Guest Author Marvin Umholtz: Stop Feeding the Strategic Crocodiles Snapping at CU Heels

The following strategy-focused overview candidly dissects the challenges and risks that are dangerously snapping crocodile-like at the heels of credit union leaders.  The mere fact that there is so much change going on and so much change that could go on in the 2012 to 2013 timeframe makes credit union’s reluctant to take major strategic steps when significant energy and resources might be demanded to manage through these unprecedented challenges.  Although potentially unsettling for those who like easy answers, this overview’s’ fundamental premise is that today’s credit union leaders must thoroughly understand what they are up against and mitigate it.  Credit unions aren’t paranoid if malignant forces are truly out to get them!  Use this overview as a discussion-starter at the next Management Team or Board of Directors meeting. 

Strategic Macro-Trends Affecting 2012:

• Today’s political, legislative, and regulatory risks far exceed the traditional operating risks – credit, interest rate, liquidity, transaction, compliance, strategic, and reputation.  The crushing regulatory burden exacerbated by compliance’s escalating cumulative complexity now drags on the credit union business model and threatens its future viability. 
  
  
•  The polarized Congress and the gridlocked legislative environment that results cause strategic uncertainty in financial services regulation, mortgage finance, and the economic recovery.  The November 6, 2012 elections could lead to a massive macro-directional overhaul of the federalgovernment.  That added ideologicaluncertainty makes scenario planning and financial modeling difficult at best – perhaps impossible. 
  
  
• Many credit union officials claim that the National Credit Union Administration (NCUA) Board has been relentless in imposing its interventionist agenda on credit union decision-makers.  On a regular basis the NCUA Board demonstrates through its policy directives, supervisory edicts, rulemaking, and enforcement actions that its priorities too often stray from an emphasis on safety and soundness toward micro-management and counter-productive social engineering.  However, the biggest burning question – How much is the corporate credit union crisis resolution going to ultimately cost? – remains unanswered.
  
  
• In addition to its own pre-disposition to re-regulate credit unions, the NCUA is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Consumer Financial Protection Bureau’s(CFPB) statutory mission to examine for and enforce additional complex and costly requirements on credit unions.  The NCUA is destined to become a branch office of the marketplace-controlling CFPB enforcing a “level playing field” of fewer consumer choices and limited credit availability.
  
  
• The global economic situation has not been this troubled in decades.  The U.S. Federal Reserve System Board of Governors has promised to keep interest rates at unprecedented lows through 2014.  Only slight improvements are expected in overall economic growth and employment over the next several years.  Consumers will continue to focus on deleveraging their debt and limiting their spending.  The federal debt continues to grow and the political inability to deal with demographically unsustainable entitlement programs embeds more uncertainty into the fiscal dynamic.  The wearying margin-less economic situation obstinately refuses to go away.
  
  
• Additional strategic hot topics: net worth expectations, capital access, deposit insurance reform, moral hazard, too-big-to-fail, systemic risk, loan portfolio mix risks, charter conversions, prepaid cards, consumer activist groups, financial literacy, credit union service organizations, participation loans, partisan political polarization, and many specific credit union-identified hot topics.  
  
  

Key 2012 Strategic Takeaways:

1.     Fundamentally Different Decade Ahead.  The next decade will be fundamentally different – economically, competitively, demographically, culturally, and politically – from the preceding decade.  Using the same strategic approach to the financial services marketplace as in the past would be insane.  The economy in particular is expected to inch its way along impeding everyone’s business plan.  To keep the credit union’s metaphoric head above water, its leaders must fully understand the prevailing undercurrents that radically impact on strategy.

2.     External Risks > Internal Risks.  External risk factors – especially political risk, regulatory risk, and complexity risk – will have more impact on a credit union’s strategic success than will internal factors.  What one does not control will exceed what can be controlled.  Get used to it – uncertainty and how well it gets incorporated into strategy is critical to a credit union’s successful operation.

3.     Federal Government Not Friend.  The Congress, the National Credit Union Administration Board, the Consumer Financial Protection Bureau, and the Federal Reserve Board have their own political agendas and are not a credit union’s friends.  Don’t let them fool anyone into thinking otherwise.  Instead, expect them to keep making things more difficult.  Treat their increasingly costly, complex, and burdensome demands with deference – but validate, verify, and when appropriate challenge their directives.

4.     Ultimate Stabilization Costs Unknown.  Regardless of whether the NCUA Board’s loss estimates for the corporate credit union legacy assets are realistic or not, the Board sets the Temporary Corporate Credit Union Stabilization Fund(TCCUSF) assessment based upon those estimates and they drive the credit union’s costs.  Nobody knows for certain how deep the multi-billion dollar TCCUSF hole really is or how long it will take to pay it off.  Plan for the worst, hope for the best.

