What’s the Difference!

That’s right. Time shares.

My husband and I just got back from a “free” vacation to Las Vegas from a time share company. They paid for our hotel and gave us free show tickets in exchange for 90 minutes of our time.

You all know the deal. The plotting and planning with your significant other to ensure neither of you gives in to temptation and actually buys. Why do we need to conspire like that?

Because vacation ownership is a $10 billion a year industry. According to AIF, the U.S. had 1,604 time share resorts, with 154,439 units, in 2006 – and 4.4 million owners.

Our genuinely likeable saleswoman explained to me that one in four people who attend the seminar buy a time share. How does that happen? How does this industry manage to convert millions of stubborn Americans into shelling out thousands of their hard-earned dollars? During the spiel I couldn’t help but notice similarities between time shares and credit unions.

1. Ownership. Time shares sell “vacation ownership.” They show you the various vacation options (hotel, vacation home, time share) and compare the pros and cons. For them, ownership sells. They have supporting information and examples that make this claim extremely relevant to consumers.

   What can we do to make credit union ownership an equally desirable selling point? How is ownership an irresistible benefit?

2. Savings. Directly tied to “ownership,” a simple calculation showing how much money you will spend on vacations in your lifetime gives a startling number.

   What savings calculations can we show potential members to help them visualize the benefit? Lower interest rates on home loans or more money going toward principal instead of interest on a credit card payment? Long-term relevance makes long-term members.

3. Freedom. Time shares provide all the benefits of owning property without being tied to one vacation home.

   Credit unions offer financial freedom and independence. The destination is different, but the emotional response is the same. Financial freedom has unlimited benefits for the consumer. How can this be explained in a way that relates back to the individual consumer?

4. Collaboration. To make the vacation experience convenient and easy to use, time share organizations around the world work together to create points or other tradable plans between companies and resorts. This lets owners visit thousands of destinations without being tied down to a home resort.

   In the eyes of the consumer, this network is similar to shared branching.

The Las Vegas salespeople had tools to show anyone how they can benefit from a time share. What could credit union staffers use to help them personalize every conversation? These tools can help convert potentials to current members or inspire current members to make you their primary financial institution. Does anyone have a good example of how their credit union is using this kind of tool?

Bad times creating marketing cuts? Not so fast!

The economy sucks. Organizations around the nation are saying “it’s time to cut our losses and save our marketing bucks until ‘le bon temps roule.’”

When the good times aren’t rolling, it’s time to defend our financials! Who would possibly argue with that? Credit union marketers should.

When it comes to marketing in a recession, it’s time for a new approach. Evidence from Marketing Management Analytics and Advertising Age shows that, during the 2001 recession, many major brands reduced the impact of negative revenue and market share by maintaining or increasing their marketing efforts. If you “go dark” with your advertising, your sales will start to erode in three or four months.

It’s true that bad times, or even increased competition, mean your marketing efforts probably won’t increase member acquisition or product sales.

So, why bother defending your marketing budget?

Because it will diminish your losses. And some research shows that increased marketing in tough times can help increase your market share when business is good again.

So think risk reduction. Marketing will cover your assets until the good times roll.

“Throw me a Kleenex, please,” I said to Melina, blushing, holding my right hand in front of my nose to hide a tiny drip of snot, pointing to the box of tissues with my left hand. She knew that I meant I needed one of her Puffs tissues, but I didn’t say Puffs. I said, “Kleenex.”

Imagine a world where consumers said, “I’m going to my credit union” when they were actually driving to their bank, or making payments online was called “online credit unioning.”

“Credit union” - what a name. Where did it come from and how can we turn it into Kleenex?

Well, thank Ed Filene and maybe Pierre Jay for coining the term “credit union.” They’re the old skool boys of financial social justice, though it was a fan-freakin-tastic name. (BTW, while researching this I learned words are not the smallest meaningful language units, morphemes are.)

