11

““Providing Strategies for SuccessProviding Strategies for Success””Growing Against the Grain: Growing Against the Grain:

Best Practice Credit Union Thrival Best Practice Credit Union Thrival Strategies Strategies

Utah League Annual MeetingUtah League Annual MeetingMarch 14-15March 14-15thth, 2014, 2014

Presented By: John A. Vardallas CAE,CUDE Presented By: John A. Vardallas CAE,CUDE Professional Speaker/Business Strategist Professional Speaker/Business Strategist Founder/CEO TheAmericanBoomeR Group Founder/CEO TheAmericanBoomeR Group

www.theamericanboomer.comwww.theamericanboomer.com

22

Welcome Utah Credit Union Welcome Utah Credit Union Leaders!Leaders!

33

My First Car…….My First Car…….

44

My Team…….My Team…….

55

My Credit Unions…My Credit Unions…

UW Credit UnionUW Credit Union ($1.7 Billion)($1.7 Billion) Summit Summit Credit UnionCredit Union ($1.9 Billion)($1.9 Billion)

66

Today s Program ObjectivesToday s Program ObjectivesThis session will focus on how CU s can position This session will focus on how CU s can position

themselves for future growth….themselves for future growth….

To identify and assess the new financial services To identify and assess the new financial services marketplace competition.marketplace competition.

To utilize the Credit Union Competitive Advantage To utilize the Credit Union Competitive Advantage in telling our story to members and the community.in telling our story to members and the community.

To explore Strategies for Thriving not just To explore Strategies for Thriving not just Surviving for using our competitive advantages in Surviving for using our competitive advantages in increasing loan volume and market/wallet share.increasing loan volume and market/wallet share.

To review some To review some ““Best PracticeBest Practice”” Credit Unions for Credit Unions for Ideas on utilizing sound Business Growth Ideas on utilizing sound Business Growth Strategies.Strategies.

77

Today We Will Discuss CU

Growth During Uncertain Future

Times

88

Credit Union Metrics for 2013…Credit Union Metrics for 2013…

Total Credit UnionsTotal Credit Unions: 6,500+: 6,500+Total CU BranchesTotal CU Branches: 21,000 +: 21,000 +Total MembershipTotal Membership: 96,000,000+ : 96,000,000+ Total AssetsTotal Assets: Surpassed $1 Trillion : Surpassed $1 Trillion

Milestone Milestone

99

Stronger Member Activity in 2013Stronger Member Activity in 2013

• Loan/Share Ratio 70.9% • Loan Growth Up 6.9%• New/Used Autos grew 11.2 %/9.8%• Share Growth 2.8%• Consumer Lending Up 8.5%• Net Worth Ratio: 10.7%• 2.3 + Nationwide Average Accounts Per

Member (Callahan)

1010

Why this Why this ResurgenceResurgence in 2013? in 2013? Improving economy?Improving economy? Better pricing?Better pricing? Lingering Bank Transfer Day effect?Lingering Bank Transfer Day effect? Pull back by the competition?Pull back by the competition? Competitor missteps?Competitor missteps? Credit unionsCredit unions’’ approach to serving their approach to serving their

member owners?member owners? Consumers using different criteria when Consumers using different criteria when

selecting a different kind of financial selecting a different kind of financial institution?institution?

Sponsored by:

Key Factor 4 Why Growth in 2014: Net Interest Margins Are Key Factor 4 Why Growth in 2014: Net Interest Margins Are Not Cover Operating expenses! Not Cover Operating expenses!

Source: Callahan’s Peer-to-Peer Analytics

Data as of December 31

1212

The 2014 Economic The 2014 Economic ““New NormalNew Normal”” Trends…Trends…

Slow Economic Growth Slow Economic Growth Weak Demand for GoodsWeak Demand for Goods New Era of New Era of ““Consumer ThriftConsumer Thrift”” Higher UnemploymentHigher Unemployment Tighter Underwriting StandardsTighter Underwriting Standards Loan/Savings Growth (7%/4%)Loan/Savings Growth (7%/4%) Stagnant Household IncomeStagnant Household Income Higher Tax Levels Higher Tax Levels (CUNA E-SCAN)(CUNA E-SCAN)

1313

Lets Look at Why Credit Unions Need Lets Look at Why Credit Unions Need to Continue Our Growth Strategies…to Continue Our Growth Strategies…