5.     Industry Infrastructure Fractured.  As a direct result of the 2008 financial system meltdown, the current credit union industry’s legacy infrastructure – including its in loco parentis regulators, non-risk-rated deposit insurance regime, and even its traditional trade associations – are showing signs of rust and structural weakness.  Proactive demolition and reconstruction of these faltering institutions sans dogmatic platitudes, entrenchedoligarchies, and one-size-fits-all approaches could go a long way toward restoring real return on investment for each increasingly diverse and independent credit union.

6.     Heavy Mortgage Loan Mix Untenable.  In the absence of a serious refocus of lending strategies credit unions are at risk of becoming the next Savings and Loan debacle.  Collectively credit union loan portfolios are dangerously loaded with low-return fixed-rate mortgages.  Many credit unions also rely heavily on originating and selling to the secondary market that is currently in flux due to the conservatorship of Fannie Mae and Freddie Mac, the glaring absence of any private market investors, and Congressional proposals that could radically reduce the demand for mortgages.  It’s an accident waiting to happen that credit unions must anticipate and avoid.  

7.     Non-Bank Competition Toughest.  Big banks, community banks, thrifts, and even other credit unions are not a credit union’s biggest competitors.  Big box retailers, insurance companies, payday lenders, and other non-banks are running circles around traditional federally insured financial institutions and it will only get worse because most of the non-banks’ offerings are convenient, uncomplicated, and consumer-friendly.  Credit unions, and especially Congress and regulators, should learn from these competitors’ successes rather than try to stamp them out.

8.     Boomers & Seniors Rule, X & Y Drool.  Aging baby boomers constitute a major portion of credit union memberships and along with many seniors dominate credit union boards of directors.  Generations X, Y, and the very young will not be a credit union’s salvation in the near term no matter how hard they try to attract those smaller demographic cohorts.  Each credit union needs to find out what their existing baby boomer members want and find a way to profitably give it to them.  Neglecting boomers could be fatal to the institution’s bottom line.

9.     CU Business Model Threatened.  The traditional low-cost, high-service credit union business model seems increasingly at risk from its cumbersome governance structure, limited access to capital, reliance on loan and investment income, legacy modest means mission, innovation-killing hyper-regulation, and inadequate products and services authorities.  Credit unions desperately need additional ways to generate income, broaden service offerings, streamline delivery systems, and generate scalable growth.  The credit union business model will need to evolve in ways that will make the traditionalists uncomfortable, but the alternative is stagnation.  Credit union leaders must proactively advocate this business model evolution since it won’t be simply handed to them. 

10.  Urgency for Change.  Lead, follow, or get out of the way.  Credit union elected officials and management executives that are unwilling to be drivers of change should seek early retirement.  The future belongs to credit unions that are committed to and intensely involved in change.  A change management skill-set and a sense of urgency will be required if a credit union wants to emerge unscathed at theother end of the coming decade’s strategy-altering uncertainty-laden gauntlet.

 Have questions/comments for Marvin Umholtz? Leave them in the comment section below. 

Everybody's Reviewing It! Why Gen-Y Depends on Other People's Opinions Online

by Ron Daly 

Ah, Gen-Y - the "El Dorado" of marketing demographics. People are hazy about where they are, what they do, and the richness of the treasures they possess. And after about five years of hearing how critical it is to win over the Gen-Y crowd, we get a little insight into how they buy and behave with their money.

One of the critical things a business (or credit union?) must do, according to a study done by Bazaarvoice, is point Millennials to user reviews (which they describe as "user generated content", or "UGC"). The opinions of other online users of a product or service weight heavy, particularly with regards to electronics. They're more eager to hear from people with "relevant experience" and they're three times as likely as the Baby Boomers to ask for people's opinions on a social media network. 

Why would the opinion of someone a Gen-Yer has never met mean more than their real-world friends and family? Well, in the real world, maybe not. If someone runs up to you on the street and screams "BUY AN iPHONE!", it might not make you break out your wallet right then and there. But when Bazaarvoice means "stranger", I'm pretty sure they mean a "reviewer". And what does a review have? 

• A star rating - Quick and easy. If there are five possible stars and three of those stars are filled, that's a metric. There are typically a row of those stars followed by a number in parentheses indicating how MANY people have responded/rated that product. If a product has four-of-five stars and a thousand reviewers, well, that product is probably pretty good.
• Short write-ups - A short review says a heck of a lot. If it's thoughtful and fully formed, it tells you the reviewer took their time and is a smart, well-informed consumer. If it says "Dis produkt is h0rrible, teh wackness"? That person's probably not so trustworthy. 
• A link back to more information - Some online channels will give you permission to see other things that reviewers have reviewed on that site. This helps you figure out whether a person is ALWAYS negative or just negative about the thing you want to buy. 

