What I Learned from The CU Skeptic on Innovation

In a recent podcast, Tim McAlpine of Currency Marketing posted a great interview with the enigmatic and infamous, CU Skeptic. I love the Skeptic, he always manages to get me thinking about things from a different angle.

During the interview, the topic of innovation was brought up. The Skeptic brought up the fact that some things that are hailed as innovative, like the bankerspank Bank Vs. CU videos and Filene's "save the change" style account, are a bit less progressive than we'd like to think. He also noted a significant disconnect between the innovations being talked about online and what he saw at his local CU.

A couple of great points the Skeptic made:

• True innovation is coming up with something brand new, not altering something that has already been done.
• Innovation is a product of looking to the community you serve and addressing a specific need in a new way.
• Credit Unions have the agility to see things on a local level and provide solutions that are relevant to their local demographic.

I've always thought that credit unions have a built-in advantage when it comes to innovation. We have the ability to know our members and what they want better than any national bank. It is a matter of embracing your membership, getting to know them, and being creative with your approach to the information they provide.

Look around your credit union. Look at what is going on in the environment within which you operate. Look for the positives, the negatives, the problems, and the solutions. Somewhere out there is an issue that can be best addressed by your credit union. Find that something, embrace it, and run with it.

Questions for the Weekend

The member experience is more important now than ever before. With the rise of social networks and instant communication, people pass knowledge and opinions faster than ever before. What people say about you, and how they view your institution can make a larger impact on growth than was ever thought possible.

So, I'd like to put forward a quick list of questions to ask yourself over the weekend (don't think about it too hard, I mean come on, its the weekend).

Do your members love you?

When they enter the branch, do they feel like they are visiting family, or like they are a faceless number?

Do your products add value to their life?

If your credit union disappeared would people be upset, or move on to someplace else without looking back?

Is your lobby someplace people are comfortable, or are they only there because they have to be?

Do prospective members feel like they are being helped, or tricked?

When a member walks out of the branch, do they feel like they have been helped, or merely serviced?

If you answered negatively on any of these, what could you do to change it?

Fresh Powder and Innovative Products

Sunday was a good day. I spent it snowboarding at Shawnee Peak, a great little mountain in Bridgeton Maine. The snow conditions were perfect despite a heavy bout of freezing rain the week before.

My brain is in metaphor mode 90% of the time, so it was inevitable that I'd find something about snowboarding that I could relate to marketing and credit unions.

This time I'd like to relate the thought process of releasing a new, innovative, and inherently risky product to the thought process of launching off a kicker (jump) on the slope.

The Approach

The approach is all about planning. What am I going to do when I reach the end of this ramp? What will I do while in the air, how fast do I need to be going to clear the gap, Which edge should I be on just before I hit the ramp, is this something I can pull off?

When considering a new product, plan, plan, plan. What is going to happen when we reach the launch date? What is the purpose of the product, what problems does it address, what problems does it create, when is the timing right to release it, how do we market it, is this something we can pull off?

The Point of No Return

When I reach the end of that kicker; when the tip of my board has already gone over the edge, there's no stopping. From that point on its all about commitment. Once I leave the ramp, if I'm not committed to pulling off what I intended, I'm probably going to eat some powder. The more risky the maneuver, the more important commitment is.

This is when everything is set in motion for your new product. It is when all the planning is finished, the pieces are in place, and your ready to reveal the new (and hopefully, improved) product to your field of membership. It all comes down to commitment. If you go into a launch half believing it will fail, you wont be giving the product the attention it deserves or the spotlight it needs for it to succeed. The riskier the innovation, the more commitment it takes to see it become a trademark of your brand.

The Launch

Its time to execute all those plans. I've now left the ramp and am freely flying through the air (by the way, if you've never experienced catching some air...give it a try. Its the freest feeling I've ever experienced). Grab the board, complete the rotation, execute every aspect of your plan to the best of your ability. Spot your landing and get squared off.

Its time to follow through. Take all that planning and execute. Launch the product and marketing. Put it in the spotlight. Draw peoples' eyes to it. Pull off all that planning as well as you can. Get the structure of the product or service set up and prepare to hit the ground running.

Stick the Landing

Now I've got myself squared off and pointed down the hill. I'm ready to hit the landing ramp, stomp the board to the snow and continue carving down the hill; making adjustments to stay upright.

