If you are a credit union executive, it's time to pull your head out of the sand, take a long look in the mirror, and remember who you are. There, I said it. It’s been driving me crazy for months, but it needed to be said. Don’t get me wrong. As a credit union leader, you are part of an incredible movement with a rich history of innovation. But that’s just it. Credit unions have a rich history and a weak present. Rather than being a driving force in the market, you are sitting in the backseat. Or worse, watching what is happening from the sidewalk.
In your past, you were the catalysts. The game-changers. And whether you realized it or not, the banks followed you. Debit cards, ATMs, being the first to lend to women in their own names! In the past, when you saw a gap you filled it. Today it's increasingly likely that you are focusing on the wrong things. Playing the wrong game. You are going about trying to build market share using the same methods that worked in the 80s and 90s, and you've stopped innovating. Dr Phil moment coming: how is that working for you? If you're not sure, I can tell you. Credit union market share is in trouble, and the tide isn't turning anytime soon.
In your past, you were the catalysts. The game-changers. And whether you realized it or not, the banks followed you.
So here’s what’s really happening. While you’re attending leadership conferences, lunching with executive coaches, and reading business books, the game is changing around you. But this time it’s not because of what you are doing, which means it’s going to be difficult to keep up.
Do terms like cryptocurrency, peer-to-peer lending, and artificial intelligence scare you? They should. Because you likely don’t have a plan to counter them. Or better yet, become a provider/partner of them. This is why in very short order you need to change your mindset, to return to your roots.
You, and your entire team, need to start thinking like entrepreneurs.
1. Stop playing catch up and start changing the game: Credit unions spend too much time just trying to catch up to the banks, and that's a problem. Not just because of the effort involved, but because the market is heading for an earth shattering change. According to a recent Viacom survey, 73 percent of millennial respondents said they would be excited about using financial services from brands like Google or Amazon (yes, they used excited and financial services in the same sentence), and 33 percent don't believe they will need a bank at all within 5 years. Cue Jaws soundtrack here.
Rather than follow suit with the big players, an entrepreneur takes a look at the market and tries to find what everyone else isn't doing; what the market needs or wants instead of what it already has. Entrepreneurs study the market for just such opportunities, then they work to carve out a niche and own it. Then, when big industry sees that they are changing the game they follow suit. Case in point, take a look at what is happening in the cryptocurrency space, with seven banks just recently stepping up to integrate blockchain technology into their banking systems.
2. Learn to hustle: Entrepreneurs are some of the most persistent and driven people we've ever met. They live, eat, and breathe their business and believe in "the game". By comparison, we can't tell you how many credit union leaders we've met who seem to have "lost that lovin' feeling". To start thinking like an entrepreneur again, you need to realize that there are other financial institutions out there working harder than you to gain your customers' business (and a growing number of those aren’t even in the traditional FI space!). You have to want it as badly as they do, or your customers will learn that there are better options available and look elsewhere.
3. Lead with why: Paging Simon Sinek! The “Start With Why” author, and successful entrepreneur, realized that people make buying decisions not because of what you do but because of why you do it. It’s what sells, because your why is tied to your emotional brain, and that most often rules reason. Do you know your why? If it’s not better than “to offer local banking where you are more than just a number”, you don’t have one yet. A better option off the top of my head? “To help real people make real dreams come true.” Feel free to steal/massage that if you like.
(If you haven't watched Simon Sinek's Ted talk yet, take a minute and find out what the fuss is all about. Or, watch it again!)
4. Be an expert in what you sell: This is so basic that I’m surprised I have to say it at all. In fact, I won’t say it. I’ll turn it over to the dozens of credit union employees who have said to us over the years: “I’m called an ‘expert’ but I’ve only received three weeks of training!”, “People come to me for advice but I barely know the products myself.”, “I frequently learn about a product or service just before I have to tell someone about it.” If you don’t see the problem, please give me a call. By comparison, entrepreneurs dedicate themselves to being able to explain a product inside and out. They know the benefits, the pitfalls, the ways to make it work best for their customers. If your staff aren’t confident that they are actual experts, there is important work to do.
5. Learn to self-promote: We're not talking about products or services, we're talking about true brand recognition through consistent and frequent promotion across several popular media channels. What makes your CU different? What do you care about? What makes your heart beat faster? What are you doing that no-one else is? Even the smallest of towns have two or three FIs to choose from. So it’s important that you are a voice that potential members regularly hear from. Or at least can easily find when they are looking for a product to serve their needs.
Are you remembering your roots yet? In the financial space, credit unions were the original entrepreneurs; the ones that set out on their own when the status quo wasn’t working for them. Today’s market is practically begging for you - or anyone - to do that again. To move what seems immovable. So much so, that they are forging out to create their own systems of banking that better reflect what they need - just like you did. The big question is whether or not credit unions will still be around when those ideas become fully grown.
If you are looking for more ideas of how to bring the entrepreneur mindset to your credit union (like focusing on social proof, empowering employees to be brand advocates, providing more value than you receive, etc. etc.) give us a call. If you are already doing some of these, what are your experiences? What are your greatest challenges? Tell us what you think in the comments. We’d love to get your candid response!
Jeremy Whittingstall is CEO of CUmark, a long-time credit union advocate, and marketing consultant to credit unions across Canada.
Photo by: Garrhet Sampson