Online reviews are interesting and helpful because not only are you evaluating a product, you're evaluating its users. But you don't see a lot of online reviews on a CU's website, do you? At least, I don't. 

Why is that? 

According to that same study (presented in a friendly little infographic on this site), 29% of millenials won't make a decision about credit cards or insurance without feedback from other users. Maybe more important: 

"Most Millennials say companies that include customer feedback on their websites are "honest" (66%) and "credible" (53%). "

Pretty great first impression, right? Think that could work for CUs? Who's willing to start this out? We know of a few CUs over on Facebook that let Facebook users review their products, but who's going to up the ante and include a place for reviews on their actual website? Is some CU out there already doing it? 

And before you go on about how you want to manage all your content and control every aspect of your "online presence", consider that over six hundred thousand people in the US moved their money in the past three months and attributed that switch to Bank Transfer Day, an online event that largely happened TO credit unions, not BECAUSE of them. 

Food for thought. 

Want to "review" this article? Have some insight? Talk to us in the comment section. 

 

 

Go Ahead, Stay Under the Covers - the Monsters Can Still Get You.

by Ron Daly 

A while back, the credit union Twittersphere had a conversation about blog comments and whether a blog is really a "blog" if it doesn't allow any feedback. 

"A blog without comments is still a blog, it's all about frequency of posting," some said. "A blog without comments might as well be a static web page," said others. Good examples on either side, but my question was always, "why block comments?" 

So...why block comments? I think I know why. It's because someone might say something bad. 

I've heard a lot of hubbub about "negative feedback" in the past five years. With the emergence of social media and the acceptance of blogging as a medium, people immediately skim over all the basics and jump right in on asking, "What if someone says something negative?" 

What if, indeed? 

The Monsters Are IN the Bed 

The idea of "monsters under the bed" isn't new to any parents out there...we've all had to check for them at some point. We know the truth, but if it makes our little ones feel safer? Sure, we'll check. We'll put in a nightlight, or we'll buy an extra teddy bear. We'll make sleep possible and, hopefully, lasting. 

When the "monsters" are not monsters but are instead an unsatisfied member? Don't worry about them being there or not being there. They're there. There IS a monster there, not under the bed, but in the bed. The question is, do you want to DEAL with the monster or PRETEND it isn't there? 

I think the term of choice for bloggers/social media managers/marketing people who consciously ignore bad feedback or go out of their way to hide it is "tone deaf". I also think there's something really sad about wanting to "go after" commenters or social media users who say something negative. Want to see where that gets  you? Read this story about Boners BBQ attacking someone for leaving a bad Yelp review [ABC News]. 

And while we're on the topic, what about social media from INSIDE the workplace? "We don't want people saying anything that might make us non-compliant!" 

And you manage that...how? Turning off social media? You turn off social media on their network, that's not going to stop anyone from doing something anti-compliant from home or on their phone.

"What if they complain about the credit union or our members?" So, let me get this straight - that's something you DO NOT want to know about, AT ALL? 

Monster Resistant, Not Monster Proof

The truth about business is, you'll never make everyone happy. You'll make some people really happy, you'll be fine with a lot of people, and you'll get a couple of folks good and angry. Getting the angry folks back on your side isn't a matter of just throwing money at them - sometimes, complaints and gripes are solved through careful evaluation. 

Let's run this down: 

• The complaint is anonymous and full of cuss words - Probably not something you need to burn a lot of energy working on, as it's just some punk playing with your comment fields or being a jerk on Twitter or Facebook. Moving on...
• The complaint is angry, but seems to be about a genuine problem and has an email address attached - Why not reach out to that person via their email and ask them more about the problem? For every one of these complaints you get, you're probably not hearing several more; this complaint might actually solve a problem you've been overlooking.
• The complaint is addressing a very specific problem, relative to that member - Then deal with it and follow up with that member, who will be VERY appreciative of your time and attention. 
• There are sixty complaints, all dealing with the same problem - Odds are, unless you are a top ten credit union with billions and billions in assets, you won't have enough members for this level of feedback. But if you find yourself dealing with a mob scene on your blog, figure out where they're coming from - who's got a good point, who's just gloming on, who's a defender of the brand. 