Now your new product is out there, structured, and ready for use. Its time to come down from the creative process, hit the ground running with marketing, and maintain support. Now is the time to collect feedback and make adjustments to keep the product relevant and geared toward the members' needs and wants.

I leave you with this humorous snowboarding clip.

Misadventures in Online Money Management

I am a terrible budgeter. I usually don't have a clue where the money goes from my paycheck.

I know, I know, "Don't you work at a credit union? You should be an expert!" We all know that sometimes its hard to practice what you preach.

So, the past week I've been giving several online money management solutions a try. These include Wesebe, Mint, and Expensr.

I'm disappointed to say that I didn't find a single one that truly serves my needs as a credit union member.

I'll start with Wesebe.

Getting into an account with Wesebe is initially very easy. The big draw for me was the community aspect of Wesebe. You can tag your transactions and Wesebe will match you with advice from other users on how to save money. It seems like a great system that could help me save a lot every month.

Wesebe also includes a pretty slick mobile interface to actively update your account from a web-enabled mobile phone.

Unfortunately I hit a huge snag when actually trying to upload my account from Maine State Credit Union.

First, MSCU was not listed as a supported financial institution. Fortunately Wesebe makes it easy to manually add your institution to the list.

Second, and this is where I hit a huge road block, MSCU (like many other financial institutions) provides e-statements in the form of a PDF file. Wesebe only supports several file formats associated with Quicken and Microsoft Money (OFX, QFX, QIF, and OFC).

I sent an email to customer support and received this answer:

"Unfortunately, we don't have a way yet to read .pdf files or to convert them into machine-readable form. This is certainly something we'd ideally like to have, but it may be difficult to achieve, since many banks add formatting and design elements that make the .pdf hard to parse."

They also offered to see if there was any way they could help set up the account, but at this point as a consumer I would have abandoned the attempt and moved on. I'll continue to try and get it set up so I can talk about it more in the future.

Next I moved on to Mint.

Mint seems awesome. The fact that it automatically updates the account by pulling transaction info nightly is great I think it is one of the big advantages Mint has over Wesebe (which requires manual upload of transactions). Though, Mint does not have a mobile version of its site available.

Mint also has some social aspects to it as well. It will match up "custom" advice based on your current spending habits. The only annoying thing I found was that it will also try to suggest moving your money to other financial institutions. As a consumer, I'd like to see a higher interest rate on my savings, but it seems a bit like they are pushing a product at me. Also, as an employee of a financial institution it worries me that they are suggesting members move their accounts away from the credit union.

Once again though, I hit an impasse when trying to establish a connection with my Maine State Credit Union account. With mint I wasn't even able to add my institution to the list. I had to send an email to the support staff and received a message back:

"Thank you for requesting that we add your financial institution or financial product to our list of financial institutions we support. As we have to work with our provider to add financial institutions to the system, we did want to advise that it may take time to get your financial institution added & that all requests are based on the frequency of requests we get for a particular institution (small, localized banks and credit unions may take longer). If we are able to add your bank to our system, we will attempt to contact you via email."

Once again, as a consumer I probably would have given up and moved on to look for a different solution. I'll continue to try and work with them and report back on the progress.

Finally, I looked at expensr.

I found expensr while looking into this years Finovate Startup in San Fran. This program was the easiest set up of the group. Its as easy as signing up for an email account. It is a pretty basic finance tracking program though.

Expensr does allow you to upload a statement, similar to wesebe, but the upload screen is more difficult to navigate to. Also, the same file format issues arise. Fortunately Expensr make it easy to manually enter a starting balance and transactions. It is a bit of a chore to do everything manually, but at least it works.

Expensr also includes a tagging feature that allows you to easily see where your cash is going and how you compare to other users based on sex, age, and other demographical indicators. Unfortunately most of the information based on these tags is along the lines of interesting trivia like, "did you know that people in their thirties are the biggest spenders on housing?" Interesting, but not exactly something that's going to help me save money.

Expensr also includes a nice little mobile version to update the transactions from you phone. Which is pretty much a must for me.

The Bottom Line?

As a credit union member it is difficult to get the big guys to play. It is a struggle just to get Mint and Wesebe set up for a credit union. Expensr is easier to set up at the expense of some functionality and a community aspect that is slightly less robust than Wesebe or Mint. I'll continue to work with all three in an effort to get a real feeling for their programs and customer support.