Morphemes make up words and words make up our lexicon. The lexicon is a mental dictionary that stores our word knowledge. Hopefully, you understood what I meant earlier by “fan-freakin-tastic” because you’d heard the word fragments in context of your lexicon. Apparently, a word is a unit of language that by itself has no meaning without the context of our lexicon.

Whew. This is important because it relates to the lexicon of Edward Filene.

Yes, around 1908, Filene had the revolutionary idea to bring one of the first financial cooperatives to the United States to serve the employees of Filene’s Department Store. But he was also the first U.S employer to adopt a company union and support staff in collective bargaining. Filene realized that credit unions could help ordinary American workers gain access to loans they need without falling victim to usury. Equally important, workers could save their money so they were prepared when hard times hit.

His concern with fighting moneylenders and excessively costly consumer loans led to the choice of the word “credit.” And because Filene was a pioneer for workers rights, he coined the name for American financial cooperatives in relation to the “unions.”

Wow, Filene was fighting the good fight against the payday lenders of his time! How cool is that??!

Apparently, he was a darn good businessman and an amazing philosopher. It seems that some of his philosophies are more appropriate today than ever before.

“If people think they can survive best by getting ahead of one another, I shall expect them to go on trying, as a general rule, to get ahead of one another. When they come to see, however, that their best chance of survival is through getting ahead with one another, they will inaugurate co-operation.”

Five or 10 years ago, I was a huge critic of the name credit union. More recently, after my client Demaris Krummel urged me to read Filene’s book Speaking of Change, I realized the relevance of the name not just when it was coined during a very oppressive time for American workers, but today.

Unions, like credit unions, have changed very much since the 1930s. And perhaps both could regain inspiration for the empowerment and the opportunity they created at that time. But the time is now when working Americans need their services, advocacy and social justice more than ever.

Think about it.

Hardworking people across the Unites States are faced with the challenges of buying fuel for transportation to work, feeding their families and making their home payments, all while credit card interest rates and bank fees are constantly inclining. For example, Bank of America and Washington Mutual have jacked up their overdraft fees and made it easier for customers to be hit with multiple penalties.

So maybe it’s better that “credit union” isn’t thrown around like the word Kleenex, because the etymology of our name has a rich history of social justice. That history is relevant today more than ever before. It’s enough to inspire the leaders of both credit unions and unions to think about why they were founded and what they can do for hardworking people today.

I’m on my third iPhone. It’s a great product and I love it. (Sometimes I even sleep with it.) Even better than my romance with the product is Apple’s “in it for the long-haul” commitment to the relationship. My second and third iPhone were free. They were on-site, instant replacements.

The Apple customer service experience was great because:

1. Apple Geniuses listened to me.
2. They fixed the problem.
3. When it couldn’t be repaired on-site, they provided a replacement and sent the old phone to be studied for product improvements.

Surprisingly, my point isn’t about the extreme customer service. I’m just getting your attention with the “two iPhones free” shtick. The big idea is in Apple’s amazing reception to customer feedback:

1. Listen
2. Act
3. Research to improve product

What strikes me about this experience is how often we let consumer feedback wash over us without acting on it. And it hit me hard twice:

Virgin Atlantic Airlines
The shiny white counters with exotic red flowers and rock-n-roll videos playing at Virgin Atlantic Airllines drew me in. I daydreamed about the voluptuously hip cabin, imagining myself flying in sophisticated luxury unknown to our generation. I knew right then I wanted my next trip to be on Virgin. That dream came to a screeching halt when the Seattle gate agent spoke to me without listening.

In Seattle, the home of Boeing, “Airbus” is a dirty word. When a consumer approaches your shiny new airline at SeaTac it’s best not to tout, “We only fly Airbus and that’s what makes us so special.” My eyes widened and I asked with hedging kindness, “You do realize that most people you talk to here at SeaTac have a friend or relative that has worked for Boeing?” He said, “It doesn’t matter to us. Our CEO is from Europe.”