I think that's the worst part of the decision to completely block out feedback - this idea that you're holding back a tidal wave of negative people saying negative things. We've run this blog for about three years now and we've never had seventy comments to moderate at once. We do moderate, one comment at a time, and we post the ones that meet all our guidelines. Haven't seen our guidelines page? Here it is. Go look at it. That's been here from day one. 

As for social media, we take our own medicine - we use Social Sentry. It tracks social media usage on your office network, public and private, and also tracks public posts from users outside of the office all the time. When I, as the admin, see social media use I don't think is fit for the network, I intervene. When I see an account I want to follow, I follow that account and I get their public feed. I don't spend a lot of time worrying because I stay on top of things. Better than being in the blind, right? 

Managing the expectations and the reactions of members is easy. Just be clear, be consciencious, and be fair. When a problem arises, solve it. But don't think ignoring comments or completely disallowing them will stop people from talking about you. 

Be in charge of your repuation.  

The Unengaged Member- Whose fault is it? The Credit Union or the Member?

Reactivation and growth from unengaged members seems to be one of the hottest topics in credit union marketing circles. Why?

Most credit unions just received their annual report on member profitability. Executive Teams and Boards are staring at a section that lists the percentage of their members that are considered "unengaged" by the profitability model. From the clients we've talked to, the percentage is staggering - ranging between 20% and 30% of total members. To put that in perspective, if you are a 50,000 member credit union, you’ve got 10,000 to 15,000 of those members unengaged! 

So now the bigger debate - whose fault is it that most credit unions have a significant number of unengaged members? The member’s or the Credit Union’s? 

I recently found out that a colleague had gotten his last car loan indirectly from a credit union through his car dealer because it offered the lowest rate. He took the credit union up on the offer and put $5 in an account to get the loan. After the loan was paid off he became the typical “unengaged” member. When I asked him why he didn’t do more with the CU he replied "I heard from the CU once or twice over the course of the four years when they sent me a paper newsletter. As far as I’m concerned, it’s their job to let me know what products and services they could offer and they didn’t do a very good job." 

Key take-away, don't assume members know your product set as well as you do and that they all use the same communication channel.

Want to get engaged?

A recent article on the Bank Marketing Strategy Blog "Collecting Behavioral Insights Increases Value of Relationship" states that best-in-class financial organizations supplement traditional new account opening with an onboarding process that includes a short survey of needs and behaviors of the new customer. While this survey can also measure customer satisfaction with the new account opening experience, most banks focus on gathering insights into the reason for opening the new account, communication channel preferred, the financial goals of the customer and what financial services the new  customer holds elsewhere.

In addition, some banks ask questions to determine key life events that may be on the horizon and determine who in the household will be in charge of managing the new account. 

Forget whose fault it is!

 If you believe the saying that "It is cheaper to get an existing member to do more with you than it is to find a new member", then marketing should be focusing heavily on the unengaged number in their reports.

As Jim Marous points out in the Bank Marketing Strategy article:

A deeper knowledge of the customer's financial goals, channel preferences, product usage, preferred channels and reason for coming to your institution is needed to personalize the onboarding communication and move the customer from product engagement to relationship entrenchment.

Think about it, an unengaged member could be viewed as a new member that may not even know about all the products and services available to them. The same on-boarding email engines and surveys used to educate new members could be turned towards unengaged members to learn more about their original reason for joining the credit union, gather current financial needs and to introduce them to the benefits provided by the CU. Click here to see some actual onboarding examples from one of our clients.

Bring us your Tired, Poor and Unengaged.

 Technology offers a fast, inexpensive way to reach your unengaged members. We’ve built an online survey to see what we can learn from unengaged members to help credit unions just like yours. If you’ve got the list of unengaged members and can supply ones that you have email addresses for, we’ll supply the online survey and email engine to try and reach out to them. We’ll survey you members and provide you with the feedback. It’s FREE for the first ten credit unions that take advantage of the offer. Simply go to our Onboarding page and click "Ask for more info". We'll contact the first ten credit unions that apply and get them started.

Want to share your re-engagement strategy? Let us know about it in the comment section.

Bringing a Knife to a Gun Fight - Why Cutting Marketing is a Bad Idea

by Ron Daly 

I'm sure you've heard the old adage "never bring a knife to a gun fight". Good advice - even though I've never been in a gun fight, I know I'll never be bringing a knife. Why? Because you're not only under-prepared, you're going up against someone with a huge advantage. 

I bring this up because of an article in the CU Journal by Paul Lucas, a branding consultant who's worked with a number of CUs and companies (including my own) on their branding. Based on a recent Bankrate article about what consumers shop for in a financial institution, Paul came up with some pretty interesting conclusions about the role branding and marketing play.