If you are tired of buying expensive accounting software like Quicken or Microsoft Money, one of these could do the trick for free. Offering a money management solution (something like Digital Insights Personal FinanceWorks) with your home banking might just be a way to stand out amongst the competition and connect with your members's needs.

What's the Big Idea

How many times have you been sitting around with a few friends and this line gets thrown out, "So, I had an idea for a business."

I don't know about you, but it happens to me all the time.

For the past couple weeks I've been helping out on an i3 project called "What's the Big Idea" by creating the slideshow for the pilot.

The concept is pretty simple. The business-starting hopefuls log-on to their credit union's web site. From there, they access the "What's the Big Idea" evaluation tool. Then they fill out a form and a couple pages of questions. At the end of the process they are judged on the readiness of their business plan and then given links to help get their business plan to where it needs to be.

The purpose of the program is to address a growing number of baby boomers who are starting small businesses after retirement. Research shows that credit unions already have a large
portion of baby boomers as members.

The research also shows that business accounts can be a great way to build relationships with members as well as being profitable.

	Retail	Business
Average Balance	$2,307	$7,422
Account profit	$72	$268
Services per household	2.79	3.59

*source: Raddon Financial Group

Mazuma Credit Union is piloting the program with a reality based contest. Once the readiness evaluation form is filled out, your business idea is judged by a panel of business members from the credit union. The winner of the contest receives $3000 to spend on marketing.

Not only does this program have the potential to pull in a lot of these post retiree entrepreneurs, but it could also be a great tool for older Gen-Y members coming out of college and looking to start their own business.

Nearly every time I get together with a group of friends, somebody starts a conversation about a business idea they've had. Just last week we were talking about starting a breakfast take-out here in Augusta.

This program could potentially pull in a large group of new members from many demographics as well as bolster existing relationships. It is a great example of credit unions being a source for information and help. It can say "hey, if you have an idea, we'll help you make it real". In today's world of banks that shy away from business lending something like this can be a big difference between your credit union and the bank down the street.

A Genuine Advocate

This video was posted to twitter, and it got me thinking...

How is it that ads like this end up getting made? I'm sure they started working on the ad with the intention of showing how interesting the game design field can be. How did it go from a good concept with potential to...this?

Traditionally Marketing is done from the top down.

Marketing comes up with a message they want to deliver. In this case, that game design can be fun, rewarding, and a fulfilling career choice and that this is the school you should attend to get there.

Then they decide how to portray that message. They try and create a scripted experience of somebody who has completed the program and started his career in game design.

The intended message filters down through executives, consultants, legal...etc.

Eventually we end up with this diluted ad that is not representative at all of the game design field. The scripted experience fails to convey the message they originally intended because most of the true experience is lost in the process.

Unless I've got a graduate of the school sitting next to me while watching the ad and telling me the school rocks, I'm going to dismiss it as another shoddy plug.

How would this ad be different if it was created with the experience first?

What if it was created by the guy sitting next to me telling me the school rocks? What if he loved the school so much that he decided to make a YouTube video about his experience there.

It's what I'd term "bottom-up marketing"; start with the experience and arrive at the message. It is one of the key traits of user created content and social media and the reason it has potential for incredible success.

When you allow somebody who has experienced a product to express their opinion to others, it is better than any 30 second TV spot. Advertisements can make me laugh, entertain me, or annoy me; a genuine advocate can change my mind.

Friday Ramblings: A Gen Y Anthem

There's something I have to admit...I am addicted to music. From classical to metal and everything in between. If I'm not listening to it or playing it, I'm probably thinking about listening to or playing it.

So, once again, I've found some lyrics that I love and think apply to this blog and what I'm doing here at Maine State CU. The first time I heard this song it was actually playing over the speakers in the lobby while I was on the teller line. It's titled "Waiting on the World to Change" by John Mayer.

It's not exactly an unknown song, but It expresses the way a lot of Generation Y views the world.

"Waiting On The World To Change"
Me and all my friends
We're all misunderstood
They say we stand for nothing and
There's no way we ever could

Now we see everything that's going wrong
With the world and those who lead it
We just feel like we don't have the means
To rise above and beat it

So we keep waiting
Waiting on the world to change
We keep on waiting
Waiting on the world to change
It's hard to beat the system
When we're standing at a distance
So we keep waiting
Waiting on the world to change

Now if we had the power
To bring our neighbors home from war
They would have never missed a Christmas
No more ribbons on their door
And when you trust your television
What you get is what you got
Cause when they own the information, oh
They can bend it all they want

That's why we're waiting
Waiting on the world to change
We keep on waiting
Waiting on the world to change

It's not that we don't care,
We just know that the fight ain't fair
So we keep on waiting
Waiting on the world to change

And we're still waiting
Waiting on the world to change
We keep on waiting waiting on the world to change
One day our generation
Is gonna rule the population

So we keep on waiting
Waiting on the world to change
We keep on waiting
Waiting on the world to change

I hope you all have a killer weekend! Drive safe and buckle up!

