FALCON HEIGHTS, Minn. — Return on investment is often hard to put a finger on in the world of technology and outsourced services, but that's not necessarily so at Spire Federal Credit Union and Lending Solutions Inc.
The $593 million credit union began using a customized outbound calling service from LSI to introduce itself to new members and market credit products in June 2007.
"Since then, we've been able to generate a little over $180,000 in loans and it has cost us a little over $18,000," said Dan Schultz, service quality specialist at 61,000-member Spire (www.spire-banking.com).
Spire has been doing business with LSI for some time, mostly in after-hours processing, and decided to go with the outbound calling service instead of paying in-house staff for the after-hours and weekend work required to reliably get hold of members at home.
In one of the programs, welcome phone calls are placed at 30 days after account opening and sales calls at 90 days. Schultz said that approach was particularly effective in creating a relationship with members who joined through indirect auto loans.
"We cover a big area–Minnesota and Wisconsin–and although most of our branches are in the Twin Cities, a lot of our indirects don't really know us that well since we don't have that much market share," Schultz said. "That's why I was really adamant about taking this approach."
He said the outbound calling service also has been particularly effective in garnering leads for the credit union's in-house mortgage staff to follow up on themselves. "They're a little tougher to track, but we have been able to show where they've led to future sales," the Spire staffer said.
Customized outbound calling programs such as that at Spire are handled by about 30 staffers at LSI's National Loan Processing Center, said Jeff Frantz, the Elgin, Ill., company's senior vice president of business development. Another 130 mostly focus on inbound calls.
LSI handles consumer and mortgage lending, electronic lending, indirect underwriting, deposit application and most recently 24/7 member service for about 300 credit unions.
About 30 of those are outbound calling clients, a number Frantz said has "really started picking up," especially in the area of auto loan recapture.
"We're seeing a real big interest there," he said. "Your best credit unions only finance roughly 20% of their members' car purchases. The other 80% are cash or at another financial institution.
"What our clients do is find out from credit bureau monitoring which loans have been financed elsewhere and send us that list and we'll make calls offering to convert the loan back to their credit union at a better interest rate," he said. "And that typically comes with half the reserve acquisition cost that a credit union may have to pay a dealership."
Satisfied with the results so far, Schultz said Spire now is rolling out a new program that identifies members who have loans currently paid by ACH transfers that are paying off in three months or less.
"We'll take an approach that, 'You know, you've been able to live without that $300 a month you've been paying for that car loan, how about rolling that into additional savings? Or it could be a new checking product or maybe another car loan,'" Schultz said.
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