From Paul's article:

...17% of shoppers start looking for a new bank because of dissatisfaction with rates and fees, but only 4% of them choose their new bank because of rates and fees.

Why does that happen?

Because shoppers are swayed by brand image, advertising and bank branches in convenient locations. Perhaps this disconnect helps explain why more people are changing banks more often.

How did they choose which institutions to shop? The selection drivers lead me to believe that brand awareness is the key, and of course that's heavily driven by brand image. The big banks get strong awareness by buying it.

Paul also mentioned that BofA spent $2 Billion dollars on marketing in 2010. Two. Billion. Dollars. Spent by one bank. In one year.

What percentage of your budget goes into marketing? Paul makes a good point: 

The banking industry spends around 5% of income on marketing. If the credit union industry spent 5% using smart, targeted creative we could increase awareness, making us more competitive against banks.

Instead of spending more, however, many credit unions have cut the very things that sustain brand image: advertising, branch maintenance and member services staff. It's a downward spiral that left spinning long enough can take a credit union out of the game.

While CUs might have it where it counts (low fees, better rates, more specialized service), every inch of ground they gain gets thrown out the window when they don't pay to make it known.

Now for my two cents -- You really want the business? Time to start asking for it. Maybe the "gun" you bring to the fight isn't $2 Billion, but as any shooter will tell you, firepower's not the only important factor - having a better aim means a LOT. Time to really focus in on the member/potential member. What do they need? What do they want? What do they fear? 

One other important fact from Paul's article says the main reason people start shopping for a new FI is because of a shift in their life's circumstances. Maybe it's time you started wondering what those circumstances are...and how you can be there to help. 

I welcome your feedback in our comment section. 

 

 

Not Measuring Results -- Some Jaw-Dropping Insights into Credit Union Social Media

by Ron Daly 

Recently, to gauge our clients' level of interest in our new social media "getting started (or not)" course, we decided to send out a survey and see where our clients were (or weren't) with social media. 

The course that Jimmy Marks, our Creative Media Director, spent the summer building focuses on: 

1. Deciding whether or not to get into social media and the information you'll need to gather first
2. What it takes to make good content
3. Getting fans and followers that match your goals
4. Safeguarding yourself against compliance and security issues
5. Monitoring your results

...and we wanted to see how useful that advice would be to current clients who were interested in social networking. 

We sent out a simple survey. The results we got back were shocking. 

First, some table setting:

Average size of credit union surveyed: ~400 million

Average year-over-year share growth: 5.04%

Average number of members: 35,216

Now, the numbers worth noting:

• 63% of CUs surveyed are involved with and using social media in some form. 
• 54% of those are using Facebook, the winner by far. Second place was a tie between YouTube and LinkedIn
• Of the CUs that said they are using social media, 51% had been using social media for less than two years.

Interesting thusfar, but here's the number that made my jaw hit the floor: 

• Of the CUs surveyed, 76% DO NOT MEASURE THEIR SUCCESS OR THE RESULTS OF SOCIAL MEDIA AT THEIR CREDIT UNION. 

What??? 76%??? It's true, according to our results. 

Now, I'm not one to just hear numbers and completely ignore how they got there. As I looked at a later question, where we asked respondants what information they would want to hear in a social media workshop, many people said they needed measurements and better metrics. As a result, part of me wonders how much the lack of measurement has to do with not understanding what these CUs are measuring or how to measure it.

Some of the results were actually very helpful - many CUs are measuring their results in feedback and next-steps in the marketing/sales funnel, not just numbers of "likes" or followers. I worry, though, that much of the problem with social media is how people think it's a solution to something. If you don't have a clear message and a clear understanding of how people make buying and borrowing decisions, what difference could YouTube or Twitter possibly make? 

At DigitalMailer, we have lots of followers and friends and likes and so-on and so-on and so-on. But make no mistake, we don't call any of those "leads". Not until we've been contacted by that person via email or phone. It's great to promote the brand and talk about what you're up to, but that's not where our scope is focused. Twitter and Facebook help us keep in touch with partners, clients and some very interesting people - but pleasing clients and making products and services that save people money is the thing that keeps the lights on. 

In our workshop, we've got a lot of helpful information and some good actionable steps. More importantly, we encourage the kind of forethought it takes to talk yourself (or your superiors) OUT of doing social media if it's NOT the right way to spend your time, money, or creative energies. 

The workshop is $500 and includes a 90-minute presentation and a downloadable workbook. To sign up for our next session, click here. 

