Top 4 Hazards Your Credit Union Needs To Avoid Now

COVID-19 is one of the biggest challenges of our time. The pandemic’s health threat and death rate are the likes of which we have not seen in generations. And of course we are likely to feel the economic impact of the virus for months if not years.

Credit unions are currently faced with numerous challenges: Closing lobbies, adjusting hours and working remotely to name a few internal issues. From the external side there is the threat of lower loan demand, increased delinquencies and falling net income.

We are certainly on a ride – and a bumpy one at that – for several months to come. And as with any car ride, there are also several road hazards to avoid in the current economic climate. There are many wrong turns we can make. These are not potential hazards: They are ones we must avoid now.

In addition to the above obvious issues, there are four hazards credit unions need to elude as we prepare for an economic downturn:

Missing Opportunities

One of the best strategic questions you can ask now is, “What does the collective downturn open up as an opportunity for our situation?” Or as Winston Churchill said, “Don’t let a good crisis go to waste.” There are opportunities in the marketplace: Advertising is going to cost less so your marketing dollars can go farther, good people are losing their jobs so you can scoop up top talent and some financial institutions are primed for mergers so you can potentially grow through an acquisition. The key is not sitting back passively but rather to aggressively seek ways to turn this negative into your positive.

Cutting Your Marketing and Branding

When the economy slows, the first reaction is to cut, cut and cut (especially in marketing). However, the goal now is to generate revenue for your financial institution. For your credit union to generate revenue, consumers have to know and use your products and services. And the only way that happens is through your marketing messages. Clear and connected marketing messages will generate more revenue. While others zig by cutting marketing you should zag by investing in your brand.

Pausing Training

Once marketing is cut, then the budget knife often gets turned to training. But as Steven Covey, author of “Seven Habits of Highly Effective People” said, “If you have to cut things out and you cut just training and development, you kill the goose that lays the golden egg; for a short term period you improve profits. But then you’ve liquidated the human resources, the trust inside the culture and the voice of people in order to have a short term benefit; in the long run you have to live with the consequences of a dead goose.” Many of your employees are either working remotely or with a skeleton crew. Turn this slower period into a learning time for your staff.

Stopping Planning

One of the major traps now is that we sacrifice the long term for the short term. If you want to grow through the downturn then you better have a plan to do so (and remember, hope is not a strategy). When talking with one of our clients about their upcoming strategic planning session, Helen Delin, CEO of NAS JRB Credit Union, said, “We believe these trying times will pass and the best way to prepare for growth post-virus is by making sound investments in areas like strategic planning now. This should help position us ahead of the curve when this cloud passes and the economy begins to regain its footing.”

One practical step you could take now is to hold a virtual strategic planning update session with a facilitator. Gather your key players via Zoom and recreate that strategy document you drafted in the fall. Now is the time to revise your strategies and pivot your tactics.

Don’t hit pause on growth. When you pause your marketing, your training and your planning, you pause growth. Rather than losing revenue during the downturn, your credit union can actually make money and thrive. And it starts with a growth strategy.

Mark Arnold is Founder and CEO of On the Mark Strategies, a speaking, branding and strategic planning firm based in Carrollton, Texas.