I wonder if it matters to consumers in Seattle who’ve had a friend or relative laid-off at Boeing? I was surprised by his response. I was trying to be kind and provide insight. Did his marketing department give him these talking points to convince Seattleites to fly Virgin? I walked away bummed, realizing he wasn’t going to share my feedback with anyone.

Stinks of Gas
A friend of mine is one of the most talented chefs in Washington state. His family opened a restaurant to rave reviews. They were proud. No one can say for sure, but perhaps that pride prevented them from acting on customer comments that the restaurant smelled like gas. They did not look into it. Several wealthy patrons did not like dining there regularly due to the smell. A year later when the family needed investors to stay afloat, they finally listened to one of the wealthy customers. The chef lifted the hood of the industrial stove and realized in disbelief that one of the pilot lights was out. Gas had been freely flowing into the dining room for months. The smell was a constant to the family, like wearing cologne. If they would’ve listened to their customers and acted on the complaint, would the business have been more successful? Sadly, we will never know. It is now closed.

What are your members telling you?
I’m not asking about your big, annual member service report. What did your members say to your tellers today? Listening is the best research and is necessary - even when you have the hottest product.

I can hear my credit union marketing friends now, “But I’m in marketing - that’s not my job. The tellers deal with members.” Who deals with the research?

A few days ago, while eating Chinese takeout at Jamie’s house and speaking philosophically about credit unions, I remembered one of the most profound concepts I have ever heard. It came from Dr. Neill, one of my professors at the University of Washington, Tacoma. I’ll never forget the point he made when we were discussing the importance of effective mission statements.

Dr. Neill asked us to think about a company in the early 1900s that sold buggy whips. If this company’s leaders could glimpse into the future, they would see the dwindling need for buggy whips and they’d potentially change their products.

Unfortunately, most people are too focused on what they sell. In the example above, the management or board of directors for the company would likely say, “We sell the best buggy whips this side of the Mississippi. We have no reason to modify our products.” Even if they tried to improve their buggy whips, the problem is that this service is no longer needed. They need to get into an entirely new field, which is difficult if not impossible.

What is wrong with their thinking? It is too specific. The organization believes “we sell buggy whips” when in reality, the benefit it provides consumers is not a buggy whip, but the ability to make things go. The consumer doesn’t care what you provide them specifically. They want the ability to get from one place to another in the most effective, efficient and safe way.

Another example is to look at a company that sells drills. Instead of saying “we sell drills,” the company should look deeper and see that it actually sell holes. If there is a better way to make a hole – or to put two pieces of wood together – the consumer will find it and your drill company will be out of business.

It’s easy to get stuck in this trap when you have a mission or vision statement that is too focused. How can a credit union learn from these lessons? What are we really providing the consumer? Is it “low-interest loans” or is it the ability to hold onto more of their hard-earned money? Is it “membership and ownership to the credit union” or a sense of security? What do you think?

In the National Association of Federal Credit Union’s “TFCU Online” article author Kate Arcieri talks in great detail about credit union blogging best practices.

As a communications consultant and one of the people posting to The Credit Union Difference blog, I have been trying to estimate the value of a blog visitor and a blog commenter.

Advertising people use “cost per thousand” as the value of an ad: the cost of the ad divided by 1,000 readers, viewers or listeners.

Public relations people struggle with the value of a positive “earned media” story placement. Some use an ad equivalency value, in other words, what we would have paid for the equivalent time or space.

Others claim the editorial credibility of having the publication write about your organization makes the placement worth two or three times more than a paid ad. We can usually figure out how many people read, watched or heard the ad, so the “per thousand” part of the equation is easy.

One of our clients asked what a blog post or comment is worth. Hmm… Is it worth more than a paid ad? Most would say yes. Is it worth more than a news story, and if so, how much more? Maybe together we can agree on a value. What would you say?

When Mountain America Credit Union launched the Women’s Financial Services Network (WFSN) a few years ago, it was eager to make a difference. And it has. In fact, it’s making a difference in the lives of many women, specifically young women.

