Strategies and tactics to recruit and grow SEGs for credit unions

1. SEG Development Eric Gagliano MarketMatch SVP, Client Management [email_address] 866-501-2233 x106

3. Today’s Topics Best Practices from CUNA Award Winners Departmental Structure Maximize the “Honeymoon” Speaking the CEO’s Language with ROI Commercial – A New Door into SEGs

5. SEG Acquisition

6. Sean McDonald Director, Business Development & Marketing Liberty Savings Federal Credit Union Jersey City, NJ 2008 SEG Acquisition Process/Tips

9. 

13. There Is No Magic Bullet

21. SEG Penetration

22. Nancy Hutchinson SVP Marketing/Business Development Minnesota Power Employees Credit Union Duluth, MN 2009 SEG Recruitment & Retention

29. Lifestage Marketing

31. “ A SEG must be carefully managed and promoted. Credit unions cannot take for granted that once recruited, a SEG employer will support the needs of the credit union, and that employees will automatically join and use its services.” Nancy Hutchinson SVP Marketing/Business Development Minnesota Power Employees Credit Union “ You have to get involved at every level!”

33. On Boarding

35. “ Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.” - Peter Drucker

37. “ You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.” - Jerry Fritz Sooooo … we can’t do this…

38. What NOT to do…

40. What’s At Stake? “ Only 26% of the average bank's customers will consider it for their next purchase, and few will look to a bank for their investment needs. To improve their cross-sell odds, banks must target online banking and bill pay customers.” Forrester Research 2006

42. Time is of the Essence

43. Internal Promotion Example

44. “ Do what you do so well that they will want to see it again … and bring their friends.” - Walt Disney

45. BAI- 90 Day Window of Opportunity Report

46. The Potential Results…

48. Communication Methods

49. “ Treat every customer as if they sign your paycheck … because they do.” - Unknown

53. One More Case Study Andy Reed Business Development Manager American Airlines Federal Credit Union Forth Worth, TX

55. 1. Car Buying Advocacy Program CUDL

68. Let’s Take A Break…

69. Commercial Products

72. Maryland 119.1% -33.1% DC -37.9% 54.0% What’s going on locally? Business Lending Statistics Source: CUNA Economics & Statistics Dept. All financial data is December 2008. 111 credit unions have outstanding MBLs (23%) 3 credit unions have outstanding MBLs (5%) CUs Banks Total Assets $15.4 Billion $40.2 Billion Market Share/Deposits 11.80% 88.20% Total Business Loans $169 Million $13 Billion Market Share/Biz Lend 1.27% 98.73% Biz Loan as % Assets 1.09% 32.62% 3 yr Change $92 Million (-$7 Billion) CUs Banks Total Assets $6.7 Billion $1.6 Billion Market Share/Deposits 19.62% 80.38% Total Business Loans $2 Million $559 Million Market Share/Biz Lend 0.36% 99.64% Biz Loan as % Assets 0.03% 35.54% 3 yr Change ($-1 Million) $196 Million

75. Arrange for Senior Managers to speak to Small Business groups Form partnerships with local colleges to educate small business owners on lending programs, etc. Establish a “Centers of Influence” program with CPAs and Attorneys Target select trade shows Arrange for CEO presentations to small groups of prospects Create special events to recognize top women, minority business owners and other niche segments Low-Cost Acquisition Tactics

76. More Low-Cost Acquisition Tactics Send white papers/articles to prospects focused on changes/issues in their industry Manage media relationships to gain exposure Join the regional Economic Development Committee

77. Retention Tactics Host Value-added seminars for small businesses (i.e., “How to better market their businesses”) Leverage sponsorships to benefit customers Ask your good customers for referrals Invite spouses of small business customers to event marketing Hold networking breakfasts for customers Utilize in-house Credit Union talent to “educate” customers Learn from your peers . Find out what’s successful and try it in your market.

78. Another Value-Add Idea Premier America Credit Union California & Texas 67,554 Members

81. Business Lending CUSO “ Given the opportunity in the market, we believed a number of credit unions could benefit from offering business services but may not be able to make the necessary investment to build capabilities on their own. Capital limits also played a role, as well as the ability to participate and diversify a commercial loan portfolio among a group of credit unions.” - Doug Fecher CEO Wright-Patt Credit Union Dayton, Ohio “ Given the opportunity in the market, we believed a number of credit unions could benefit from offering business services but may not be able to make the necessary investment to build capabilities on their own. Capital limits also played a role, as well as the ability to participate and diversify a commercial loan portfolio among a group of credit unions.” - Doug Fecher CEO Wright-Patt Credit Union Dayton, Ohio

