Suze Orman gets into the prepaid card game -- and out of the good graces of the CU Industry?

by Ron Daly 

 Remember a while back when Suze Orman went to bat for the NCUA as an "educator"? She wanted to get the word out about how NCUA served the same function for CUs as the FDIC did for banks. A noble goal, and helpful for those who are confused about what all those letters mean on the bottoms of loan promos and direct mail pieces. It raised the question, "Is Suze Orman the right spokesperson for CUs?" 

Well, it's a false dilemma, really. See, Suze Orman wasn't hired to promote CREDIT UNIONS, she was hired to promote NCUA and their capacity as the insurer of cu deposits. But people read "Suze Orman" and "NCUA" and interpreted that as "Credit Union Spokeswoman".

Which is unfortunate, because Suze Orman just decided to set herself up as a prepaid card magnate. Click here to read about it on US News and World Report's website.

I really don't know how to make heads or tails of this. Sure, Suze Orman has a lot of brand equity, specifically with the "underbanked", but to lend that equity to a prepaid card? She's taken the road the Kardashian sisters weren't able to walk a little over a year ago; the only difference being that Orman actually seems to understand how money works and the Kardashians...well, the less said, the better.

An Associated Press story claims that the aim of the card - which Orman has (reportedly) already pumped $1 million of her own money into in development costs -  is to boost the credit scores of users through a deal with TransUnion. This new breed of credit score would reward users who previously paid for things with cash or other prepaid cards, but Business Insider doesn't seem to think so.

According to the PR Newswire press release, the card comes with "Suze Orman's advice and tips on personal finance," (which are delivered...how?) and is also "insured up to $250,000. The Bancorp Bank; Member FDIC". So, there's a bank involved somewhere along the line, but a few steps removed...

I guess the question is, has this move soured your opinion of Suze? Some of the choice tweets on the topic I read over yesterday and today: 

Yes, much has been made of the $3 monthly fee, which is actually low compared to cards like the Kardashian Kard. But a card that preaches better finance management while taking out $3/month to "cover costs"? Would "Pre-Card Suze Orman" approve of that? 

Ron Shevlin from the Aite Group always has great links and thoughtful reads on the topics of the day, and he found one by Ron Lieber in the Times. In it, Orman swears she won't be making much money on the card and certainly doesn't want to be making money off of the "99 percent's backs" (her words). She insists that if the rates increase dramatically, she'll kill off the product. But surely there's some reward for her, considering how much she's already invested...what is it?

This reaction is one of the more damning, in my opinion. Ondine Irving has worked with Suze Orman in the past to get the word out about credit union credit card programs and has been a pretty big Suze Orman "stumper". She's not happy with these new developments. I sense she won't be the only one. 

I'm eager to hear your comments on this in the comment section. 

 

The Pony Express Returns! -or- Why Electronic Delivery Makes More Sense Than Ever

by Ron Daly 

Nostalgia is bringing back some interesting things nowadays. The Smurfs are in my DVD player (my daughter's choice, not mine), the Muppets are back in theaters, and I could swear I've seen the New Kids on the Block on TV recently. Everything old is new again. 

Which is why the post office is returning to delivering mail via pony. Yes, the USPS has invested what's left of its money in the purchase and upkeep of a fleet of ponies to deliver the mail that keeps our country moving. Yes, it will take longer to get your mail. Yes, rates are going to increase. But hey, at least you get to pet a pony once in a while? 

...Huh. Wait a second. I think I have my facts wrong. Service on first-class mail is going to slow down, and postage is going up, but...no ponies? No, the USPS is just gumming up the works as a cost-saving measure. According to the video below, they lost $4 billion in the last year, they've got to stem the loss of funds somehow.

[Can't access the video? Click here to watch it on the Today show site.]

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

I guess we've played a part in their trouble...in the past ten years, we've delivered more than 27 million eStatements for financial institutions across the country.  

Is the American postal system dead? No, it still has its place. And it's pretty impressive that you can send a letter from anywhere to anywhere else in the U.S. for 45 cents. But as any project manager, CEO or business pro can tell you, the three choices are "good, fast, cheap", and you can only pick two. You want it good and cheap? You can't get it fast. You want it good and fast? You can't have it cheap. You want it fast and cheap? You can forget about quality. You just can't have it all.

...or can you?

For month-to-month statements and daily notices, encouraging members to switch to e-delivery means you can hold all three corners of the triangle at once. Think about it:

• Good - eStatements and notices can be presented in a way that's identical to printed statements and notices. You don't sacrifice the "look" or readability and the e-docs are compliant with all regs (ours are, anyway). 
• Fast - electronic documents are processed on your schedule and are available whenever members want them. Just send them an email and they can log in to a secure host that shows them an archive of docs that they can print out for themselves (if they want), or just keep online to reduce clutter. 
• Cheap - Printed, mailed documents cost a minumum $.44  .45 cents - you're already saving  that much per user, and that's not even counting what you save in printing and paper costs. With the right company and the right e-documents model (ahem), the MORE e-document users you have, the LESS you pay per statement/notice. What's not to love?

