Mining Untapped Gold

Don’t Give Up on Your Inhouse Resources to Reach New Markets in 2023

By Adam Pickett Accelergy Consulting

According to the story, a Maryland man discovered a gold mine in Colorado and raised capital to purchase the necessary machinery to tap its riches. Suddenly, the lucrative treasure disappeared. He spent significant time and resources to relocate the path, but ultimately decided to quit and head back home.

To recoup some of the losses, he sold the equipment to a local junk dealer before venturing back east. Hearing the man’s story, the resourceful junk dealer hired an engineer who analyzed the terrain and determined the gold was just three feet from where the man stopped digging. The result? The junk dealer discovered gold almost exactly where predicted!

Without the proper knowledge and a cohesive strategy, the Maryland man stopped digging ignorant of the fact that the gold was so close. Unfortunately, this same situation is happening at many credit unions across the country.

GOLD LIES WITHIN YOUR MORTGAGE TEAM’S REACH

With the rise in interest rates and the evaporating refinance market, 2023 will likely shock many credit union mortgage teams. Purchase opportunities will be harder to come by and teams must brush off their sales skills to compete in this new environment.

But unlike some financial institutions — such as banks and independent mortgage brokers — credit unions have a rich database of members that are “three feet away” and often haven’t been “mined” when it comes to mortgages.

One executive recently told me that an internal survey of their credit union’s members discovered 60% didn’t even know the organization offered mortgages. Unfortunately, industry penetration rates back up this study. Per data sourced through Callahan & Associates, a random sampling of 93 institutions between $1 billion and $5 billion in assets revealed just 4.6% of members had their first mortgage with their credit union. Even bleaker, a sampling of 101 credit unions between $500 million and $1 billion in assets was even lower at 3.7%.

Simply increasing that figure by one or two percentage points can have a massive impact on achieving your 2023 goals. However, before you start “digging for gold” within your member base, you must have the right strategy in place to ensure all opportunities are captured and tracked.

NO MEMBER LEFT BEHIND

The value of every lead generated is exponentially higher in a challenging market. As you begin to drive mortgage awareness and purchase interest with your members, you must ensure no opportunity identified falls through the cracks.

A marketing firm CEO recently shared that one of her team’s campaigns yielded over 700 digital leads for a credit union mortgage team. However, since there was no proper sales infrastructure or tracking tools in place, few received the proper follow-up, leaving a close rate of 3% or less. Before you crank up your marketing machine, you must have the correct processes and systems in place to manage every lead.

To start, Accelergy always recommends identifying every channel an opportunity may come from, such as branch interactions, marketing campaigns, or online banking. It is important to consider where the lead goes, who it is assigned to and most importantly, how the follow-up process will be managed. This is critical to exceptional member service and closing more loans.

Clearly identifying your process is the critical first step, followed closely by ensuring you are tracking every opportunity generated. Whether you already have a CRM tool in place, or need to create a simple Excel spreadsheet, tracking every deal is crucial to maximizing the value of your marketing spend. Documenting your sales processes and aligning them to the right tracking tools is a dynamic combo that will ensure “no member is left behind” and allow you to begin mining this untapped gold.

TOOT YOUR OWN HORN

My parents always told me, “If you don’t toot your own horn, no one will.” This applies to credit unions as well.

Do your members even know your credit union offers mortgages? Have they been educated on the various loan types available to them, especially as products evolve and new ones emerge? And, as rudimentary as it sounds, do they even know the difference between a credit union and a bank?

Partnering with your marketing team to identify targeted messaging is key to educating your members. Communicating the benefits of your products — regardless of members’ level of knowledge — is a great way to increase awareness while getting potential homebuyers to raise their hands.

Don’t be short-sighted. Marketing should be a 365-days-a-year process to regularly engage members.

EDUCATE AND ACTIVATE YOUR INTERNAL PARTNERS

Your branch and call center partners are on the front lines everyday interacting with members and helping them with their financial needs. Yet all too often, these teammates may not have the proper knowledge or know the right questions to ask during these interactions.

They’ve often had the kitchen sink thrown at them, being overwhelmed with the features, benefits, and subtle nuances of every product offered. The result often is that too little of that information may be retained, which ultimately leads to avoiding conversations about mortgages.

In fact, these partners may not need ANY information about your products. Rather, arming them with the right questions to ask or nuggets of information to look for are key to identifying opportunities. All you want from these team members is to identify and hand off a lead to one of your loan officers.

Don’t assume your loan officers have all the knowledge and tools necessary to be successful in an every-changing market. Even among seasoned team members sales skills may be rusty after two years of the phone ringing off the hook. As for newer loan officers, many of whom were promoted from inside the credit union, they may have never had to sell or deal with competing offers.

First, your teams should be regularly educated on your products and made aware of changes to them in real-time. In addition to features, make sure they know how to position the products to the right target audiences, which is critical in a competitive market.

Second, training on sales skills should be a part of your continuous development strategy. As these facilitations occur you can begin to identify skill gaps and determine which team members need a little more coaching. One-onones are a great way to focus on individual needs in a nonthreatening way.

Finally, building relationships outside your credit union is a crucial source for generating new leads. No different than product knowledge, many team members may need to be educated or reminded how to develop, nurture, and manage referral partners.

GOLD OUTSIDE YOUR MEMBER BASE

Last fall I flew to Greenville, South Carolina, to speak at the Southeast CUREN’s annual conference. During my flight, I learned the couple next to me had owned a brokerage firm with 15 realtors for more than a decade. When our discussion turned to loans, I asked if they worked with any credit unions. To my disappointment, they responded, “We didn’t know credit unions did mortgages!”

According to Stratmor Group data from 2019 — the last full-year before the pandemic — 46% of respondents said their realtor was the most influential factor in selecting their mortgage provider. Yet, like the story I just shared, many agents are unaware credit unions offer home loans, much less understand the unique benefits they can offer their clients.

Whether it was team members overwhelmed by incoming deals, or the lack of networking opportunities during the pandemic, many leaders have not been encouraging their team members to self-source deals through external partners. That needs to change.

Unfortunately, this approach doesn’t magically yield results overnight; it requires time to build trust with referral sources. However, if done the right way, these partnerships can become an invaluable tool to build a steady stream of loans that can have a major impact on production.

2023 IS AN OPPORTUNITY

While there may be rougher waters ahead, credit unions have an opportunity to reset their approach to be positioned for sustained growth in the future. Doing so will take the right mindset from leaders and a cohesive strategy with key partners, but it will ultimately take you the remaining “three feet” needed to reach your own untapped gold.

Adam Pickett is the founder and CEO of Accelergy Consulting, which helps credit unions succed by focusing on critical processes that drive growth. Adam Pickett