Annual Convention each year, but it is not mandatory.

We’re looking forward to everyone’s submissions!

CBS touts Credit Unions. Why wouldn't we?

by Ron Daly

You've probably been laboring over your budgets here recently, getting ready for 2010. You've probably been wondering, "What's the best way to express the credit union difference to the unbanked or those unhappy with their bank?" 

Well, the people at CBS are doing a little of your heavy lifting for you. 

This piece, called "Credit Unions Better Than Banks for You?", ran earlier this week on the CBS Early Show. Their financial correspondent, Vera Gibbons, talks about what CUs have to offer (mostly in terms of loan rates) that banks just can't - or won't. 

The story also focuses on misconceptions about CUs. Apparently, there are still people in this country that think CUs only cater to niche groups. The reporters do a good job of dispelling that rumor and letting people know there's a credit union out there for them.

If you read the whole article linked above (or watch the video below  - email readers, use this link to CBS news video site - and sorry about the commercial, CBS has to make their money somehow), you'll get a sense of what your average joe knows about credit union membership. The answer? Not much. What are you doing to let members know they can join a credit union, or more specifically, YOUR credit union? Do they know their deposits are insured? Do they know you offer competitive rates and better service? 

Is this story and video on your website or blog? If I were you, I'd start linking to this.

I tell you what, I'll do you one better. 

I had my creative media director whip up this button this morning. It's a nice, bright blue, should fit comfortably on any homepage or blog. It's in two sizes, one 250 pixels wide, one 150 pixels wide. 

 Small One

 Big One
 

Make it a button on your homepage or blog that links to the video we're talking about here today. Simply download these button images and use them where you please to promote this story.

Here's the link again: http://www.cbsnews.com/video/watch/?id=5989790n

Make sure it opens in a new window so your potential members can keep browsing around. 

THERE. You don't have to bother marketing, just get your web manager to throw that where you want it to go. You don't need your own home-grown YouTube video. You just need to point them to this CBS story.

We're doing the work for you here. Tell potential members what you have to offer over the banks today! I'm certain someone will say that's not a good idea, but why? Just do it. Don't waste this opportunity to get people interested in joining YOUR credit union.

(PS - If you're worried about rights issues/creative commons/whatever, don't. This image is a total freebie. Scratch that - this whole STORY is a freebie. Reblog it, repurpose it, reTumbl it, Retweet it, etc. I'll keep an eye on our analytics to see how far our story/images go. Just make people pay attention to this endorsement of CUs.)

CHALLENGE: Put this on your website, and challenge five others to do the same. Maybe we can get some people to pay attention. 

Watch CBS News Videos Online

Where are all the Credit Union saplings?

by Ron Daly

There are two things I never want to do: 

1) Become President of the United States,

2) Start a credit union.

I guess I'm not alone on #2, since only two credit unions were started in 2009 (click here for the story). Only two?!? That seems...well, not too far off, given what we know about the past year. Failures, mergers, and acquisitions in the financial industry have become part of the territory. While banks have failed at a much higher/faster rate than CUs (106 bank failures to ~20 CU failures, according to this story), credit unions still have cause for concern.

Does that mean that the need for credit unions is waning? I don't think so. There are underserved communities that could really benefit from a credit union. Consider forestry - when a tree is cut, dies, or is destroyed by fire, a new sapling must be planted to bring the forest back to life. But where are all the credit union saplings?

Part of the problem is in scale. How do small, newly-formed CUs gain ground when they have to deal with competition from a decades old, multi-million (or billion) dollar credit union or bank? So much goes into bringing services to members that many startups are hamstrung by the "need" to bring everything members want the moment your charter is approved. "Start small", it seems, is no longer an option. 

One possible solution was put forward by Robbie Wright over at "Life and Times of a CU Employee" came up with an interesting white-paper called "Outsourced CU". His suggestion? A CUSO that starts credit unions. They manage facilities, they provide training, they handle marketing, they provide insurance, etc. This basic skeleton of services would be brought in to support the chartered CU and help it find and serve its market. Is now the right time for a service such as this?

I don't know whether this CUSO would prompt more folks to start up CUs, but I will say this: I do know WHAT the future of an industry is when new players don't enter the industry.

Your comments/thoughts are appreciated, as always.

What do you MEAN, all your marketing's spent on calendars?!?

by Ron Daly

Came across this article on the brand new CU Water Cooler blog. It's called "Top Five Myths You Hear Credit Unions Say" by Mark Arnold. It's worth the read, and it made me want to speak out on two of the five "myths". 

(2) We can’t afford to do __________________

Insert your own project, new product, technology, marketing idea or anything else that gets pinched in a tight budget. Let’s be honest: the truth is you probably can afford to do the initiative, you are just choosing not to do it. So don’t blame money: blame your priorities. If you really want to accomplish your goal then you might have to tweak other areas.

