ROCK HILL, S.C. (5/12/08)--Planning for membership growth strategically and budgeting for it are two key components of realizing steady sustainable growth, according to the CEO for Family Trust FCU.
The $205.7 million asset Rock Hill, S.C.-based credit union has had more than 20% growth in membership over the past two years--12.5% in 2006 and 8% to 9% in 2007, Family Trust President/CEO Lee Gardner told News Now
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is introducing its Focus on Growth weekly series of interviews with fast credit union growers this week as part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. The series focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA’s Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. Family Trust plans strategically for growth and also budgets for it, Gardner said. “We want to grow large but feel small,” he explained. “We budget annually for 7%-14% growth. We state this in our strategic plan. It’s a statement to our employees and board of directors to set a target.” Also, Family Trust does not sit on its capital; it spends it, Gardner said. “We have a 9.2% net worth ratio. Some credit unions have 16%-18% capital. Why not spend that money to grow?” he said. It’s also important for a credit union to have a good relationship with its board or directors and have the board be active in the credit union’s strategic planning process, he added. The driving force behind the credit union’s growth is that it has an extremely strong community brand, which helps it build relationships in the community, Gardner said. “It’s hard to differentiate yourself in the market on just products and price anymore,” he explained. “We differentiate by our presence in the community. We do good things in the community, support it and then we publicize what we do.” One mistake that some credit unions make is it they don’t have a differentiation strategy, Gardner said. “Ours is that we are good people, we do good things in the community, we do the right things for our members and our employees,” he said. “You can’t just be good on Sunday and bad during the week.” Family Trust strategically builds its branches, using the “Blue Ocean Strategy” by going into quiet areas, not necessarily “hot spots” where everyone else goes. The credit union looks to build its branches by looking at schools, roads and housing areas, Gardner explained. “We’re opening a branch in September where there are no credit unions, but there is housing there, and it is located about a quarter-mile between two schools,” he said. “We develop the soft spot or gap. We go to where we can develop a value proposition and new business.” Part of Family Trust's growth strategy is to get members while they’re young and develop a long-term relationship with them. About 26% of the credit union’s membership is age 25 or younger, Gardner said. The credit union sponsors a youth week and a weeklong program twice a year called “Real Life, Real Money” in which teens are educated about financial matters. The teens are encouraged to open checking accounts and are familiarized with debit cards, and other financial products and services. “A key to growth is to have a young leader--under age 30--who brings in innovation and perspective to your credit union,” Gardner said. A mistake that some credit unions make is that they don’t have young people in leadership positions to bring in innovation.” Another key facet of the credit union’s growth is the implementation of relationship pricing with member loans and deposits. The more credit union services that members use, the better the interest rates they receive. The rates are based on a formula taking into account a member’s use of checking accounts, debit cards, credit cards, and e-statements (which save the credit union on paper costs). “Our rates are based on services that members use, not just their credit history,” Gardner explained. “This equips our frontline services staff to inform members that they can get a better rate on a loan if they have a Family Trust debit card, credit card or checking account.” Family Trust has been a community credit union since 2000, serving people who live in York County, S.C. It became a community credit union because there were not enough companies in the area to serve on a select employee group basis. “As a community credit union, we can compete at the individual member level rather than the corporate level,” Gardner concluded. Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at CUNAMGTF@cuna.coop