LETS TRAVEL DOWN THE COMPETITIVE LETS TRAVEL DOWN THE COMPETITIVE FINANCIAL SERVICES HIGHWAY FINANCIAL SERVICES HIGHWAY

1414

The New Competition…The New Competition…10%

Market Share out

of $63 Trillion

Total Fin Services Industry

1515

The Competition: Who Are They?The Competition: Who Are They?-- -- Banks/Prosper.com/Lending Club/KEVA.com (PTP Banks/Prosper.com/Lending Club/KEVA.com (PTP

online lending/borrowing .coms) Western Sky online lending/borrowing .coms) Western Sky Financial/Cash Net.comFinancial/Cash Net.com

-- Finance/Insurance Companies (GM/Ford/State Farm -- Finance/Insurance Companies (GM/Ford/State Farm Bank/Allstate/USAA).Bank/Allstate/USAA).

-- Mutual Funds/Brokerage Houses/H&R Block.-- Mutual Funds/Brokerage Houses/H&R Block.-- Retailers/Card Companies/Wall Mart/Home Depot.-- Retailers/Card Companies/Wall Mart/Home Depot.-- .com Orgs (Lending Tree, National Mortgage, Car Quest, My -- .com Orgs (Lending Tree, National Mortgage, Car Quest, My

Card.com, ING Direct, etc).Card.com, ING Direct, etc).-- Pawn Shops/Quick Cash/Pay Day Lenders/Campus Cash/ -- Pawn Shops/Quick Cash/Pay Day Lenders/Campus Cash/

Check Cashers/Money Stores.Check Cashers/Money Stores.What Do They WantWhat Do They Want? ? Your Members BusinessYour Members Business!!

1616

How Can A Credit Union Grow?How Can A Credit Union Grow?Let us Count the Ways….Let us Count the Ways….1)1) More Members (Market Share)More Members (Market Share)2)2) More Product/Service Usage More Product/Service Usage by Members (Wallet Share)by Members (Wallet Share)3) Mergers3) Mergers4)4) Fees/InvestmentsFees/Investments5)5) Non Interest Income (Interchange)Non Interest Income (Interchange) (Sales from Insurance/Fin Products)(Sales from Insurance/Fin Products)

1717

We Must Think We Must Think ““Outside the BoxOutside the Box”” and Look to Create Our and Look to Create Our

““Blue OceanBlue Ocean””…… Our Leaders must Our Leaders must Embrace Embrace ChangeChange and the and the New NormalNew Normal: : More Emphasis on More Emphasis on Innova-Innova-ShunShun--Less on --Less on Tradi-shunTradi-shun..Creativity Creativity is thinking up new is thinking up new things. things. InnovationInnovation is doing new things is doing new things..

Theodore Levitt management expert

1818

Ideas for How We Can Create Our Ideas for How We Can Create Our ““CU Blue OceanCU Blue Ocean””

Can we create our Can we create our ““Blue OceanBlue Ocean”” for….. for….. SmallSmall BusinessesBusinesses by being the Financial by being the Financial

Institution of Choice in our community?Institution of Choice in our community? Can we create our Blue Ocean for Can we create our Blue Ocean for Serving theServing the

UnderservedUnderserved?? Can we create our Blue Ocean by helping Can we create our Blue Ocean by helping

ImmigrantsImmigrants (the New Americans) get (the New Americans) get established in our communities?established in our communities?

Can we create our Blue Ocean by being a Can we create our Blue Ocean by being a Trusted FinancialTrusted Financial AdvocateAdvocate//AdvisorAdvisor for our for our members/offering the best members/offering the best Financial EducationFinancial Education programs to consumers? programs to consumers?

1919

The Lifeblood The Lifeblood of of

Credit UnionsCredit UnionsFocus on being a Member Centric CU because Focus on being a Member Centric CU because

Members are the Source of All ProsperityMembers are the Source of All Prosperity

2020

What Will It Take To Keep Me A What Will It Take To Keep Me A Member in the Future….Member in the Future….

More Customized ProductsMore Customized Products– I want to see products designed/crafted to – I want to see products designed/crafted to my needs!my needs!