In a unique partnership with the Girl Scouts of Utah (GSU) and the Salt Lake Chapter of the National Association of Women Business Owners (NAWBO), the WFSN is providing one-on-one mentors for Girl Scouts going for their Gold Award.

The mentoring program was launched last fall and has already helped 12 local Girl Scouts attain the exclusive Gold Award. This is a process that culminates in a major project involving 65 hours of community service. It’s the highest award possible in Girl Scouting. And it’s definitely a challenging endeavor for the 14-18 year old girls. (Only three to five percent of eligible Girl Scouts earn the award nationally.)

The young ladies who take on the Gold Award are much more than cookies and uniforms, they are dedicated hard workers looking to build a better future. The Gold Award is recognized across the country as a channel for young women to turn their passions into commitments to leadership and service in their communities. When I interviewed our senior vice president of WFSN, Annette Zimmerman, she told me just how cool these young women are, “I’m inspired by the girls and their projects. The girls who have earned their Gold Award are so far ahead of most girls their age. They have already identified their core values and they have goals outlined for their own success and improvement of their communities and beyond. I am so impressed with their courage and determination.”

Breck Schueller is equally impressed. She’s a branch manager at Mountain America Credit Union and a mentor. When I asked for her thoughts on the mentor program she said, “It’s amazing to see what can happen when communities and businesses partner to mentor our young people, our next generation of leaders.” Her Girl Scout is working on a project aimed to help cancer patients who have lost their hair. Breck just helped promote her project at a local Chamber of Commerce Women in Business Conference. The theme was “Hats Off” and each attendee was invited to wear a hat and bring one to donate to her Gold Award project. She collected four big boxes of hats!

I completely agree with Annette and Breck, amazing things can happen when we work together to make a difference in the lives of young people. The Women’s Financial Services Network’s exceptional mentors are making a difference in the lives of Girl Scouts and the future! Are any other credit unions doing something like this? I’m curious to know what else is going on out there in the spirit of mentoring our youth.

Jodi Jones is the Public Relations Officer for the Mountain America Credit Union and a board member of the Utah Jump$tart Coalition.

My last post discussed the importance of changing old habits and bringing innovative thinking back into the credit union movement. As I discussed in that post, Robert Gates is helping The Air Force get through the same problem. Here are some other comments from the Washington Post and Gates that can be applied to credit unions:

Washington Post:

1. “Gates expressed frustration with conventional military thinking that he said has been slow to adapt to current threats. The U.S. Air Force has not moved fast enough to meet a need for unmanned aircraft, which often can hunt and target enemies more efficiently than piloted planes.”

   Gee, does change mean that some people [pilots and crews] may no longer be needed? Every change we make will be met with at least some resistance. Jobs will change. And it’s clear from the credit union movement leaders that costs must be reduced in operations so that the resources can be invested in marketing and membership growth. How can we use the respectful and helpful credit union culture to help employees and boards grapple with new ways of doing things?

2. “The speech…appeared aimed at challenging young officers to become more innovative thinkers.”

   At least Gates is appealing to young officers. Are our boards and C-suites full of young “officers?” Why not? How will we recruit more of those “young officers,” our future, to positions of influence? Then, how do we make sure they represent innovation and not just personally profit from maintaining the status quo?

Robert Gates:

1. “For the good of the Air Force, for the good of the armed services and for the good of our country, I urge you to reject convention and careerism…and become more creative thinkers.

   The challenge that I pose to you today is to become a forward-thinking officer who helps the Air Force adapt to a constantly changing strategic environment characterized by persistent conflict.”

   It’s easy to be complacent when we don’t feel threatened. Are credit unions immune from “persistent conflict?” How about ABA attacks? Constant change? How about Wal-Mart, ING and the community banks that are sown and profitably harvested in our own backyards? Even if we don’t feel threatened, and we are, we need to act wisely as if we are. Because we are threatened.

2. “An unconventional era of warfare requires unconventional thinkers.”

