Developing Credit Union Business in the Age of COVID

Business development has never been easy, and when the pandemic hit, it became even more challenging. But credit unions have adapted by spotting new consumer trends and finding creative ways to keep their business development pipelines open. What's more, because members are flocking to digital banking, credit unions have been leveraging technology solutions to grow their business development opportunities.

Ted Brown, cofounder of Digital Onboarding Inc. in Boston, said credit unions are essentially sitting on a business development gold mine among their current members, but are not necessarily equipped in the digital age to tap into it. He noted when branch lobbies were closed at the onset of the pandemic, everyone began moving to digital banking, and now that trend seems to be in hyper drive.

"We provide that platform to digitally engage members, providing good recommendations to those members about products and services that the credit union offers, but they may not have been aware of it before," Brown said.

In the spring, for example, the $310 million Alliance Credit Union in Lubbock, Texas used the Digital Onboarding platform to deliver personalized, prequalified, traditional mortgage offers to members who recently applied for mortgages with a competing financial institution. By using Equifax data for less than one dollar per member, the credit union informed those members that they qualified for a mortgage amount in a specific range at the rate Alliance offered during the week they qualified.

Over 30 days, members who applied for mortgages with another financial institution received three personalized emails and two text messages that linked to a personalized web page. When those members applied for a mortgage, the marketing messages stopped.

According to Digital Onboarding, the campaign generated $1,131,493 in mortgage volume within the first 45 days, and for every dollar invested in the Digital Onboarding platform and Equifax data combined, the campaign generated $18 in gross profit.

Brown also noted that when a member opens a new checking account, there is a huge gap in engagement, as 25% to 40% of new accounts are closed within the first year.

"That's the gap we're addressing with our digital onboarding engagement platform, which is taking an account holder and making sure that they truly bank with that institution by adopting direct deposits and mobile banking, and consider all of the other digital products and services," Brown said.

While many credit unions, like the $367 Evergreen Credit Union in Portland, Maine, are making huge technology investments to enhance their digital banking offerings, they have also gotten creative to maintain the personal touch for their business development initiatives.

Evergreen operates a direct lending program with about 100 car dealerships. Staying in touch with them is important so the credit union can stay "top of mind" among car dealers when they work out finance options for their customers.

"We creatively thought of ways that we could engage with our dealerships during COVID," Brenda Pollock, Evergreen's membership development officer, said. "Before COVID, we used to take them to a lot of local hockey games, and we also had a lot of events that we sponsored and hosted with them, which really helped solidify our business model."

To respect everybody's different opinions on safety during the pandemic, Evergreen contacted local restaurants to order carry out meals that the credit union staff, wearing masks, delivered to the car dealerships.

"That was pretty impactful and that's why we were able to see our numbers increase," she said. "Our focus in 2020 was to identify and engage more with the dealerships that we enjoy working with and have very good business models so that they'll turn to us first. I think we were successful in doing that."

Evergreen also serves dealerships that market recreational vehicles and boats. And business is booming.

"We're seeing a spike in sales for a couple of reasons. RVs are a great way for people to quarantine and people are looking at different ways to vacation," Pollock said. "They're not looking at the vacation of going down to Florida and Disney World. But they can take their family in their RV somewhere that is not far from their home and still contain everything within the RV. They have their own food. It's their own safe little bubble."

The credit union has seen a similar trend in boat sales and some of the dealers have already run out of inventory.

The $464 million JAX Federal Credit Union in Jacksonville, Fla., launched a clever marketing campaign in June named "Quarantine on Wheels" for RV loans.

"Coming up with creative ideas that are going to appeal to your target audience has been challenging, but we learned of all of the growth in the RV and camping market, which is something I knew about because I have been camping my whole life," Angela Coleman, chief marketing officer for JAX, said.

The "quarantine on wheels" concept encourages people to take a safe vacation in an RV. "People were turning to RVs to save their summer travel plans from the coronavirus," she said. "We really thought this would resonate with our members. Florida is really a great place to make an investment in an RV because we have great weather here year-round."

In addition to its online and email marketing initiatives to promote the RV loans, Coleman wrote a letter to about 20 RV dealers in the area. She decided to mail the letter so that it would stand out and grab the attention of dealers. After all, not many businesses are using letters to sell anything, she noted.

"I just wrote a friendly little letter saying, 'I hope you and your staff and family are staying safe and healthy. I'm just reaching out to let you know that JAX Federal offers RV and camper financing as an additional option for your customers and let them know that we're easy to work with,'" Coleman said. "Within days of drafting this letter, I had a phone call from Camping World [a franchise] that they wanted to meet with someone to get started with our loan offerings for all of their area stores. How often do you get such instant gratification? It was awesome."

The $605 million Sun Federal Credit Union in Maumee, Ohio serves about 320 Select Employer Groups in the Buckeye State and Pennsylvania.

"When both states decided to shut down right away, we were unable to visit SEGs and a lot of our bread and butter for growth comes from the outreach to our SEGs from our business development team," Dave Wilde, vice president of marketing and business development for Sun FCU, said. "For a short period of time, we weren't going out to SEGs so we had to pivot. We have a strong presence in the health care and transportation markets, so for those two groups the business development team set up a hotline number for employees, SEGs and HR folks to call us directly when they need any information or assistance."

The credit union held Zoom conferences to develop relationships, which Wilde acknowledged was challenging and an interesting learning process.

"When you're doing these Zoom conferences, setting the expectations for the persons on the other end of the Zoom meeting in advance has become really important," Wilde explained. "For example, letting them know how to access Zoom, all the things that they'll need and reminding them to make sure they turn on their camera."

It's also important to let people know what topics you want to cover and make the Zoom conference as short as possible so that people don't get antsy, he added.

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