Movie Theater Syndrome

A few nights ago my girlfriend and I went to see National Treasure 2 (which was surprisingly decent). So, we got our tickets and went to get some popcorn and soda. On the wall behind the counter was a menu with combo's of soda, popcorn, and candy...but no prices.

So, we decided to share a popcorn and get a couple of soda's. We asked the cashier, "how much is the #2 combo?" The answer nearly knocked me over, "it's 17 dollars". Wh-wha-what!?

To me this just seams like poor business practice.

Here's how I see it. Somebody in an office at theater HQ decided it would be a great idea to raise the prices a bit on concession at the theater because, well, "people are going to buy it no matter what".

This little plan backfires as more and more people (like me) sneak food in from Walmart because we refuse to pay 5 bucks for a medium soda.

The same guy at HQ panics as profits from concession begin to fall again. In an effort to keep profits up while customers are down, they raise the price again. Less and less people buy their movie eats at the theater itself, and the prices keep rising in an effort to keep profits up.

On, and on and on...Until I now have to fork over $17 for a couple medium sodas and a popcorn. Needless to say, we got a water and moved on.

And they wonder why theater attendance is down...

What does this have to do with credit unions you might ask?

Aside from the fact that we might have to start offering small loans to buy food at the movies, its a great example of a pitfall we want to avoid.

Unfortunately membership growth at most credit unions is pretty stagnant and margins are crunching. Its easy to get caught up in this thinking. If new people aren't coming in, and the people we have aren't making us the money we want, we could just charge people a bit more and get back some of that profit in the form of fees.

In my opinion that is counter productive to the growth you'd like to see. Adding a new fee or raising an existing one is just a temporary patch on a much bigger issue. If anything, raising the cost of having an account is going to drive more people away.

Just like raising the prices of food at the theater, it might hide the symptoms for a bit, but then what? Where do you take it once profit levels off again?

The rise in fees creates an illusion, it tricks the numbers into showing you what you want: an increase in profit. Once they get out of hand (like 17 bucks for a couple sodas) you're in trouble. The people that were making you that profit on fees will start looking for other places to put their money.

Thinking Outside the Box: Creating Relationships Through Promotions.

Here at Maine State CU we recently decided to bring a lot of the marketing under internal direction. We had the first meeting of our Internal Marketing Committee last week, and as far as I'm concerned it went pretty well.

The only thing I noticed was that most of the ideas that were brought to the table were very traditional and orthodox marketing initiatives.

We were discussing the possibility of a President's day auto loan promotion. We ended up deciding that the best thing to do would be to just promote our indirect lending.

I Would have disagreed, but to be honest I'm still getting used to the fact that my opinion has an impact on what we do here.

The usual rate promotions, or promoting something like indirect lending (which I whole heartedly dislike, but that's a topic for another post) aren't going to change peoples' minds about the credit union or get them to decide to go with us instead of a bank.

My point is, we need to think outside the box if we're going to bring in new members with a promotion. It takes something that Bank of America can't or doesn't offer.

Offer the membership something that they find relevant locally and makes them feel like they are part of the community. It could even be something that makes them feel like they are making a difference by taking out that auto loan.

Offer a discount for fuel efficient cars (I know, the "green" loan is becoming something of a staple these days) or a loan that makes a donation to a local charity or cause on every payment. Something that says "I'm part of this" and makes people feel good about taking the loan out at the credit union instead of a bank.

The whole point of a promotion is to get people to look at your institution, try it out, and build a relationship. With Indirect lending its just that, indirect. Being indirect is completely contrary to the credit union's purpose. One of the big differences credit unions should embrace is being very direct, very involved, and very personal.

Indirect lending might get a few people to take out loans with the credit union, but once that loan is paid off, are they going to stick around and keep their accounts here? Most of the people I see come into the credit union through indirect lending don't even know they have opened an account through the process.

If you want to create a relationship with new members, you've got to be working on that direct relationship from the get-go.