We've been saying it for years and, by George, we keep getting it right; the Post Office's business model can't sustain cheap, speedy, quality delivery. They don't have a war chest to help with the cost - they have to charge more. But e-documents? They've been the same price for a good long while now and they keep providing the same benefits. It's easy to get more members using eStatements - the hard part is not kicking yourself when you see what a HUGE difference it can make on your bottom line!

The truth is, there are very few - if any - documents that used to go in the mail that can't be sent and stored online. Need to get more electronic document users at your business? Click here to get in touch with me. Just ask for Ron! 

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. 

Are you Delivering Financial Telephone Books and Newspapers?

by Ron Daly

Some things just never change, but should. Two examples.

My family and I returned home this week from our west coast vacation. As we turned into the driveway my daughter spotted a large plastic package with items inside leaning on the mailbox. Being nine, she naturally assumes that every package delivered to the house is something for her. As I exited the car I saw her struggling to carry the package with two large yellow books and one large white book inside. Dropping the 1,000 page books at my feet she asked “Dad, what are these?”

To which I replied, "Those are telephone books, sometimes referred to as 'yellow pages'."

If you have a nine-year-old you know there are even more questions to follow...I believe it went something along these lines.

Q: What are they used for?

A: People use them to look up up the telephone number of someone they want to call or a businesses they might want to hire.

Q: You mean they don’t Google them, look them up in their Outlook contacts or call 411?

A: Guess there are still some folks out there that need them.

Q: Did you pay for these books or ask for them?

A: No, dear.

Looking down the street at all the bags of books lining the driveways as far as the eye could see–

Q: Why did they print all these books, waste all this paper and leave them on everyone’s driveway if no one pays for them or uses them?

A: Guess it’s a conspiracy.

Thumbing through the A-L Yellow Pages she stopped in the “D” section

Q: Dad, why isn’t DigitalMailer listed in the Yellow pages?

A: Well, we are a digital communication company and it doesn’t make sense to spend money this way. Besides, any person that has to use the yellow pages to find us is probably not ready for the products and services we offer.

Q: What good is this ad on this page? It’s in black on yellow paper. There are no moving images and nothing interesting about it. I can’t click the website address to learn more and I can’t hit the phone number and have my cell phone dial the call for me.

A: Not everything keeps up with the changes going on. This is just an old-fashioned way people use to find information.

Her final comment as she walked the books directly over to our recycling bin and dropped them in… "What a waste of good trees."

One more example to share, from a conversation we had with a lovely lady I’ll refer to as “Marge” at the large national newspaper in our area. We decided rather than to stop the Sunday paper while we were gone, we’d just cancel it altogether. After waiting in the call queue for a while Marge was lucky enough to get our call. Here goes:

Ron – We’d like to cancel our Sunday paper subscription.

Marge – Why?

Ron – We get our news from other sources, we never read it and we wind up just recycling it each week.

Marge – What if we give you weekdays free?

Ron – (Thinking to myself – OK Marge, I don’t read Sunday and now you want to give me six more days not to read and recycle?) No thanks, we just want to save the $15 per month by cutting out something we don’t need.

Marge – You know, if you use just three coupons per week from the Sunday coupon section the paper will pay for itself with the money you save.

Ron – (Thinking to myself – Ok Marge, I’m not a “35-cents-off-of-ground-round-cut-that-coupon-out” kinda guy, but I do like that song. Besides that, my yellow and white flowered coupon organizer was retired about two weeks prior to my marriage, never to be resurrected again.) No thanks, we can get coupons and discount codes online for most of the stuff we need.

Marge – What if we just charge you 59 cents each week of the Sunday paper? Will you stay?

Ron – (Now I’m starting to boil realizing that I’ve been paying $15 per month for at least ten years for something that Marge is now selling to me for just over $2.40 per month) No thanks, just cancel the subscription.

I can remember which one of us hung up on the other, but the paper has stopped showing up.

Some things just never change, but should. So, my question is… Are you still delivering financial telephone books and newspapers? Are you relying on old systems and technology to reach customers faster and in the communication channel they want? Have you looked at the organization to make sure that you are not? Do you have any idea where financial services are going on the web and in the branches? Is your Virtual Branch even open?

We’ve launched an eStrategy presentation on the future of financial services that is perfect for senior management and Boards of Directors. Contact me at rdaly@digitalmailer.com for more information.

