Looking to Capture Big Bank 'Refugees?' Here Are Some Keys

Did Bank Transfer Day foretell a lasting shift in customer loyalty away from big banks toward credit unions? Or was it just flash in the pan, one more viral meme that moved a bunch of people but not much money?

The question provokes spirited conversations, but we think it is the wrong question. No matter how many big-bank refugees find happiness at a credit union, their number is no indicator of value gained.

The better question for credit union CEOs would be: How can we make sure that when the big banks' troubles give us a chance to compete for new members, we have the weapons to compete effectively?

As Bank Transfer Day proved, it will take more than being small and friendly to attract people unhappy with big banks. Credit unions have to overcome a few intrinsic deficiencies (smaller network, sometimes lesser technology capabilities) by working cooperatively and being superior in other areas.

Sales & Service Skills

Refugees from big banks are often seeking the personal nature of doing business with a smaller institution that doesn't suppose it can "know" members by pulling up their demographic and account profiles. They expect to be known by their faces, names, and preferences.

Certainly they will appreciate that quality when they find it at their new credit union, but then what? Will your friendly employees just sign them up for the account they bring over from the big bank? Or will they know how to professionally assess the full scope of their financial needs and then either offer the right services or provide a warm hand-off to people in your organization who can? If not, there is a good chance that you will take on a customer whose relationship is ultimately unprofitable, and eventually lose a customer whose broader needs are not met. A lot of effort and expense for no gain.

Friendliness, Nice But...

Friendliness is intuitive, but friendliness doesn't make an employee capable of deftly assessing a new member, making the right offerings, answering the questions, handling the objections and closing the deal. That takes skill, coaching and practice. How will your people measure up to their big-bank counterparts on those skills? Will they know exactly how to describe the value of a credit union to people who only know banks?

Time Management

No matter how avidly your people look forward to welcoming waves of new members, rapid growth rachets up the workload to levels they may never have experienced before. Just adding the new members takes time, and adding them properly so that they will be both satisfied and profitable takes even more. The math says your people will be stretched for time.

But unless your institution is unusual, they operate in a culture of interruptions-unscheduled meetings, member visits/calls, emails, texts, visits from the boss, visits from employees-some of them necessary but most heedless and unhelpful interruptions.

To be successful in attracting, onboarding and serving more new members than they have ever done before, they need to learn how to make more time-we mean that literally. They need to learn processes that create "surplus" time for the time-starved:

• Time Locking to ensure that top priorities get undivided attention,

• Batch Processing to pump out similar tasks in efficient manner.

• Workday Planning to facilitate a new and unfamiliar discipline.

Instead of overstressed workers responding to the interruption of the moment, they can become organized professionals, certain of their priorities, confident in communicating them, and disciplined in executing them. It is the only way that the same number of people can take on more work and perform at the high levels demanded by an ambitious growth strategy.

Embedded Behavior

Even if you have rigorously trained your people in the right sales and service behaviors, what almost always happens after a while? Performance eventually trails off. Old behaviors return, because nobody had a plan to embed the newly trained behaviors. The failure to embed means money got spent, people got trained, time got used, and now there's nothing to show for it except cynicism about training.

In ordinary times, this waste is costly, but today, when you need to dive into this rare opportunity to grow organically, it is intolerable.

The Perfect Hour

What your overworked frontline managers need are tools for embedding those behaviors. One example might be a "perfect hour." If onboarding new members is a challenge, you might strive for "the perfect onboarding experience". After all, when new members bring you new accounts, the onboarding session might be the last time you see them in person, and it is certainly your best opportunity to identify their cross-sell needs.

That is just one embedding tool, but there are as many tools as there are embedding deficiencies, so it is critical to choose the right one for embedding the particular behaviors that will allow your credit union to prosper in this environment.

Where To Find Inspiration

If your troops need inspiration, remind them that their opportunity and competitiveness are even greater today than they were on Bank Transfer Day. The big banks remain the target of ongoing and, some would say, heavy-handed and punitive legislation and regulation. For a long time to come, large banks will be spending a lot of attention and money on new compliance and on pushing back against what they perceive as unfair rules. Translation: distracted from customer service and getting negative press.

Big banks are also having to face up to infrastructure shortcomings-archaic, mainframe, siloed systems, more patched than integrated and increasingly hard to adapt for new technology-based offerings. No matter how much they may want to delay big IT expenditures and focus their IT dollars on product innovation for competitive purposes, they cannot. Translation: unable to widen the technology lead over credit unions, which are steadily improving their own technology underpinnings.

A Rare Opportunity

Big banks are losing high-quality bankers. Mass layoffs do not intentionally deplete the ranks of the best bankers, but the specter of layoffs causes the best performers to seek opportunities elsewhere. It is hard to deliver great customer service when there is high turnover among the best relationship managers and service providers. Translation: widening the customer service gap in favor of smaller institutions and credit unions.

So, yes, these large bank difficulties do translate to a rare opportunity for credit unions to compete for new members at a time when big bank customers are more or less in play.

James Bywater is SVP and managing director of global consulting solutions at Los Angeles-based Cohen Brown Management Group Inc. He can be reached at james_bywater@cbmg.com.