Personalized MarketingPersonalized Marketing– I– I’’ am tired of zapping through the same old am tired of zapping through the same old information. Send info about products I want via e-mail, web information. Send info about products I want via e-mail, web site,cross sell, newsletter, I donsite,cross sell, newsletter, I don’’t care. If its news I can use It care. If its news I can use I’’ll pay ll pay attention.attention.

No Excuse ServiceNo Excuse Service– Train your people to respond to my concerns as if – Train your people to respond to my concerns as if they were the most important things in the world. Ban the phrase they were the most important things in the world. Ban the phrase ““Its Its not my deptnot my dept””. Wow me at every chance you get to serve me. . Wow me at every chance you get to serve me.

One Stop ShoppingOne Stop Shopping– Make it easy for me to interact and do business – Make it easy for me to interact and do business with you in person and online 24/7/365.with you in person and online 24/7/365.

Rapid ChangeRapid Change– Don– Don’’t wait to make these shifts….t wait to make these shifts…. II’’ am already shopping your competition! am already shopping your competition!

2121

When We Bring in A When We Bring in A ““New MemberNew Member””……

Offer A Offer A ““CU Welcome On-Boarding PacketCU Welcome On-Boarding Packet””::-- -- Welcome to Our CU Family Letter signed by CEO/Chairman Welcome to Our CU Family Letter signed by CEO/Chairman

(Member Advocates Connect with new members First 90 days)(Member Advocates Connect with new members First 90 days)-- Product/Service Information Brochures-- Product/Service Information Brochures-- Hours of Operation (7x24x365)/Web Site info-- Hours of Operation (7x24x365)/Web Site info-- Member Card/Discloser Forms-- Member Card/Discloser Forms-- All in One Member/Loan Application-- All in One Member/Loan Application-- Department/Staff Listing/Concierge Services -- Department/Staff Listing/Concierge Services -- Certificate of Member Ownership/Member Care 800#-- Certificate of Member Ownership/Member Care 800#-- Teach Members to Self Serve Themselves via Tech-- Teach Members to Self Serve Themselves via Tech-- Set up Outbound Call Center/ follow up personalized calls to -- Set up Outbound Call Center/ follow up personalized calls to

build more profitable relationships with members who join build more profitable relationships with members who join through remote channels.through remote channels.

2222

2323

2424

Note:Note: Tips 4 Connecting With Tips 4 Connecting With Different Gen MembersDifferent Gen Members

Greatest GenerationGreatest Generation (Pre WW2)(Pre WW2)Write Me!Write Me! Baby BoomersBaby Boomers (1946-1964) (1946-1964)Call Me!Call Me! Generation XGeneration X (1965-1981) (1965-1981)E-mail Me!E-mail Me! Generation Y-ZGeneration Y-Z (1982-1995) (1996-ON) (1982-1995) (1996-ON)Text/FB/Tweet Me!Text/FB/Tweet Me!

2525

Thoughts on Fees…. Thoughts on Fees…. 2 FEE or NOT 2 FEE?2 FEE or NOT 2 FEE?

Fee, Fy Fee, Fy Fo, FumFo, Fum

We Need Some We Need Some Income!Income!

2626

Review Your Review Your ““FEEFEE”” Structure StructureWhy?Why?With Tight Margins/Flat Yields in Financial Institutions… we With Tight Margins/Flat Yields in Financial Institutions… we

need to consider: need to consider: Fee IncomeFee Income as offsetting this situation. as offsetting this situation.40%40% of Banking Income is from Fees of Banking Income is from FeesCU Fee Income Up 30%CU Fee Income Up 30% last ten years. last ten years.10%10% of Credit Union Income is from Fees of Credit Union Income is from FeesStrategic QStrategic Q: : Are you leaving $ on the table?Are you leaving $ on the table? SuggestionSuggestion: Have Good Waiver Policies: Have Good Waiver Policies(Loose approach leads to missed $)(Loose approach leads to missed $)

2727

New Business Growth New Business Growth Opportunities Abound !…Opportunities Abound !…