I tend to agree with this. True, many CUs have been dealing with diminished budgets and a smaller staff, but that might just be the right time to bring in a creative solution. Such was the case recently with Northwest FCU's member relations department and their collection email series (click here to read about this). DigitalMailer gave a hand, saved them some money and continues to streamline collections calls.

(4) We have to reduce the training and marketing expenses because of the budget 

 Every year is a tough year on the budget. But if you continually cut the training and marketing budgets in the short term, you only harm your organization in the long run. Stephen Covey said it best, “If you have to cut things out you just cut people; you cut training and development; kill the goose that lay the golden egg; for a short term period of time you improve your profits. But then you’ve liquidated the human resources…in the long run you have to live with the consequences of a dead goose.” The truth is you don’t have to cut training and marketing; now is the time to invest in these key areas.

When it comes to marketing, cutting back is always a heartbreak for the folks that make it happen. 

Denise Wymore has been writing about the death of "traditional advertising" on her blog for the past week or so (click here to read her "RIP" series). Lots of folks have had to readjust, pushing and pulling from print, billboard, and even phone book (that post is a funny one) to get into email marketing and other forms of electronic marketing. Creative marketers find ways to MAKE their budgets work - even in a recession. 

One thing that was (and is) a pet peeve of mine is branded calendars. Calendars are expensive to print, exhaustive to get rid of and are useless to most working professionals. When your phone can plug into your computer and share a common calendar that sends you little messages when your to-dos are coming up, a little pocket calendar doesn't mean much to you. There are whole stores that just sell calendars with whatever you want as the month-to-month theme, why bother shoving stock-photos of mountains and grass at people? Giving away calendars is a money dump for your marketing budget - period. Let's put that money to better use. 

Come on, I KNOW you people have your pet peeves about what your marketing budget "has to have" every year. Tell us all about it, and what you'd do with that money if you could spend it how you wanted.

No Need for Bite - the Bark is Bad Enough

by Ron Daly 

Comment cards at a restaurant. The Customer Service Department. "How's My Driving?"

Before the Internet, when you wanted to register your pleasure (or displeasure) with a company or establishment, you wrote: 

1. YOUR First and Last Name
2. YOUR Phone Number
3. YOUR Address
4. YOUR Compliments or Complaints

on a little card, or you recorded them on a voicemail service. Someone would get back in touch with you, via letter or phone call, and they'd give you a coupon or a discount or even a simple "thanks". 

This was called customer relations, or member services. Making sure you were staying the course by providing consistent quality and service and not committing any major errors. You thanked the consumer for their time and moved on or made adjustments. 

It used to be that your bite had to be as big as your bark. But behind the veil of the Internet, even a Chihuahua sounds like a Great Dane. Now people can insult or degrade your business as much as they want, anonymously. 

The Peanut Gallery

We talked a few weeks ago about the lady that stopped paying her credit card bill because of the rate change - how she went on YouTube and read her bank the riot act (click here). She got her rate changed back. Quite a David and Goliath story, yes? Well, most folks aren't interested in taking down Goliath. They just want to throw rocks. 

Sites like Angie's List, Yelp, and Chowhound like to tout their helpfulness with finding the best in services, entertainment, and food, based on other user's reviews and input. NetPromoter scores are there to pry honest feedback out of your membership and help you gauge your service. This is web commentary at its best - giving you honest responses from average folks. If the service isn't great, explain WHY. If they're giving you five stars, describe why you're worthy of those five stars.

At its worst, web feedback is a nightmare of swear words, tirades, jabs, and misdirected anger. It's called "cyberdisinhibition", where users feel able and, in many cases, eager, to give you an earful because the internet gives them the ability to do so and an environment with seemingly no consequence attached. 

Take a look at this chart from eMarketer: 

That can lead to positive and negative behaviors alike. Users are more likely to feel able to meet new people or be empowered to do something they wanted to. But they were also more likely to “lash out” on the Web when they had something to say about a company or brand. One-fifth of Internet users, including almost one-quarter of men, had done so.

So, what does that mean for you? If people are being jerks online, just ignore them, right? 

But ask yourself for only a moment what drove someone to this level of vitriol. Is the wound they feel you gave them actually self inflicted, as is often the case with "overdraft backlash"? Are these people just jerks, are they blowing off steam, or is there something you need to weed out of all the rabble-rousing? 

The truth, according to Daniel Goleman (click here - story midway down page), is that there are lines people draw in normal social engagement - there are certain things people will not say, but will write, and will not write, but will type into the comment section of a website. The habit breaking comes from facing down these people and asking them what you can do for them/what you did TO them. When cyber bullies start attacking a target online, their reprimand must not also come from online - the playing field is level there. Instead, it's up to the authorities in that situation (a teacher in Goleman's situation, a customer service rep in business) to intervene and bring things offline and in focus.

