Skeptic 2.0

I don’t know whether it was the great conversation that was getting started, the blinding lights on stage, or the sweet smell of Ron Shevlin, but I hopped off stage last Thursday without addressing Skeptic 2.0. Well let’s get into it now.

Objective #1: Keep writing and write more

The attitude around my unveiling has reinforced my resolve to make this blog happen, even without anonymity. I’d like to post once a week which would double my pace from last year. This industry has never left me short of topics, it’s time to start taking on more of them.

Objective #2: Allow you to unleash your inner Skeptic

I’ve already posted one and been approach by another member of the CU community that would like to post a guest article under a veil of anonymity. I wanted to make this kind of sharing easier and more anonymous so I setup a form over at Your Inner Skeptic for just this type of submission. I look forward to helping you share your observations with the CU world.

Objective #3: Start changing this thing from the inside out

I’m looking for a credit union to join. More than that, I’m looking for a credit union to join and a board to run for. More than that, I’m looking for others that want to do the same. (Or have already done the same.)

If you want me at your CU, or on your Board, let me know.

If you’ve been considering something similar and are ready to get this thing rolling, let me know.

If you’re on a board and reading this…well hi Ginny…any advice?

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I told you this was only the beginning….

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Presentation Reflection

First up, I promised the slides so here they are. Not sure how much they’ll help: 2008_symposium_skeptic_pdf

Also the links to the Filene Research I referenced: Employee Perceptions of Credit Unions and Why Choose a Credit Union? An Ethnographic Study of Member Behaviour

A few other notes, appologies, etc after watching the video myself:

  • I referred to the second Filene Research Study (Why Choose a CU) as “recent” when in fact it was released in September….2007. I sincerely apologize for the inaccuracy. It’s still fairly recent as far as research goes.
  • In the same vein, I casually referred to George Hofheimer as ‘George.’ The Chief Research Officer at Filene probably deserves a little more respect from someone he’s never met. Once again, sincerest apologies.
  • There are a few times I used the word bank when I meant credit union. Sometimes even my mouth doesn’t know the difference. 😉

Feel free to email me any other criticisms you wish or, if it’s something you think is worth a public lashing, go ahead and let me have it in the comments.

Thanks again to Doug True and Forum Solutions for inviting me to share my message. Also thanks to everyone who has sent positive tweets, blog posts, and comments my way.

Kum-ba-ya Over. 😉

I have a real name ;)

These last few days have worn me out, but I just wanted to say thank you to everyone who made the Reveal at the Partnership Symposium be a truly great experience.

In case you missed it, you can find it here: http://www.ustream.tv/recorded/757734

I’ll have the slides up (with sources) by Monday morning!

Thanks again, and don’t worry, this isn’t the end. I’m just getting started.

Why MyLifeMyMoney is great for the CU Industry (And possibly even better for Currency Marketing)

There is a lot of talk about the rip off job Resource One’s MyLifeMyMoney campaign did on Currency Marketing’s Young & Free efforts which are live in Alberta and Texas. It has created quite the buzz around the CU blogosphere and in case you’ve been living under a rock, you can go here and here to catchup with all the happenings.

My Take: This is exactly what the CU industry needs to better understand how to reach Gen Y

Yes. Anyone blessed with sight can easily tell a quality difference between what Currency Marketing is rolling with and what Resource One has put out there. It’s honestly pretty sad if you put the two side by side. But beyond aesthetics, this campaign has the opportunity to offer a ton of insight into many questions out there about this type of campaign (Some of these I now realize where even asked by Jeffry Pilcher in his post breaking this story.):

  • Does the quality of the spokester search campaign effect the quality of applicants?
  • Is the spokester more important than the infrastructure?
  • Is a part timer (MLMM) more or less effective than a full timer (Y&F)?
  • How much traditional media is needed to accompany one of these campaigns?
  • Is a 200k* budget required to effectively reach out to and participate with Gen Y?