Serving New Americans/The Underserved (Hispanics)Serving New Americans/The Underserved (Hispanics) (30+ million immigrants in USA/$Bill Remittances)(30+ million immigrants in USA/$Bill Remittances) Offer Risk Based Pricing/Debit Cards for Interchange $Offer Risk Based Pricing/Debit Cards for Interchange $ Check Cashing/Business Services/Lending/E-Car LotCheck Cashing/Business Services/Lending/E-Car Lot Offer Burial/Will/Tax ServicesOffer Burial/Will/Tax Services Lifestyle/New Image LendingLifestyle/New Image Lending (Nip & Tuck Services) (Nip & Tuck Services) $12 billion spent on Cosmetic Procedures in USA$12 billion spent on Cosmetic Procedures in USA Health Savings Accounts/Better Pay Day Loan ProgramsHealth Savings Accounts/Better Pay Day Loan Programs Get to Love Boomers/Women/SBO s MoreGet to Love Boomers/Women/SBO s More Capitalize on Bank Vulnerability: Occupy CUs/Recapture Capitalize on Bank Vulnerability: Occupy CUs/Recapture

Checking Business (Utilize Switch Kits More)Checking Business (Utilize Switch Kits More) Other Non Interest Income via CUSO (Insurance/Travel) Other Non Interest Income via CUSO (Insurance/Travel)

2828

Some Divide & Conquer: Some Divide & Conquer: ““Work the Street Growth StrategiesWork the Street Growth Strategies””……

Break Down Members into Cluster Groups and Market Break Down Members into Cluster Groups and Market to those needsto those needs

Youth/Young AdultsYouth/Young Adults Single/MarriedSingle/Married Baby BoomersBaby Boomers SeniorsSeniors The UnderservedThe Underserved Small Business SectorSmall Business Sector3 Key Groups/Areas3 Key Groups/Areas to Focus on: to Focus on: 1) Young Adults 2) Boomers 3) Small Business1) Young Adults 2) Boomers 3) Small Business

2929

1)1) Divide & Conquer Example: Divide & Conquer Example: The Gens Y&X (The Gens Y&X (““The UtesThe Utes””))(They are the Next Gen of Borrowers)…(They are the Next Gen of Borrowers)…

Age DemographicAge Demographic: Born After 1980: Born After 1980CharacteristicsCharacteristics: Born with Internet, experiences beyond their : Born with Internet, experiences beyond their

years, older parents, may not have to work, independent earlier . years, older parents, may not have to work, independent earlier . (80% unaware they can join a CU) (80% unaware they can join a CU) Looking to Credit Union for help withLooking to Credit Union for help with::Getting started, establishing credit, checking acct, education Getting started, establishing credit, checking acct, education

loans, first car, credit/debit cardsloans, first car, credit/debit cardsReach Them ByReach Them By: Clubs, Student CUs, I-pods/phones/I-app with : Clubs, Student CUs, I-pods/phones/I-app with

Loans, Kool cu web page, put on Youth Task Force/Committees, Loans, Kool cu web page, put on Youth Task Force/Committees, Provide Scholarships/Offer Brass Magazine .com Provide Scholarships/Offer Brass Magazine .com

3030

2) Americans Over 50… the New 30!2) Americans Over 50… the New 30! ““A BIG MARKETA BIG MARKET””……

70% OF WEALTH70% OF WEALTH 77% OF FINANCIAL ASSETS77% OF FINANCIAL ASSETS 50% OF IRAs/KEOGHS50% OF IRAs/KEOGHS 40% MUTUAL FUNDS40% MUTUAL FUNDS 66% OF STOCK MARKET66% OF STOCK MARKET 46% OF HOME EQUITY LOANS46% OF HOME EQUITY LOANS 40 MILLION CREDIT CARD USERS40 MILLION CREDIT CARD USERS 41% OF NEW CAR PURCHASES41% OF NEW CAR PURCHASES 50% OF DISCRETIONARY SPENDING50% OF DISCRETIONARY SPENDING

3131

Divide & Conquer Example:Divide & Conquer Example:Your Your ““BoomerBoomer”” Members Members