84. Business Lending CUSO “ If we do not fund a loan, we will educate the borrower on the reasons why and identify the steps they can take to become a stronger credit. If we approve a loan, we will try to provide several lending solutions to the borrower. This level of service distinguishes us and credit unions in the small business market.” - Keith Reed President/COO Cooperative Business Services Dayton, Ohio

86. Business Lending CUSO Results: CUSO was profitable in about 1 year More than $10 Million in outstanding balance within 6 months Servicing 40 Credit Unions ($20 million to $1.4 Billion) PORTFOLIO THROUGH JULY 2009 309 Loans $191,155,295 Avg. Transaction Size: $618,625 Avg. Rate of Return: 6.1943% ‘ 09 Conversion Rate (Appt. to Close): 87.62%

88. Let’s Take a Break…

89. Measurement

90. Speaking the CEO Language ROI

91. Perspective

92. Do YOU create value for your organization?

93. Does your ORGANIZATION value what you do?

94. HOW does your organization value what you do?

99. PLANNING

100. Overview “ In preparing for battle I have always found that plans are useless, but planning is indispensable.” Dwight D. Eisenhower

102. Marketing Expenditures Allocation Advertising is the most widely used promotional tool with public relations almost a quarter of the budget Budget Analysis Allocation of Ad Expenditures Newspapers remain the most important mass medium with $3 out of every $10 Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study

103. TV advertising isn’t getting any better… Base: 133 television advertisers Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study In the past two years, would you say television advertising has become...

104. … and interactive marketing will benefit Base: 102 television advertisers Source: Forrester’s 2006 Joint Association of National Advertisers (ANA) Online Study Now that 1 in 10 households own DVRs, which of the following forms of non-television advertising -- if any -- will you spend MORE on?

105. What is the primary purpose of your credit union’s marketing budget?

107. Average Bank Marketing Budget Expenditures Source: ABA Bank Marketing Survey Report Bank Assets in Millions 2000 2005 $(000) $(000) Less than 25 23 23 25 - 49.9 32 38 50 - 99.9 70 80 100 - 249.9 146 179 250 - 499.9 328 330 500 - 999.9 555 518 1,000 - 4,999 1,507 1,222 5,000 - 24,999 5,279 5370

110. The Center of Power is Different From What You May Think… {And YOU can impact it…}

114. ENGAGING

119. The Marketing Process 1. Market Assessment 2. Competitive Analysis 3. New Product and Offer Creation 12. Media Mix Selection 11.Operational & Systems Planning 17. PR and Internal Comm. 16. Product Pricing and Offer 15. Sales Support 14. Promotions/ Merchandising 13. Marketing Message & Creative 8. Client Understanding & Segmentation 7. Internal Brand Mgmt. 6. Brand management 5. Brand Development 4. Financial Analysis with ROI 20. Measuring Performance & Quality Control 19. Staff and Partner Management 18. Marketing Role Definition 10. Retention and Process Improvement 9. Experience and Service Management Effectively Managing the Twenty Activities of Marketing Developing Marketing Strategy/Planning Defining Brand Strategy/Managing the Brand Understanding and Managing Clients Executing the Marketing Plan Managing the Marketing Function

123. How many checking accounts will I need to generate to pay for the Event Sponsorship ? Hispanic Event Analysis

124. Hispanic Event Analysis

126. Hispanic Event Analysis

132. Projections estimate a 15% increase in 2005 Business Checking Projections

136. What is the lift required on Checking Account Sales to pay for a DVD Player? DVD Checking Offer Analysis

140. Mailed 120,000 Home Equity Pieces and Tested $100 Home Depot Offer Home Equity Direct Mail Analysis

143. Multi Media Campaign Analysis Examine both sales and awareness level changes

144. “ If marketing were easy, we would all be making minimum wage.”

145. OK….now what?

147. Wall Street Journal Report Survey of Fortune 500 Companies What is the most important skill for a CEO to have for the future growth of their organization? Marketing Financial 52% 14%

148. Evolution of Marketing ROI Efforts time Value Returned Emerging Optimizing Strategic

154. The Secret Spend the time. Build a base of planning, gather the information and then simply update your tools.

156. The Secret Become Indispensable Position yourself and the marketing function as a resource contributor versus resource “eater”.

157. Toolkit

162. Eric Gagliano Senior Vice President (866) 501-2233, ext. 106 [email_address] www.MarketMatch.com How to Reach MarketMatch

163. From the MarketMatch Team… Thank You! Feedback welcomed, please email me at: egagliano@marketmatch.com Thank You!