From strictly an industry perspective, you should be rooting for this campaign to work. You want to think that you don’t need hundreds of thousands of dollars to be relevant to Gen Y. You want to think that if you can just make a little effort, you can make headway in this space.

Currency Marketing could come out the big winner

As much as it sucks to have your hard work ripped off, if I were at Currency, I would be very excited about how this is currently playing out. If the MLMM campaign is doomed to fail (as everyone predicts), then Young & Free just became a heck of a lot more valuable. Resource One will have provided the case study that participating with Gen Y is no easy task, and just hiring a Gen Y-er and giving them some cool gadgets won’t do the trick. They will have proved that you NEED the experts of Currency Marketing. And that will be 200k*…please pull forward and pay at the first window.

Don’t get me wrong, I definitely feel for what Currency Marketing is going through, but I think it’s a great thing for the industry and could have a huge silver lining for Young & Free.

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* I don’t know what the exact numbers on a Y&F rollout are. They have been mentioned in the hundreds of thousands of dollars by various sources.

Pie in the Sky: Hey Boss!

In talking about Members’ Economic Participation, it’s clear that “owner” is a term that can be used to describe CU members. I wonder what would happen if your CU started calling everyone that came through the door “Boss.” It would be like the affectionate nickname you have for your members. “Hey Boss, what can I do for you today?” 🙂

If you don’t think calling everyone “Boss” is a great idea, you could change your “Thanks for coming in/calling today. Have a nice day” to “Thanks for exercising your ownership. Have a nice day.

Don’t think these things matter? Every time I walk into Chick-fil-a, receive my order, and say “thank you” I am met with the best reply in fast food today. “My pleasure.” I notice. I’m not the only one.

If reinforcing ownership is on your radar, the subtle things you say can make a world of difference.

Principle #3: Members’ Economic Participation

Members are the owners. As such they contribute to, and democratically control, the capital of the cooperative. This benefits members in proportion to the transactions with the cooperative rather than on the capital invested.

For credit unions, which typically offer better rates, fees and service than for-profit financial institutions, members recognize benefits in proportion to the extent of their financial transactions and general usage.

Finally! Let’s start talking about money. (Cleverly disguised here as “economic participation.”) This principle is loaded with info, so let’s take it apart and look at the pieces.

Members are the owners.

While there is much debate over what an individual credit union should call those that participate (member, owner, customer), it’s very clear that “owner” is a term that is appropriate. (Though I believe thinking of participates as “customers” is the more effective, there are those much more experience than I that would choose the word “owner”)

The word “owner” implies both authority and responsibility but unfortunately these seem to be lost on the CU member of today.

They contribute to the capital of the cooperative. (And democratically control that capital.)

Members fund the CU and through democratic process control those funds. (In modern times democratic control = voting on a Board who controls the funds.) Yes, your $50 deposit is funding the credit union. This principle really doesn’t address other forms of funding (profits from CUSOs, external funding).

They recognize benefits in proportion to the extent of their financial transactions and general usage.

I like this part. Members get benefits! And low and behold, it’s based proportionally on participation. So the more you put into the CU (through financial transactions and general usage) the more you get out of it. All seems rather sound and fair.

This currently plays out in dividends paid out to members and contributes to the ability to set rates, but this principle alone doesn’t limit these benefits to these two use cases.

The unnecessary editorial

For credit unions, which typically offer better rates, fees and service than for-profit financial institutions,…

I have a hard time understanding this as part of the principle. My first thought is that it probably isn’t part of the original, but some how has been inserted in over time and just been duplicated and copied so many times that you rarely find a list that doesn’t include it. Maybe it’s just an example of how members can benefit from their financial funding.

I hope that some part of the above is true, because if it IS part of this underlying principle, if CUs were built on the principle of providing better rates, better fees, and better service, well then it could be the biggest disconnect from credit union philosophy and credit union practice that we’ve looked at so far. (What the heck is a ‘better’ fee anyways?)