Taking the "Bank" out of "Banking": How the Steve Jobs Decade Has Changed Finance

by Ron Daly

Brett King over at Bank 2.0 posted an article titled "How Steve Jobs Killed the Branch". There's been a lot of talk recently about Steve Jobs stepping down as the CEO of Apple and moving into a more private role in the company. Tim Cook has taken Jobs' place as CEO and the black-turtlenecked dynamo has quietly stepped aside, due to his health concerns. The news of this change sent a shockwave through the Internet as Apple fans and tech fans alike shared their shock and their appreciation for a man that has many times over beaten the odds (go read about Steve Jobs' impact and listen to his 2005 commencement speech here. Very good stuff.)

Brett's article focuses on one important aspect of Jobs' legacy. From the post - 

This is not the sole legacy of Steve Jobs and the team at Apple, but when we look back on banking in 10-20 years time when branches have disappeared, we will attribute the destruction of the traditional value chain of banking to the death of the ‘store’. Not all stores are destroyed, of course, but where you have goods or services that can be easily digitized or where distribution does not absolutely require physicality, then the value chain is disrupted. The two big upsets in this evolution of the store were really Amazon’s destruction of the book store, and iTunes destruction of video and music stores.

I think Brett has a point there. The Kindle really did a number on bookstores and paper books alike (the Borders down the street from us is going, going...). The iPod destroyed all the Tower Records and Sam Goody's of the world because, finally, you didn't need a twenty-disc CD changer in your car - you just needed a little rectangle with a wheel. And why? 

Because paperbacks and hardcovers were just a means of distributing the words in a book. CDs and Casettes were just a way to store the music until it hit your ears. The medium wasn't more than the message. In some cases, it was much, MUCH less. 

As technology has advanced, our dependence on cash and checks has diminished. Debit and credit are pushing out cash and NFC is threatening cards - we'll keep making strides away from the physical aspects of money management until branches are almost obsolete. Why? Because money's not a physical thing anymore. At least, it doesn't have to be. And you don't need a bank to do all your banking.

When you can:

• Open an account online
• Deposit remotely online
• Apply for a loan AND get approved online
• Resolve NSFs and low-fund situations online
• Transfer money between accounts online 
• Budget online
• Buy online

...why go to a branch to get things done? 

Steve Jobs didn't exactly kill the branch. But he certainly didn't stop the bleeding. 

Truth or Dare: Do You REALLY Need a Social Media Expert?

by Jimmy Marks 

I saw a discussion group on LinkedIn - "Is there such a thing as a Social Media Expert?" 

It's an interesting question. With social media still such a young enterprise and with so many questions still in the minds of users and content creators, you have to wonder...is there really such a thing as a social media expert? 

What's sad is that in the short time "Social Media" has existed, we've already developed a stereotype of the "social media expert". It's usually a man, usually in a very expensive suit. His speech is very terse and he's VERY SERIOUS about how social media can help your credit union. 

Granted, he doesn't know what a credit union is, who you serve, how you're chartered, how you're capitalized, what your loan portfolio looks like, what your CAMEL rating is, how many employees you have, how much money you have...

He doesn't know anything about you or what you're doing. And he'll never care. Because by the time his check clears, he's moved on. It's like "The Music Man", only he's not coming back to win your heart and the heart of everyone in River City.

Why care matters

Am I a social media expert? That depends, I guess. I know how to set up and use the networks that most of you are using or considering using (Facebook, Twitter, LinkedIn, FourSquare, etc.). But I think that's about one-tenth of the equation. My biggest social success has come from one thing and one thing only, and that's caring. 

I was hired a few years ago by DigitalMailer to start a company blog for their website. In time, I slipped into the position of Creative Media Director. When I had to get the blog noticed and read by the right people, I simply emailed a long list of financial industry bloggers that I thought would be good contacts. I said, very simply, that I wanted them to read our blog and to feel free to comment on our posts. 

In time, those "thought leaders" became personal friends of mine. In time, I became a person they thought of when they thought of eStrategy. Now, with hundreds of contacts and relationships formed, I can say I'm helping to inform more people about what our company does than I would have if I'd just started without their help.

It didn't start with Twitter, it didn't start with Facebook. It started with me asking them for their guidance and their friendship. I cared about their opinion enough to seek it out. They cared enough about my actions to continue communicating with me. They're great people and, pretty soon, a few of them are going to change the way things are done in this industry. 

My point: audience is everything. And anyone who tells you otherwise is a liar. A big liar.

The biggest lie you've been told about being social

If I had to guess, I'd guess there's been at least one person who's gone out of his or her way to tell you all about how you're "doing it wrong." And sure, maybe you're not as accustomed to social networking as you are to other forms of marketing (by the way, yes, social media is a marketing enterprise. Marketing should be involved.).

The worst thing you can do for your social endeavors? Convincing yourself it's not worth the effort it takes to make it good. 