(They Have/Will Have the $)(They Have/Will Have the $)Age DemographicAge Demographic: Born 1945-1965 : Born 1945-1965 CharacteristicCharacteristic: Known as : Known as ““SandwichSandwich””, Me Generation, Me Generation(Stand to Inherit $10 Trillion/ Will Pass On $30 Trillion 2 Gens X/Y) (Stand to Inherit $10 Trillion/ Will Pass On $30 Trillion 2 Gens X/Y) Looking to the Credit Union For help withLooking to the Credit Union For help with::--Trusts, Luxury Cars, RV/SUVs?/Harleys?--Trusts, Luxury Cars, RV/SUVs?/Harleys?-- -- New ImageNew Image (Nip & Tuck Lifestyle Loans) (Nip & Tuck Lifestyle Loans)-- College Fund/Bill Pay/Reverse Mortgages-- College Fund/Bill Pay/Reverse Mortgages-- IRA/Business Loan/Long Term Health Care-- IRA/Business Loan/Long Term Health Care-- RETIREMENT PLANNING/Wealth Transfer Management-- RETIREMENT PLANNING/Wealth Transfer Management(Pensions Declining trend, shift to Personal responsibility)(Pensions Declining trend, shift to Personal responsibility)

Have Other Influences on their Kids/ParentsHave Other Influences on their Kids/Parents

3232

What Can Your Do to Make Your What Can Your Do to Make Your Credit Union More Appealing to Credit Union More Appealing to

Boomers…Boomers… Make information Simple and in larger type fontsMake information Simple and in larger type fonts Have Have CarpetingCarpeting in the CU for a more quiet area in the CU for a more quiet area Use soft Use soft Retro Musak/Retro Musak/Make literature racks eye level/Have staff Make literature racks eye level/Have staff

use Direct eye contact with Boomersuse Direct eye contact with Boomers Use warmer Use warmer Paint/TonePaint/Tone colors in your CU colors in your CU Go GreenGo Green, use plants soft white lights, use plants soft white lights Make Parking spaces/drives through a bit widerMake Parking spaces/drives through a bit wider Omit the using Omit the using SeniorSenior when addressing Boomers when addressing Boomers (they consider themselves mid lifers) (they consider themselves mid lifers) Set up a Set up a ““Retirement Planning Education CenterRetirement Planning Education Center””– Offer Special – Offer Special

on setting up a on setting up a SS Direct Deposit AcctSS Direct Deposit Acct since now all Retiree since now all Retiree checks from GOV will be direct deposit checks from GOV will be direct deposit

Bring back the Bring back the ““ToasterToaster”” as a premium giveaway! as a premium giveaway!

3333

3) The Small Business Sector…3) The Small Business Sector…

Is the Growing Small Business sector in Your Is the Growing Small Business sector in Your Community an opportunity for your CU ?Community an opportunity for your CU ?

-- 5 Million Small Businesses in US-- 5 Million Small Businesses in US (companies less the 500 (companies less the 500 employees/45 % of private payrolls/created employees/45 % of private payrolls/created

60-80% of US JOBS the last decade)60-80% of US JOBS the last decade)-- 10 Million self employed persons +-- 10 Million self employed persons + (Restaurants/Salons/MDs/Dentists/Service (Restaurants/Salons/MDs/Dentists/Service

Companies/Retail Stores/Consultants)Companies/Retail Stores/Consultants)-- Loans-- Loans-- Deposits-- Deposits-- Fee Income/Merchant – Funded Rewards-- Fee Income/Merchant – Funded Rewards-- Potential Employee Membership-- Potential Employee Membership

3434

Common Strengths & Practices of Common Strengths & Practices of Successful CUs in 2013….Successful CUs in 2013….

A Good/Improving A Good/Improving Sales CultureSales Culture.. Consistent Consistent UnderwritingUnderwriting/Good /Good StandardsStandards.. Market PowerMarket Power - 1st Choice Community Lenders. - 1st Choice Community Lenders. Symbiotic Product LinesSymbiotic Product Lines -Cross selling from each other- -Cross selling from each other-

auto and credit cards.auto and credit cards. Direct/Indirect LendingDirect/Indirect Lending -To Existing Members and Branch -To Existing Members and Branch

Traffic/Strong Dealership Relations.Traffic/Strong Dealership Relations. Make Bank Transfer Day EverydayMake Bank Transfer Day Everyday! Keep Fanning the ! Keep Fanning the

Flames of New Member Fans!Flames of New Member Fans! Offer IncentivesOffer Incentives– Lifetime Free Checking/Debit – Lifetime Free Checking/Debit

Rewards/Cash Backs/Convert Credit Cards/E-Rewards/Cash Backs/Convert Credit Cards/E-Statements/Mobil Apps/Groupon.Statements/Mobil Apps/Groupon.

