Engage Your Unengaged: The “Weird” Sales Trick That Works [Part 1]

Checking Growth? Let’s Get Real.

Your credit union wants to grow checking. And why not? Historically, having a checking account was a good indication that a member considered your CU as their PFI. It’s always been about growing primacy.

Hold up, primacy? It’s a term to describe how a member views their relationship with your institution. Is their checking account a fallback or forgotten relic of an indirect loan? They don’t deliver primacy.

The member who uses your Bill Pay system monthly, has an active direct deposit, and records numerous debit swipes uses your checking account as their PFI. They are likely also building their savings with you. Members like them are where the majority of your relationship dollars originate.

Today though, people have several accounts across various financial institutions. In fact, the popular High-5 method encourages people to maintain two checking accounts: One for bills, the other for lifestyle expenses. (Sidenote: How are you supporting this practice?)

Regardless of the number of accounts, the gauge to determine primacy is usage and engagement.

Members who regularly use their checking account will look to their institution when they need a loan, such as for a car or mortgage. They also are more likely to stick around for CDs (assuming your rates are competitive) and even investment guidance (especially if they’re aware you have advisors).

So checking is still the key to relationships. The challenge: People have a lot of (good) choices.

Does Your Checking Need Modernizing?

Chances are it’s been a while since your CU updated its checking offerings. Here are two solid indicators it is in need of modernizing:

1. Your “high-interest checking” offers less than .50% interest
2. One of your benefits is a free box of checks (and it’s not for a senior account)

Let’s look at your competition and the overall market, starting with the big banks. Together, they hold 82% of all retail checking accounts. No big deal, right? Just make your checking better and ensure everyone knows. Marketing shouldn’t be an issue, unless…

Five banks: American Express, Capital One, JPMorgan Chase, Citi, and Bank of America – each spent more than $1 billion on advertising and marketing in 2022.

You cannot possibly out-market them. The differentiator must be a combination of your mission and products curated to its goals, with a clear message how you help improve lives tangibly. Only, there’s another threat: Digital banking. Fintechs and “neo Banks” have grown dramatically in the last 5 years.

Fintech Competition

Take Chime. In 2018, they reported $80 million in revenue. During 2023, they brought in 20,000 new accounts per day, totaling 14.5 million accounts and an estimated $3 billion in revenue (much of it through interchange).

With easy to use mobile technology, a free account, no fees, high interest (currently 4%), up to $200 no-interest “spot” for overdrafts, early paycheck, and account openings in 2 minutes or less, who needs anemones?

Ok, returning to the surface, Chime is successfully future-proofing their account holders by attracting younger Millennials and Gen Z’s who couldn’t even explain what a checking account is.

And they’re just one of dozens of digital banking apps available through an easy download from either app store. Each covers an aspect of financial growth, wellness, or education, and does so more effectively than most financial education portals we see.

Growth Through New Ideas

How does your CU compete with these digital-first-and-only competitors? Not to mention their financial backing from VCs and other Wall Street resources.

Mergers and acquisitions? Sure. They can be an important part of your growth strategy. Yet that other credit union (or community bank) isn’t your only, or even most substantial, competition. The players most threatening to your continued success cannot be bought.

Even so, only a small percentage of credit unions have the resources to engage in mergers or acquisitions. It can’t be the best strategy to advance the mission of financial wellness and community empowerment.

Difficult words to hear, sure; my parent’s generation called this “tough love”. The reality may not be easy to face, but it’s essential to recognize, both the competition and challenges faced. Doing things the way you always have, the “traditional” approach, won’t hit the mark moving forward.

The CU Geek in me wants to say something about how the very idea of change is shifting, that we’ve moved from linear to exponential change. Not just of products and services, but of change itself. It’s time to get back to basics: Business 101 – Grow From Within.

Aligning Growth With Expectations & More To Come 

Our follow-up article, Engage Your Engaged: Part 2, will include actionable recommendations and guidance to shift your credit union’s strategy towards the future. Discover how to stop endlessly searching for the next one-and-done member and truly grow from within.

Whether you’re searching for liquidity or loan volume, turning your focus towards the members you already have can help meet or exceed checking, lending, and other strategic goals.