Let’s face facts. The traditional ways of doing retail banking are going the way of the dodo bird, dinosaur, and wooly mammoth. Times have changed and financial institutions need to keep up. Digital banking, effective cross-selling, and using data are three of the most critical things that FI’s need to embrace…right now.
A recent article points out that the success of a financial institution depends largely on how deep the relationships with their account holders go. Put more succinctly: the higher your credit union’s products-per-member (or services-per-member) ratio, the higher your credit union’s performance. The article states that credit unions should have a goal of at least 2.5 products-per-member. Yet fewer than 450 credit unions nationwide hit that mark. Of course, every credit union decides for itself what defines a “product” or “service.” So the 2.5 ratio is a bit subjective. But if you think about it,, getting to 2.5 isn’t all that difficult. Every member is required to have a savings account. If your members also opened a checking account and a credit card with you, you’ve hit the mark and more.
Getting new members to join your credit union is vital to your long-term success. There’s no doubt about that! However, many organizations forgo the amazing opportunities that exist within their current membership rolls. Here are 3 tips on how to improve your products-per-member ratio:
Run reports – if you have one, use your MCIF system to segment your membership. If you don’t have an MCIF, work with your core provider to run SQL reports based on specific parameters. Here’s an example of a great first report to run: Members, ages 25-45, no credit union checking account, no credit union credit card.
Implement Cross-Selling – stop thinking about it and just do it. Your competition is doing it. Make sure you train the employees and if your people continue to fight you on “selling,” it might be time for them to leave your organization.
Make things SUPER-convenient – if you can, get rid of paper applications. Automate as much as you can. If you’re talking to a member about transferring a credit card balance, do the work for them. If you’re refinancing a loan, show the numbers, talk in terms of monthly payment savings, and stop relying so much on the low rate. Most people don’t care about rates. They care about what they can afford as a monthly payment. Give them what they want. Simplify, simplify, simplify. If moving accounts to your credit union is perceived as a hassle, people simply won’t do it.
Go forth and develop more business!