Domino Effect: Are You Helping the Member Understand?

by Ron Daly 

Sometimes the best way to get a result is to give a system a little push. You have to pull the choke to get the lawnmower to start. You give your kid a gentle push on their bike so they can start pedaling on their own. And sometimes, to get members to take action, you have to tell them what's at stake. 

We've talked about Interchange before. The debate is raging on, but that hasn't slowed down the legislation or the outcry on both sides of the wall. Retailers want fewer swipe fees and finance folks all know that we'll be killing free services if we lose Interchange income. The Electronic Payments Coalition has another commercial out about "the domino effect": 

 

Bill Cheney at CUNA said that over a quarter of a million members have written in to change the rule, according to this NPR article. An article from the CU Journal says the Fed is working on a compromise that will try to please both sides...word's out on whether or not it will, seeing as the cap will still go into effect. It's going to be tough for people to suss out why this all matters, because both groups say they're acting in the best interest of the consumer. 

This is a perfect example of how a national campaign for credit unions would work. A large body (or bodies) would put out the word about CUs and...what? Everyone would know what to do? Examine the video above; what does it ask of the viewer? Do they know who to contact? Who are the champions of "not changing Interchange" in Congress? 

It's time you gave your system a little push. 

Your homework is to think up ten (10) ways to educate YOUR members about Interchange. How are you going to do it? Can you rope in a Senator or Representative to come talk to your members? How about a letter to members? How about a video from your CEO asking members to talk to Congress? Localizing and personalizing a problem makes it stand out more. How are you going to tell your members "if you don't act on our behalf, this is going to hurt"?

Tell us about it in the comments section.

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

Ron's Crystal Ball Says Knowing and Understanding the Member Will Make the Difference

by Ron Daly 

There have been plenty of 2011 predictions made in the first week of this shiny new year. We sifted through and found some of the more outstanding predictions made and thought we'd share them with you, our faithful soapboxers. 

From Transaction Directory: 

Mobile banking applications experienced a lot of media attention and some traction in 2010. 2011 will see more roll out of solutions by major banks; however it’s utilization will still be limited to the “early adopter” consumers. The real traction for mobile bank- ing will occur in the B2B world where notifications/alerts and approval requests kind of functionality will begin to resonate in the market. 

Also: 

The USPS will continue to struggle and lose billions of dollars. It is likely that postage costs will go up and services will be cut resulting in slower mail delivery times. In addition, bill recipients are becoming more demanding about where they want their bills delivered. On the B2C side, bill portals like Doxo, Manilla, and Zumbox will gain some traction with consumers. On the B2B side, Accounts Payable hubs like OB10 and Ariba will continue with their momentum of consolidating inbound invoices.

We saw a few of these coming - particularly, the bit about the postal service. Not to beat up on the post office, but so little of what people get via mail needs to be received that way. Online bill pay, email and text alerts, and email marketing can be done with less money and to greater effect. Mail still has a place and probably always will - but we've had our eye on the issues facing the postal service and the future seems dim. 

A heartbeat that we hear pretty clearly under all of the predictions we've read? A greater need to understand the member and meet them more than halfway. From the eMarketing and Commerce Blog: 

2. Goodbye to "pay and pray" advertising. The physical advertising world is about to be disrupted in a way not seen since the advent of the internet. Brands will begin to reject unaccountable "pay and pray" advertising in favor of precisely targeted, specifically timed trackable messages.

3. Nice to know you. Standing out is about delivering the right message to the right person at the right time. Marketers that create millions of micro-campaigns to make their message useful to consumers — i.e., hone their messages based on data — will reap results.

I couldn't agree more. Show a member that you know them, that you get what matters to them, that you want to do things solely for them. You might brush off the idea that members want "special treatment". Do so at your own risk. 

Let's talk about the article by Brett King on the Huffington Post, "The Finance Sector Gets a Start-Up Overhaul in 2011". There's a lot of gold in this article but the main thing to focus on is the diagram of technology versus behavior versus infrastructure change. 

The thing that makes 2011 so interesting, according to King, is the bevy of startups that want to shake up the way members interact with their credit union. What stands in the way of each of these new companies' success is the distance between the adoption of these new technologies by both the institution and the consumer. The invention of the "app" as we know it has really shifted our concept of ease of use and accessibility. The Internet changed things by proving you could buy, sell, transfer and transact sight unseen. The iPhone proved you could drive the interaction further into the personal sphere by bringing the ease of the Internet to the cellular phone. Does anyone who knows this expect there to be a "reverse exodus" back to face-to-face, in-branch transactions? 