I can tell you that it takes FOREVER to build a following. I can tell you that not everyone's going to like you and not every kid in the playground will be your friend. I can tell you that a sales strategy is MUCH different than a strategy to gain followers.

I can get you started. But the level of care you bring to the table is what will make or break you. 

The "Truth" in Truth or Dare. 

Not to be one of those people that speaks in analogies, but here's a good one: getting started in social media is like making a cake. You need to know the ingredients, you need a little help with the mixing and the baking temperature, but the success of the "cake" is all in how much effort you put into it. 

You can get a store-bought cake and try to pass it off as home made, but over time someone's going to see through that. The same is true if you hire a "social media expert" to run your various social media accounts. Eventually, everyone's going to get tired of it. 

And yes, some people might not like your cake. Some people might love it and want another slice, and another, and another. Focus on that one person that likes it rather than the one that doesn't. A "social media expert" is most likely going to tell you that your efforts suck. Well, if you got into social media to impress social media experts, you might as well just get out of it, because you're not working to impress the people that matter. 

Some folks are going to tell you that baking a cake can stop up a leaky pipe in your basement. Those people are insane. The same with social media - if your infrastructure and your business model completely sucks, no amount of twittering or Foursquare promotions are going to save you. A cake doesn't solve a leaky pipe. Social media will never solve everything wrong with your business. 

The "Dare" in Truth or Dare.

With all that in mind, I'd like to talk to you about social media. I can show you the ropes, talk about ideas and strategies that I know to be successful, help you nail down the message and, if you're not ready, be honest with you about the things you need to get right before you get into social media. 

We've used social media to help us sell, to get the attention of new partners and clients and, most importantly (to me, anyway) to make us the envy of some of our stiffest competition. 

Can you do the same? That's not up to me. And if you come to one of my learning sessions, I don't guarantee you'll be a success. But I guarantee you'll understand more about what to do than you ever could alone. I guarantee you, you'll know what you want out of social media. 

With that said, here's a link to our sign-up page for a social media sit down. Get in touch with me and I'll be happy to slate some time for us to talk about what you're up to, what you want to do and what you're able to do. 

As a parting shot, I dare you to do one of four things with your social media endeavor of choice today: 

1) FOR FACEBOOK: Say something that's true of your credit union that the average user might not agree with - If you believe something, stick by that belief and throw it out there. What's one thing that you need/want to impress on your members? Don't be wussy and say something like "We believe that credit unions are great!". Say something bold and see what people shoot back with. Poke a bruise. Make a wave.

2) FOR TWITTER: Block or unfollow anyone who's following you that you can be sure is outside of your service area or is not a current member or potential member - How gutsy would THAT be? If you go through your followers list, you're likely to see a number of people who are not actually tweeting or are spam-tweeters. BLOCK THEM. If you see someone whose info lists them as a "social media expert" and they don't list a location within a few miles of your credit union, BLOCK THEM. If a major business is following you and it's not for any reason other than you mentioned them once, BLOCK THEM. Make your credit union account an account that just helps members. Set up a separate account for networking and use that to study what other CUs are doing. I can tell you for sure that more people contact @jimmymarks to talk about things and get a sales conversation started than those that contact @digitalmailer, and that's okay, because at least they associate me with the company. They're getting through somehow. And I've never been contacted by anyone who considers themselves a "guru" at social media. Because those guys typically have no money for what I'm selling. 

3) FOR LINKEDIN: Hire someone off of the recommendations they list on their profile - If good help is REALLY all that hard to find, at least start with people that have a little word-of-mouth behind them. You know there's someone you're dying to hire at your credit union. Make their LinkedIn account your crucial factor - slice anyone that would have been considered for the job that DOESN'T have a LinkedIn page. Who's that leave? Food for thought.

4)  FOR FOURSQUARE: Make a mad, mad, mad, mad world out of it - Give away something REALLY AWESOME and see who shows up at the branch. Let's say you're giving away a month's worth of gas. Let's say you're giving away an iPad. How about a wad of cash you would've wasted on a phonebook ad? Make it a crucial giveaway. Make a big stink of doing that. Then try the same with a Facebook check-in. Don't get shy. 

Go to DigitalMailer.com/socialmedia.html to learn more about DigitalMailer and social media - while you're there, sign up to be notified when our learning sessions begin and when our guidebooks become available. 

The Most Hated Companies in the Country - How Do Members Feel About You?

by Ron Daly 

The American Customer Satisfaction Index (ACSI) released their findings on which companies were the "most hated" last week. Most of the companies on the list aren't a big surprise - you've got your airlines (Delta's number two for super high baggage fees), you've got your big banks (JP Morgan and B of A), you've got satellite/cable companies (Cox, DISH). But there were  a few surprises. 

