Westerly community credit union

Most CUs know they need to sell to survive. But what makes some organizations successful while others struggle to compete?

By all accounts, Forum Credit Union in Indianapolis has enjoyed real success in cross-selling. In cross-sold consumer loans alone, the credit union tripled its revenue in four years, jumping from $5.8 million in 2000 to $18 million in 2004, according to Lone Callahan, assistant vice president of retail delivery.

Callahan credits Forum's success to two significant changes implemented nearly five years ago. First, it adopted a new software program called TAPS?? (Total Account Processing System) Enterprise Lending. Developed by the $835 million asset institution's credit union service organization, Forum Solutions, TAPS automatically underwrites loan applications based on established guidelines and provides both lending- and deposit-related cross-selling recommendations based on members' creditworthiness and their existing relationship at the credit union. The system provides a credit decision within 60 seconds.

With TAPS, says Callahan, the credit union's member service reps save a significant amount of time taking applications. Once they have a member's information in hand, TAPS opens the door to conversations about other products and services.

In addition to handling the initial loan, TAPS checks a member's eligibility for a variety of products and notifies the member service representative when the member qualifies for other loans. With a comprehensive picture of members' financial histories at their fingertips, staff can take the time to consult with members about their finances. Callahan says the system allows staff to approach members as an adviser, offering, "Let us do some research for you and see if we can save you some money.

"It really helps to have that automated process in place," Callahan adds.

Technology, however, is just one part of Forum's success, she says. In addition to TAPS, the credit union has developed a sales culture that emphasizes goal setting, accountability, training, and consistent coaching. "It takes a lot of time and effort to get buy-in from employees and to develop the sales culture."

A winning combination

Good technology and a strong sales culture are key to successful cross-selling, says Pat Bertola, manager of sales development and training at CUNA Mutual Group's St. Louis office. Yet technology is an area where there's room for improvement, she says. "Many credit unions are searching for the right technology to help them. The sales environment is changing, affecting the tools needed for support."

One technology that stands out is customer relationship management (CRM). Although not yet widely used by credit unions, CRM will be an important cross-selling tool, Bertola predicts. CRM does more than track what's already been sold. It develops member relationships. "It's future focused," she says. "It's an opportunity manager. It can track progress toward new business, plan for next steps with a member, track referrals, set appointments, and flag people's calendars."

If, for example, a member will pay off a loan in December, an employee can schedule a reminder to contact the member in November. CRM also provides a way to build and view on-screen a more complete picture of members' financial needs, which can lead to more interactive conversations with members. "If employees ask more relevant, relationship-building questions, they need a system to store the information that they not only can access later but other employees can access, too." Managers also use CRM to coach employees and track their performance.

CRM reflects a change in how credit unions are approaching cross-selling. "People are looking at things more analytically," Bertola explains. "How are people using accounts vs. how many accounts do people have?" In a successful sales culture, the credit union places a higher value on developing relationships with members. "How do you create the next opportunity instead of just reacting to an opportunity that comes up?"

Too often, she says, cross-selling implies the end goal is "the sale." CRM reflects a changing mindset in which the sale is just the beginning. Successful credit unions strive to retain members who not only use the credit union but provide a profitable influence.

"There's a growing realization that this is important to the bottom line," Bertola adds.

Realistic expectations

Dick McConnell, director of marketing for Aftech, Malvern, Pa., says it's important for people to have reasonable expectations of technology. Software can greatly enhance the cross-selling experience, but it can't replace good management practices.

"People buy software and expect it to be like a toaster: Put in the bread, push the button, and out comes toast," McConnell says. "There's work involved in these [cross-selling] products. If they aren't properly implemented, the software doesn't count for much."

It's also important to evaluate performance data that cross-selling software generates, he says. "Any software package that doesn't provide reports letting you know how well your people are doing isn't much of a package."

Aftech introduced its Advantage Cross-Sell software two years ago. The software contains a decision engine and, based on predefined criteria, notifies credit union staff when members are eligible for specific products. Aftech is releasing an enhanced version of the software this year.

Marie Stephens, Aftech product analyst, says the software is flexible and allows credit unions to adapt it to a range of programs. "Every credit union has its own idea of what a successful cross-selling program should be. You have to build it in such a way that it doesn't force people down a certain path."

Building a sales culture

John Sahagian credits a strong sales culture with Baxter Credit Union's successful cross-selling efforts. "We're successful because sales are ingrained in what we do," explains Sahagian, director of sales for the $970 million asset credit union in Vernon Hills, Ill. "When we hire people, we look for sales skills. It's even in the job title: loan salesperson."

Sahagian says consumer loans have been the credit union's "bread and butter" for years, and insurance revenue has grown steadily. A couple of years ago, Sahagian explains, Baxter sold less than $2 million in life and disability premiums. In 2004, it sold $4.5 million.

Several factors are key to Baxter's cross-selling success, says Sahagian, and reflect the institution's sales culture. In addition to hiring salespeople, it's crucial to provide them with good sales, service, and product training. Train them, says Sahagian "not only on the products but on how to truly sell them and how to be persuasive. Make them believers in the product so they can go at it wholeheartedly."

Once he has hired the right staff and provided the right training, Sahagian relies heavily on data tracking their performance. Every day, he provides staff with a month-to-date record of their sales compared with their individual goals for each product line. "They know every day how they're doing compared with their goals."

Baxter's loan sales staff are expected to sell all products, not just push specific lines. "I would rather they sell a fair amount of everything and hone their skills than focus on one product. When they're able to sell all the products well, they'll look more closely at what's best for a particular member."

The credit union encourages and values staff feedback. Recently, says Sahagian, sales of extended warranty products were low, and he turned to staff to find out why. They told him the process was too difficult because it required them to log on to a different computer system and re-enter member data. With that input, Baxter integrated the product into its existing system so staff could quote and issue extended warranty policies directly from the system.

That, he says, is a good example of looking at an existing process and saying, "We're not selling this because the process isn't where it needs to be. Let's integrate it and automate it so there's no excuse not to sell it."

Although incentives are part of Baxter's overall plan (in fact, Sahagian says incentives account for up to 50% of top staff's total compensation), good salespeople are more motivated by the challenge. "I'm a big fan of pay for performance," says Sahagian. But it goes far beyond paying incentives. Recognizing top performance and offering "stretch goals" also are important.

Baxter formed the BCU National Sales Council for its top performers. Staff reaching a certain level of sales performance and maintaining it from January through July become part of the "best of the best." At year's end, they attend a meeting in a "very nice place" says Sahagian. Last year, council members went on a three-day Bahamas cruise. "Throughout the year," he explains, "we say who's on pace to qualify and who isn't. That really drives them."