   This reminds me of what Andy LaFlamme said in the blog, OpensourceCU: “The hierarchal structure of most financial institutions makes it very difficult for lower level employees (tellers and MSRs) to bring up ideas. Typically the proper channel of communication ends up smothering the idea as unusable, or it gets lost before it makes it to somebody who might care.”

3. “The Air Force will be increasingly called upon to conduct civil-military or humanitarian operations with civilian partners and to deal directly with local populations. Such missions will require foreign language and cultural expertise.”

   When will credit unions “deal directly” with the young prospects, whom we need to thrive? We’ll also need “foreign language and cultural expertise” to win them over.

   So, the leadership of the credit union movement is calling for more innovation, taking marketing risks and forcing us to band together to deflect ABA attacks. That’s wonderful. But let’s ask ourselves, what can my credit union do break away from old habits and enlist “young officers” for our C-suits and boards? How can we handle the dissent that comes with challenging, and in fact changing, the status quo?

   Gates provides a couple ideas:

   • “Dissent is a sign of health in an organization, and particularly if it’s done in the right way and respectfully and so on, but people who dissent, who take a different view . . . are always at risk in their careers. The biggest challenge for out-of-the-box thinking is the wisdom of the senior leader who sees the value of that kind of thinking and protects it and the people who do it.”

Credit union membership is barely growing. In fact, it’s losing market share to banks and newer types of financial service providers such as ING. And goodness knows what Wal-Mart will do to us!

When was the last time the credit union movement launched a breakthrough, differentiating product or service? Are we dragging traditional thinking around like mules pulling a plow? Is success in our jobs a result of following the rules and carrying out the status quo?

Guess what. We‘re not alone. The Air Force is also hampered by old habits. According to the Washington Post, “Defense Secretary Robert M. Gates chided the U.S. armed forces today for not providing enough intelligence, surveillance and reconnaissance help to troops fighting in Iraq and Afghanistan, saying it has been ‘like pulling teeth’ to get the services to change old habits.”

Robert Gates is pushing The Air Force to change its old habits. Who’s pushing us in the credit union movement to change ours? Our employees? They won’t put their jobs at risk by pushing for change. Our boards? They are rarely futurists. Filene’s i3 group? Will we leave it up to BankAmerica, ING and Wal-Mart to push us to change? And then will we just be reacting?

After discussing some issues I have had buying a house, Kurt referred me to this blog post by Tim Kane about the notoriously bad behavior of title insurance companies. It got me thinking about customer service and credit unions.

I think banks are commonly being seen as gigantic institutions that care more about making money for themselves than really helping customers. No matter how many times banks tell me they put me first, it is hard to get beyond the stereotype and really believe them.

This is a great opportunity for credit unions. My advice?

1. Show me, don’t tell me. Every company tells me I’m important – to really get me to believe it, you need to show me how much you care. Sound Credit Union’s Random Acts of Easy is a great example of this. And yes, every example in the video really happened.

2. Empower your employees. When your employee is empowered to go the extra mile to help me, your credit union will create a brand that I and other members want to be loyal to. Having empowered employees means problem solving takes less time and presents a more seamless experience for me.

   Employees of the Ritz Carlton have a list of values they abide by. The sixth one says that employees own and immediately resolve guest problems – desk clerks, bellboys and housekeepers can spend up to $2,000 without needing further authorization from a manager. One employee’s customer forgot his briefcase when flying out to a meeting. The employee got a cab to the airport, bought a ticket, flew to the customer and delivered his briefcase. When the employee returned, his manager congratulated him and reimbursed all the charges.

3. Me first. By putting me and the rest of your members as your #1 priority you create a customer service culture. This is the type of action that you do want to be known for.

   Nordstrom’s is well known for customer service. Most people have heard about the 1975 incident where a customer wanted to return some snow tires, which Nordstrom’s doesn’t sell, and they gave the customer a refund anyway.

A reputation for phenomenal customer service is a great way to help ensure the longevity of your company. Innovative thinking and treating your members well will help keep me coming back to you, and referring my friends and family. I guess it’s true what my mother said: “Do unto others as you would have them do unto you.”