Coming in at nine and ten were MySpace and Facebook, respectively. Most of the complaints and dissatisfaction were based on privacy issues. I'm sure Groupon will be on next year's list, given their recent spate of bad press. How interesting that social networks are considered "companies". Sure, they have a corporate structure, but I'm always surprised to think of them as anything more than places for people to hang out - it's odd to think that they're actual corporations. It's stranger, still, to think that people are so worried about "privacy" - typically, whatever information you put on Facebook is whatever information Facebook shares with people. If they were showing people your private messages or selling your email address to spammers, that would be something else. 

But the biggest shock was who was numero uno. PEPCO - Potomac Electric, the power company that services the Washington, DC area. They're the most hated company in the country and they only serve one fiftieth of it. When asked about the rating, PEPCO had this to say: 

"We at Pepco know we have work to do and we're doing it every day," the company said in a statement. "For us to be distracted by this kind of sensationalism would be counterproductive."

Which is a nice way of saying "whatever". 

Which brings me to credit unions. When's the last time you asked your members exactly how they felt about you? Have you done a simple survey, something like a NetPromoter Score evaluation with instant "low feedback" alerts? Do you have a rolling feedback survey set up? DigitalMailer can help with all of these endeavors. It's corny, but it's true - you can't manage what you don't measure. How about your funded loan process, OR loans that were approved by you, but the member turned down your offer? That kind of feedback measurement is perfect for those of you wanting to be the member's primary financial institution!

Measure now with a survey so you can manage the changes you'll have to make to stay competitive.  

Click here to email us and we'll give you $100 off any of our survey services! 

What's Taking You So Long? A Sneak Preview "Build a Better Email"

Today, I read an article titled "20 Things Financial Institutions Should Do (But Don’t)". It's the kind of article that seems like it was written just for you. Specifically, because of this part: 

5. Email marketing

It's simply stunning how many financial institutions still don’t utilize email marketing tools. Even today, you still hear bankers say things like, “No, we don’t really collect people’s email addresses.”

It IS stunning. Especially given these statistics from Pew Research*:

• 94% of online adults use email
• 62% of online adults use email as part of a typical day
• Biggest online trend: “Certain key internet activities are becoming more uniformly popular across all ages.” This includes email.
• 38.5% of internet-supported mobile activity was on email among American mobile users
• 74% of online adults say email is preferred method of commercial communication.
• 63% of mobile email users check the account a minimum of once per day. 
• In 2010 30% of total email time was devoted to commercial emails, compared to 17% in 2005.

When are you going to get into email? More importantly, how are you going to be heard above the din? 

We're here to help with both of those questions. 

Recently,  DigitalMailer issued a whitepaper with helpful tips for email marketers. "Build a Better Email: Tips for Email Marketing Success" is free and available now over at DigitalMailer.com/Build. 

To give you a taste of the helpful hints in this free whitepaper, we've included a few of them here. Give them a read: 

#2 Divide your messages into numerous discreet programs

Rather than having a single all-or-nothing email list, create four or five sub-topics from which customers can select. Most users will select at least one, so you’ll have a way to reach most online consumers with service-related topics. As shown below, DigitalMailer clients offer up to ten different email topics to choose from.

#9  Don’t botch the FROM line

Although we see it less often now, the biggest email mistake is not including the financial institution’s name in the FROM line. It’s an absolute kiss of death for effectiveness, the equivalent of sending letters without postage. They just won’t get read.

#17 Think of mobile and tablets

How good does your email look on a Blackberry? How about on an iPhone? An iPad? Start looking into the display aspects of smaller, mobile screens. The Internet’s next evolution is, quite literally, in the palm of your hand.

#25 Explain why it was sent

Include a short statement as to why consumers are receiving the message, and how to opt-out or opt-in (for those receiving it from a forward). This typically works best in the footer of the email.

#30 Monitor message delivery

As the battle rages against spam, collateral damage to legitimate opt-in marketers is increasing. To make sure your messages get through, you should have two test accounts at each major ISP. One account set with filtering on, the other with filtering off. Even if your email vendor monitors delivery, we recommend test accounts as an added safeguard

Get the full list by downloading our FREE whitepaper! Click here!

 

*Editor's Note: The Pew Research Articles mentioned are:

 Pew Research Center, 9/2/10 – Cell Phones and American Adults 

“View From the Digital Inbox” 2011; data = primary research by Merkle and Pew 9/2/10

From Pew Research Center, 12/16/10 – Generations 2010