3535

A Look @ Some Recent Best Practice A Look @ Some Recent Best Practice Growth Credit Unions…Growth Credit Unions…

1)1) Alabama Telco CU (Alabama Telco CU ($450M+) Birmingham AL$450M+) Birmingham ALDeposit/Loan Balances up to 20%Deposit/Loan Balances up to 20%New Loans/ New Households Up 60%New Loans/ New Households Up 60%CU Strategy: How Did they do it?CU Strategy: How Did they do it?-- Took A Strategic Marketing Approach-- Took A Strategic Marketing Approach-- Use -- Use MCIF AnalyzerMCIF Analyzer (pull demographics/break down (pull demographics/break down

accts into profitability and trigger follow up calls/mail accts into profitability and trigger follow up calls/mail campaigns)campaigns)

-- Sell more to each Member Household-- Sell more to each Member Household-- Created Member On Boarding program for New -- Created Member On Boarding program for New

accounts / Contact prospects into Members accounts / Contact prospects into Members

3636

Best Practice Credit Unions (cont)Best Practice Credit Unions (cont)

2)2) Brewton Mill FCU Brewton Mill FCU ($21M) Brewton, Alabama($21M) Brewton, AlabamaFive Year Average Annual Growth: Five Year Average Annual Growth: 10%+10%+Five Year Average Membership GrowthFive Year Average Membership Growth: 20% : 20% CU Strategy: How Did they do it!CU Strategy: How Did they do it!-- Moved to Community Charter, expand CU services, -- Moved to Community Charter, expand CU services,

adding debit, share drafts, and CDsadding debit, share drafts, and CDs-- Immersing CU in the Community Sponsoring local -- Immersing CU in the Community Sponsoring local

events/charities.events/charities.-- Converting Bank Customers focusing on CU Safety-- Converting Bank Customers focusing on CU Safety-- Increasing Advertising activities/Re-Branding the CU -- Increasing Advertising activities/Re-Branding the CU

with message CU is for Everybodywith message CU is for Everybody

3737

Best Practice Credit Unions…Best Practice Credit Unions…

3) 3) United Labor Credit UnionUnited Labor Credit Union ($9.7 M) Kansas City MO($9.7 M) Kansas City MOPrimary Membership: Construction workersPrimary Membership: Construction workersAuto Loan Growth Up 9%Auto Loan Growth Up 9%CU Strategy: How Did They Do It!CU Strategy: How Did They Do It!-- Improving Relations with SEG/Get out in Front of -- Improving Relations with SEG/Get out in Front of

People/Build Trust.People/Build Trust.-- Go after Pent up Demand for Vehicles.-- Go after Pent up Demand for Vehicles.-- Less emphasis on Credit Score/Offer -- Less emphasis on Credit Score/Offer ““Empower HourEmpower Hour”” to to

learn more about members financial needs. learn more about members financial needs. -- Offers regular Financial Education/Retirement Planning -- Offers regular Financial Education/Retirement Planning

Seminars and looks for opportunities how the CU can help Seminars and looks for opportunities how the CU can help members.members.

3838

More Best Practice More Best Practice Credit Unions…Credit Unions…

4)4) Upper Cumberland Credit UnionUpper Cumberland Credit Union ($30M) Crossville, TN ($30M) Crossville, TN Achieved a 7%+ Membership growth/30% Loan growth. Achieved a 7%+ Membership growth/30% Loan growth.

CU Strategy: How Did They Do It?CU Strategy: How Did They Do It? All staff carry the title Member Advisor/All take time with members All staff carry the title Member Advisor/All take time with members

to cross sell/ all trained to contribute to the success of the CU has a to cross sell/ all trained to contribute to the success of the CU has a institution –wide sales emphasis.institution –wide sales emphasis.

Rewards/BonusesRewards/Bonuses are spread across all CU business units. are spread across all CU business units. 5)5) Randolph-Brooks FCU Randolph-Brooks FCU ( ($5.3B)$5.3B) San Antonio, TX witnessed a San Antonio, TX witnessed a

10%+ Real Estate Lending, 10% Auto Lending and 20% Credit Card 10%+ Real Estate Lending, 10% Auto Lending and 20% Credit Card Growth.Growth.