I’d be very interested in hearing from anyone that has any insight into this part of the principle.

Back to You

What do you think about the different pieces of Members’ Economic Participation? How do they play out in your credit union? If you could start from scratch, would you want this principle manifested in it’s current practices?

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Just getting into my look at the 7 cooperative principles? You can check out the other articles in the series here.

Pie in the Sky: One member. One vote.

It’s already been alluded to in the comments on my post on Democratic Membership, but wouldn’t it be ground breaking to actually give each member a vote…..on everything.

Given the current state of technology, there is no reason why any presentation or information available to the Board, couldn’t be readily available to each member in a timely fashion and the same goes for any vote. Votes could be taken electronically and results posted very quickly. I’d even suggest making terms of membership reflect a certain “attendance rate” for votes as a requirement.

Would it work for every CU? Heck no. (Areas where internet access isn’t the standard would surely be wrong for it.) Would it work for some CU? I’d like to think so.

A Guest Rant

I was sent this post by a member of the CU community that didn’t feel comfortable having it appear on his/her personal blog. I totally understand wanting to say things that need to be said, but not wanting those things always tied to your personal persona, so I’m always happy to publish anything you want said in total annoyminity. Here we go…..

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The first step in solving a problem is admitting that there is a problem. In credit union land, this realization has simply not been made.

The world of auto sales is a perfect indicator of this point. When the economy tightens, guess what auto dealers do? They cut prices. They improve interest rates. They do everything they can to make their products more attractive. After all, “waiting this economy out” is not an option for them. Even Honda and Toyota, the two most attractive automakers of our time, are offering 0-2% financing and huge rebates (or employee pricing).

What do credit unions do in tough economic times? We move mountains to decrease our cost of funds. We make it tougher to get loans. We become less attractive when our members need them most. We become an equally bad deal as banks, when we should be scrambling to take advantage of the opening banks are giving us.

Yeah, I know. I’m comparing apples to oranges, right? Maybe.

Consider wages, then. In 2007, total compensation for CU executives rose 7.7%. Assets from December 2006 to June 2007 grew only 4.3%. Is this in line with what the rest of America is experiencing? Hardly. Earnings increased only 1.1% for all workers in the U.S. economy.

This is not to say credit union executives are overpaid. I truly believe that in many cases the opposite is true. What is startling, however, is that our behavior communicates to the public that we are isolated from the struggles they are facing. While they are facing layoffs, hiring freezes, and pitiful pay increases, we are giving financial high fives to way too many executives who simply aren’t performing.

We say we want to start attracting younger members and employees, but have we changed our approach to either? Hardly. I have seen precious few examples of true innovation in our industry that would excite anyone under the age of 45. We are not recruiting on college campuses. We are not attracting elite employees. We aren’t putting our money where our mouth is when it comes to investing in innovation.

Peer-to-peer lending? Give me a break! Taking a cut out of an over-priced peer-to-peer lending transaction is not peer-to-peer lending. Blogs? Let’s face facts, that’s not innovation. Turning teller lines into pods? Wow, no bank could ever pull that off.

And why do credit unions think that “best practices” are the answer to all of our woes? Best practices are simply proven strategies for other credit unions. If you are waiting to act on an idea until a best practices report comes out, you are part of the problem not part of the solution. Want to convert into a bank? Good riddance. We didn’t want you any way. And if bank conversion is what’s truly best for your members, why should the movement stop you? Isn’t that what we’re in business to do?

How often do we truly cooperate with one another? No, seriously. How often? Being chummy at a conference doesn’t count. I can count on my right hand (and right now it is on my keyboard’s home row) how many times in the last year credit unions have come together to meet a specific, or even general, member need. Where are our solutions to high energy prices? What are we doing to help folks cope with, or better yet avoid, foreclosure or bankruptcy? The truth is we don’t cooperate unless there’s something in it for us, or it’s a community service project.