To Qualify

How do you qualify online responses, then? See what the user/member is willing to tell you about themselves. Did they leave an email address? Email them personally, ask what the issue is. Is there a picture attached to their comment? A website? How willing is this person to let you know who they are? 

The anonymity of the web is the generator that powers a lot of this behavior. The cycle-breaker is not just listening to people complain, but doing something ABOUT their complaints. Surprise your membership by showing them you're paying attention. Large media companies and banks don't care what people have to say when they're saying it anonymously. But a video that clearly identifies the person, the problem, and their level of dissatisfaction can bring even one of the biggest banks in the country to make a change.

More  than lashing out at companies, people feel empowered by online communication. They feel like they have the courage to make demands. While not all their cards are on the table online, finding more information about them and through them is simple. The real question for your credit unions out there: are you brave enough to listen? 

Link Alert for CU Soapbox, 12/01/09

ATTN READERS: 

It has come to our attention that the website youwalkaway.com, mentioned in today's CU Soapbox post, may try to download spyware or malware to your computer if you visit their site. 

While we cannot confirm the nature of the download, we are encouraging our readers and subscribers not to visit the youwalkaway.com website. 

Our story has been changed to remove this link, and while youwalkaway.com was featured on (and linked by) ABC News and NPR, we suggest you not visit the website, no matter who is linking to it. Better safe than sorry. 

We at the CU Soapbox would never knowingly point readers to a site that was disreputable, dishonest, harmful or offensive. We apologize for the inconvenience, and hope you continue to enjoy CUSoapbox.com as a source of credit union talk and information. 

Thank you, 

The Soapbox Staff

What Did We Learn?

by Ron Daly

2009 has been a year of learning. We've learned all about credit default swaps. We've learned how badly our new members had been treated by their former big banks. We've learned how to do more with less when it comes to marketing budgets, collections budgets, staff shortages - it's been a make-or-break year for the industry, to say the least. 

Here's some basic lessons: 

1) The amount of financial advice out there in the world is astounding. The quality of that financial advice is embarrassing. 

2) Just when you think our industry has hit the bottom of the problems we're facing from this recession, someone throws us a shovel and yells "keep digging". 

Let me cut to the point here...did you ever think we'd be looking at a time in our country when walking away from a mortgage was a good idea? How about a time when people recommended it? 

People like Dr. Brent T. White. A law professor at the University of Arizona, Dr. White recently published a paper titled "Underwater and Not Walking Away: Shame, Fear, and the Social Management of the Housing Crisis".  

His recommendation? The 15-million people with underwater mortgages should just walk. 

15 million people? Let's be optimistic and say those people only borrowed $300,000 on average. That's $4.5 trillion dollars that'll never be recouped. For better or worse, the housing market will never again be what it was. So banks and CUs won't be able to unload those houses, nor does the land beneath them necessarily mean anything to anyone, as developers in personal and business real estate aren't making any moves until the picture's less bleak. Whenever THAT is. 

What's more, it doesn't seem as though Dr. White is in the minority. This story from NPR.org highlights "walk-aways" and a service designed specifically to help them work toward a strategic default.

This isn't a new problem (that NPR story is from two years ago, when the bottom just started coming up at us). A segment of this Newsweek piece from March states: 

The study is based on the data of some 45 million properties that carry a mortgage, which accounts for more than 85% of all U.S. mortgages. The data was filtered to include only properties valued between $70,000 and $1.25 million. 

The most severe "underwater mortgages"—mortgage loans that are 125% or higher than the value of the property—are in five states: California (723,000), Florida (432,000), Nevada (170,000), Michigan (128,000), and Arizona (122,000). Underwater homes are of serious concern because for some homeowners there is little incentive not to walk away and allow the home to fall into foreclosure. Foreclosed homes drag down the prices of neighboring properties, possibly dragging more homes underwater. 

A veteran real estate broker in Las Vegas who declined to be named said that in 2004 there were only 2,000 homes on the market; now there are some 20,000 and growing. "Everybody became crazy," she said. "In certain areas [home prices are] off 60% from the peak. It's really sad because there's no equity and people can't refinance."

We're looking at a quicksand situation here. If people start walking away from their mortgages on "good advice" like that mentioned above, it will just topple what little is left of the housing market like a string of dominoes. And whatever happened to "promoting thrift"? We must not be doing a great job of that, considering the number of bad mortgages floating around out there. But, then again, maybe people weren't as willing to listen to us "conservative lending institutions" then as they are now. Is now the time to remind people that running away from your crummy mortgage will hurt you? When and how can we make people learn that cut-and-run won't do?

I haven't read Dr. White's entire paper, but I do know this - a default isn't a good thing. And no, I don't agree that you can recover from it inside of two years by paying down the balances on your cards and being otherwise responsible. Where do you live after you've been booted from your home? How do you start recovering? Because like it or not, those two years back to your healthy credit rating are going to be a tough slog.

I'm sure there is a great counterpoint as to why consumers should just walk away...I'd love to hear it.