CU Strategy: How Did They Do It? CU Strategy: How Did They Do It? Increased Marketing, Shorter term Increased Marketing, Shorter term loans focusing on members in their 20/30s who need Core services, loans focusing on members in their 20/30s who need Core services, first home/car/checking account. Non interest income driven & first home/car/checking account. Non interest income driven & diversifying income streams.diversifying income streams.

3939

My Top 13 in 14 My Top 13 in 14 ““CU ThrivalCU Thrival”” Growth Strategies… Growth Strategies…

1)1) Work Your CU Back Yard (wallet share)Work Your CU Back Yard (wallet share) Focus on Deepening Focus on Deepening Relationships by promoting we have $ to Lend with your Relationships by promoting we have $ to Lend with your current Members. Lending is still King!current Members. Lending is still King!

2)2) Review Your Fee Structures-Review Your Fee Structures- for market place adjustments and for market place adjustments and to offset decline in NIM.to offset decline in NIM.

3)3) Have a Merger/Alliance/Collaboration Strategy-Have a Merger/Alliance/Collaboration Strategy- be prepared for be prepared for the potential of taking in another CU.the potential of taking in another CU.

4)4) Train staff to Cross Sell and WowTrain staff to Cross Sell and Wow members at every Touch members at every Touch Point opportunity 7x24x365.Point opportunity 7x24x365.

5)5) Create Best Value Proposition for Members. Create Best Value Proposition for Members. Reconnect with Reconnect with Current/New Members. Keep the CU Transfer On Going. Show Current/New Members. Keep the CU Transfer On Going. Show Membership has privileges offer Incentives: Groupon/Free Membership has privileges offer Incentives: Groupon/Free Credit Report/Prepaid Gift Cards/Cash Backs/Miles Credit Report/Prepaid Gift Cards/Cash Backs/Miles Member Care 800#/Certificate of Membership.Member Care 800#/Certificate of Membership.

4040

Top 13 (cont)…Top 13 (cont)…

6) 6) Offer Relationship PricingOffer Relationship Pricing—the more members use the CU s —the more members use the CU s services, the better the deal. Bundle products (checking/debit services, the better the deal. Bundle products (checking/debit cards) to maximize income.cards) to maximize income.

7) Reach out to 7) Reach out to Boomers/WomenBoomers/Women via Small via Small Business Services/Lifestyle Lending products.Business Services/Lifestyle Lending products.8) 8) Exploit Cost Efficiencies/Control ExpensesExploit Cost Efficiencies/Control Expenses via via Technology (E-Channels/Online/Mobile/Remote).Technology (E-Channels/Online/Mobile/Remote). Eliminate waste: Practice Eliminate waste: Practice ““KaizenKaizen”” ““Process ImprovementProcess Improvement”” Activities. Activities.9) Make it a 9) Make it a Strategic Imperative to Reach Out toStrategic Imperative to Reach Out to Youth/Young AdultsYouth/Young Adults (focus on Financial (focus on Financial Literacy ) via their Literacy ) via their

means: Schools/ I-Phone/Soc Networks. The under 30 means: Schools/ I-Phone/Soc Networks. The under 30 demographic is your next generation of business for your CU. demographic is your next generation of business for your CU.

4141

Top 13 in 14…Top 13 in 14…10) Consider starting a 10) Consider starting a CUSO CUSO offering DP/HR/IT/Traveloffering DP/HR/IT/Travel Products Products

and Services.and Services.11) 11) Focus more on Non Interest IncomeFocus more on Non Interest Income: Debit Cards, (Insurance : Debit Cards, (Insurance

Products (Pet) GAP Coverage, Credit Protection) Products (Pet) GAP Coverage, Credit Protection) (Interchange/Over draft Fees) Investments/Brokerage Services.(Interchange/Over draft Fees) Investments/Brokerage Services.

12) 12) Embrace Mobile/Tablet Technology and SocialEmbrace Mobile/Tablet Technology and Social MediaMedia. Utilize . Utilize innovative ideas to create Apps for this and that and do not innovative ideas to create Apps for this and that and do not Fear Facebook (1 Billion Members Worldwide!) Fear Facebook (1 Billion Members Worldwide!)