The last bit of the article says it all, in my opinion: 

...The biggest risk to the finance sector today is the growing gap between the institution and the customer. The rate at which this gap is opening up is increasing rapidly, as the adoption of newer technology increases too. This is where we are going to see an explosion of start-ups and new businesses who aren't afraid to reinvent the bank customer experience. This is where the banks who do get customer and try to reinvent the journeys customers are taking will win.

It's also where banks who wait for ROI, or wait to understand the impact of social media, mobile, near-field contactless payments and other such technologies before investing, will lose out massively.

The moral? The idea of "bleeding edge" might make you queasy, but it can't make you feel any more sick than the idea of losing business because you won't bring better, smarter services to members. 

All the articles we mentioned are worth a read. We'd love to hear YOUR predictions for 2011. Which horse is worth a bet and which one won't leave the starting gate? Tell us about it in the comments. 

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Just FYI: DigitalMailer can do email and text alerts, targeted "triggered" emails, electronic statements and online documents. And we've been doing those things for about ten years now. Click here to go to our website and learn more.

Should we start charging for face-to-face transactions?

by Ron Daly 

Let's shift our focus to online banking transactions versus face-to-face transactions. Read this article from NetBanker. Jim Bruene, the author, raises the question of how much more a transaction costs to make in person as opposed to online - not just for the consumer, but rather for the institution. Then start looking at the numbers for your own credit union. If you need to have a manager do a transfer or a wire for you and the transaction takes thirty minutes, how much of their cost are you burning up on one member?  Should you be charging more for your branch interactions? Why or why not? 

Do credit unions even know what it costs to do a transaction in each one of your channels? From the CU Journal article "Talk is Cheap...In Theory":

Financial institutions pay an average of 85 cents per ATM transaction, and audio response, call center and branch transactions cost $1.25, $3.75 and $4.00 respectively, said the report...

In contrast, Internet banking at Pacific Marine costs 13 cents per transaction, Smith continued. The caveat: the Internet banking system can't accurately count account balance and history transactions because a member may simply log-in and glance at balances and history.

ING has made a successful business out of charging for face-to-face and even "firing" customers that use face-to-face too much. 

I can see the argument from both sides. Charging more for the services members use offline and by phone can be off-putting. Sharp-eyed, lifetime members will spot the price difference and, depending on the price jump, give you an earful. And maybe you want to paint a picture of consistency - the same service, no matter what kind of member you're helping. 

But then, there's a little thing called overhead. A branch needs a few dollars to run - heck, keeping the lights turned on is tough enough. You've got to make that money somewhere when it's not coming from overdraft income anymore. Why not charge for "labor"? Yes, a member can apply for loans and open different accounts online, but are they getting the right product for their needs? A website can walk them through only so far - a member service specialist or loan officer can do so much more. But isn't a personal consultation worth more anyway? So why not charge for it?

I'm guessing that you, our loyal readers, will be in one of two camps on this one. What say you? 

Tell us how you feel about charging more for in-branch transactions in the comment section.

 

It's a Credit Union Love Connection!

by Ron Daly 

HE'S a niche credit union created to serve the workers of a local cannery in the 1930s! SHE'S a live-work-worship with multiple branches but diminishing deposits! Do I smell romance? NCUA does. 

From CUNA News Now: 

WASHINGTON (9/9/10)—The National Credit Union Administration (NCUA) said credit unions can expect a national merger registry "to be live by October." The registry, an idea initally recommended by the Credit Union National Association. would provide the names of potential credit union merger partners.

The registry is just one innovation sought by the Credit Union National Association (CUNA) regarding the regulators' approach to voluntary mergers. The trade group has also urged the agency to address due diligence and loss-sharing incentives as it further refines its approach to the merger process.

So the NCUA is launching what is effectively the Match.com of the industry. Recently, Dennis Dollar predicted another 2,500 mergers in the industry by 2015. Callahan and Associates data shows a contraction of 248 CUs between 2Q of 2009 and now, and the number is still slipping. 

Is all this contraction a bad thing? Not necessarily. Typically, mergers mean the death of autonomy for the smaller CU in the deal, but no merger takes place without an eye to growth for both institutions and better services for their shared members. The intentions are good, even if the resulting shift makes things a little rocky for management, staff, and members at first. 

I think it's forward thinking of the NCUA to try and facilitate good matches, whatever the means. Pairing CUs with similar goals and good books means the two joined CUs can focus their energies on gaining members and growing. Encouraging search and promoting solid due diligence are the NCUA's responsibility, and they recognize that. I've yet to see this merger registry, but I'm very interested in the concept. 

Which begs the question: how do YOU feel about the registry and mergers in general? Will fewer credit unions with more to offer be better or worse in the long run? Talk to us about it in the comments 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?"