We’ll blame regulators or ALM or “the economy”, but in all actuality the riskier (read: more needy) a member is the less likely we are to help them out. “Not-for-profit” should not mean “for charity”, I realize. But you and I both know that we are still shutting out an awfully large amount of people. Essentially, we aren’t serving unmet needs. Instead, we are duplicating the efforts of banks and, worse, each other. We’re competitors. Stop pretending we are inter-cooperative until you prove otherwise.

You see. The frustrating thing is not that the credit union philosophy is broken – it most certainly is not. What should piss everyone who loves and believes in the credit union movement is how credit unions have implemented and modernized that philosophy.

We haven’t admitted that we have a problem. So that’s what I’m doing here. We haven’t found a way to increase our paltry share of U.S. deposits. We have yet to convince the majority of Americans that there is a credit union difference. We need new leadership. We need to start being honest with ourselves about what we are and what we are not. And the sooner recapture the greatness of credit unions past, the sooner we can reintroduce ourselves as legitimate players in the modern financial services world.

There. I said it.

(Apologies to the 100 or so credit unions out there that are actually changing with the times. YOU are not the problem. The folks out there that are just now copying the things you did 5 years ago are.)

My guest post on the CU Brand blog…

Do you love Currency Marketing? I know I do. But what if Tim had built his company the credit union way? Would you love them? Would you even know who they are?

Checkout my guest post on the CU Brand Blog (by Currency Marketing): If Currency Marketing were built the Credit Union way.

How Currency Marketing duped the CU world (and what you need to learn from it)

This may sound weird, but I think Tim McAlpine and I have some kind of psychic connection. The other day I was reading some CU blogs, both past and present, thinking about the CU koolaid and how CU people seem to love the thought of people that love their movement. I was thinking of companies that have capitalized on this self involvement and Currency Marketing (and others) immediately came to mind. Not in a “those dirty marketers” way, but in a “wow that is genius” way. Today Tim wrote an article that I believe confirms this thought and it deserves addressing.

What are you even talking about?

Please go read the whole article, but if you don’t here is my favorite quote from the piece:

My decision to limit Currency (and therefore Young & Free) to just credit unions is not entirely about holding hands and believing in a larger movement. It is also about branding. A strong brand needs to be simple, needs to be focussed and needs to stand for something.

Whether credit unions realize it or not, many CU exclusive vendors are exclusive not because they believe that the CU way is right or better than the bank way, they simply believe it strengthens their brand. Now in order to have a strong CU exclusive brand, you have to sell out to the CU way, but I believe that the brand commitment comes first, and the movement commitment second. Credit unions just love to hear people blow their “movement” trumpet so much, that for the most part I doubt they notice or even care.

The thing is, there’s nothing really that objectionable about choosing a CU exclusive brand and then championing the CU cause to strengthen your brand. In fact, it’s actually a very smart. Not only does Currency Marketing initially differentiate themselves by not serving banks, by getting behind the CU movement and enhancing the thought that Banks are enemy #1, they make their CU exclusive brand even stronger.

What can you learn from the CU exclusivity branding strategy?

What Tim and Currency Marketing have just successfully demonstrated to us is how to work an audience and as a CU you need to pay attention. Not in fear of being taken advantage of (because I don’t believe that’s happening too much) but because it’s how you should be looking at your field of membership and your members!

That’s right, when looking at bringing in new members, you need to take that big ol FOM and cut it down, drastically. I’m not talking about just a targeted campaign. I’m talking about knowing what you want your actual membership to look like and going after that. Next, find out what they like, hate, need, want and then as a CU you need to start liking, hating, needing, and wanting, the same things.

I really want to say “If you build it, they will come” but I can’t be that naive, can I?

I’m glad some people are and wish those that do, both credit unions and vendors continued success! 🙂