(7 Billion Smart Phones/70 Million Tablets Worldwide) (7 Billion Smart Phones/70 Million Tablets Worldwide) Consumers/Members are a Mobile Branch!Consumers/Members are a Mobile Branch!13) 13) Get the Right Staff in the Right seatsGet the Right Staff in the Right seats on your CU Bus and lead on your CU Bus and lead

them in the Right direction to Serve Members more effectively them in the Right direction to Serve Members more effectively and Teach members How 2 Serve Themselves.and Teach members How 2 Serve Themselves.

4242

Transform Your CU Into A Transform Your CU Into A Benchmark Consumer Benchmark Consumer ““WowWow””

Brand OrganizationBrand Organization DisneyDisney (Customers are Guests) (Customers are Guests) Lands EndLands End (Satisfaction GTD) (Satisfaction GTD) StarbucksStarbucks (Taste the Sensory Experience) (Taste the Sensory Experience) Ritz Carlton HotelsRitz Carlton Hotels (5 Star Service) (5 Star Service) NordstromNordstrom’’ss (Lifetime WRTY) (Lifetime WRTY) Southwest AirlinesSouthwest Airlines (Fun & Cheap) (Fun & Cheap) Your Credit UnionYour Credit Union (Member Centric Service?) (Member Centric Service?)

4343

For Future Growth--I would like to see CU For Future Growth--I would like to see CU s Include Performance Measures to Be s Include Performance Measures to Be

More Member FocusedMore Member Focused… …

Traditional:Traditional:““InstitutionalInstitutional”” Capital/AssetsCapital/Assets ROAROA DelinquencyDelinquency Charge-OffsCharge-Offs

NewNew::““Member FocusedMember Focused”” Average Member Average Member

BalancesBalances Product/Service Product/Service

UsageUsage Market ShareMarket Share Member ReturnMember Return

4444

And Finally…As weAnd Finally…As we““Think Outside the BoxThink Outside the Box”” and and ““Grow Against the GrainGrow Against the Grain””… …

RememberRemember““Its not the strongest of Its not the strongest of

the species that the species that survives, nor the survives, nor the most intelligent, itmost intelligent, it’’s s the one that is most the one that is most adaptable to adaptable to ChangeChange””

Charles DarwinCharles Darwin

4545

Thank You For Your Attention & Input…..

I wish you Personal

and Professional Success!

jvardallas@aol.com

www.theamericanboomer.com

4646

About John A. Vardallas About John A. Vardallas CAE,CUDECAE,CUDE““Providing Strategies for SuccessProviding Strategies for Success””

John A. Vardallas is an International Credit Union Business John A. Vardallas is an International Credit Union Business Consultant and Founder/CEO of TheAmericanBoomeR Consultant and Founder/CEO of TheAmericanBoomeR

Group, a Madison Wisconsin based Speaking and Group, a Madison Wisconsin based Speaking and Consulting Business. His work focuses on helping credit Consulting Business. His work focuses on helping credit

union leaders and organizations increase productivity and union leaders and organizations increase productivity and profitability.He conducts High Performance Leadership & profitability.He conducts High Performance Leadership & Management Development, World Class Service, Change Management Development, World Class Service, Change

and Growth programs forand Growth programs for staff and directors. He also staff and directors. He also facilitates Strategic Planning sessions for a variety of credit facilitates Strategic Planning sessions for a variety of credit

unions throughout the US each year.unions throughout the US each year.For a free E-Catalogue of Programs & Services you may contact John/ For a free E-Catalogue of Programs & Services you may contact John/

Office (608) 221-4621 Cell (608) 577-8707/e-mail Office (608) 221-4621 Cell (608) 577-8707/e-mail jvardallas@aol.com/ www.theamericanboomer.comwww.theamericanboomer.com

4747

Lets Keep the Conversation Going…Lets Keep the Conversation Going… Check out Johnny V s Check out Johnny V s Blog/WebsiteBlog/Website @ @www.theamericanboomer.comLeadership Development/Strategic Leadership Development/Strategic

Planning/World Class Service/Subscribe Free Planning/World Class Service/Subscribe Free to to ““Today s BoomeRToday s BoomeR”” Digital Digital MagazineMagazine

E-mailE-mail John Vardallas: jvardallas@aol.com John Vardallas: jvardallas@aol.com Check out TheAmericanBoomeR on Check out TheAmericanBoomeR on FacebookFacebook Follow TheAmericanBoomeR on Follow TheAmericanBoomeR on TwitterTwitter@theamericanboomer@theamericanboomer