2012 Strategic Plan Highlights
Revised 2012 Strategic Plan
The LSCU’s 2012 plan and budget reflects the League’s evolution since consolidation as well as the economic and systematic challenges credit unions continue to face. Additionally, we continue to fine-tune the League’s structure to maximize the use of all available resources. The “Target” icon is used throughout the plan to help identify 2012 plan priorities based on feedback from credit unions through the Member Survey and MT/policymakers at this year’s planning retreats. 2012 plan priorities will be the basis for Board meeting strategic discussions throughout the upcoming year.
2012 LSCU Plan Priorities 1. 2. 3. 4. 5. 6. 7.
8.
Focus resources on our four core competencies (i.e. the things we want to be really good at). Achieve greater legislative successes at both the state and federal levels. Expand compliance training and support. Improve affiliation and perceived value of CUNA/League model for each asset size class of credit unions. Identifying industry trends and respond accordingly (i.e. how and what do we monitor?). Pursue greater collaboration and expansion of LSCU brand outside our existing borders. Continue to achieve organizational efficiencies while optimizing human capital (i.e. getting the most and best out of our existing staff). Be proactive in pursuing our “Keys to Success.�
LSCU Core Competencies & Priorities Governmental Affairs
Education & Training
Legislative Advocacy
Annual Convention & Exposition (AC&E)
Media Relations
Cooperative Initiatives Membership Relations
Conferences & Workshops Distance Learning
Regulatory Advocacy
Campaign Involvement Strategies
Accounting
Website
SAS CU Development & Support
Information Technology
Multi & Social Media Innovations
Chapter Support
Facilities
LSCU Councils Compliance Support & Information
Finance & Administration
Human Resources
Publications
Grassroots Advocacy Political Action Fundraising
Communications
Cooperative Brand Campaign
Foundation Financial Education Coordination International Partnership
LSCU Core Competencies Department: Governmental Affairs
Points of Differentiation to Gain a Competitive Advantage:
Achieve legislative wins at both the state and federal level. Build and maintain meaningful relationships with key policymakers to the benefit of Alabama and Florida CUs as well as the entire industry. Meet or exceed PAC fundraising goals. Elect credit union friendly candidates to public office and hold back support from lawmakers that don’t support our issues. Provide superior compliance support and information as part of the “Value of Affiliation.”
2012 LSCU Core Competencies, Priorities & Key Activities
Core Competency: Governmental Affairs Priorities: a) b) c)
d) e)
f)
Legislative Advocacy – Develop and implement an industry-driven, proactive agenda. Grassroots Advocacy – Coordinate state and federal grassroots lobbying efforts. Political Action – Expand involvement among credit unions and increase overall PAC fundraising. Regulatory Advocacy – Coordinate state and federal regulatory relations and issue communication. Compliance Support & Information – Provide resources to assist credit unions with meeting their regulatory compliance needs. Campaign Involvement – Coordinate grassroots involvement in election campaigns. 6
LSCU Core Competencies Department: Education & Training
Points of Differentiation to Gain a Competitive Advantage:
Be on the cutting edge of identifying industry trends and training needs. Provide excellent content, pricing and attendee experience that meet the educational needs of credit unions. Collaborating with system partners, become a recognized regional leader in education and training for credit unions.
2012 LSCU Core Competencies, Priorities & Key Activities
Core Competency: Education & Training Priorities: a)
b)
c)
d)
Annual Convention & Exhibition (AC&E) - Provide excellent content, pricing, marketing and attendee experience. Conferences & Workshops – Provide excellent content, pricing, marketing and attendee experience. Distance Learning – Provide excellent content, pricing, marketing and user experience. LSCU Councils – Provide excellent networking and educational opportunities for credit union professionals. 8
LSCU Core Competencies Department: Communications
Points of Differentiation to Gain a Competitive Advantage:
Be Alabama and Florida credit unions first source for industry news and information. Harness current and emerging communication channels to educate the media, consumers and lawmakers on the benefits of credit unions. Continue to execute a cooperative brand campaign within our borders and expand into other states.
2012 LSCU Core Competencies, Priorities & Key Activities
Core Competency: Communications Priorities: a)
b)
c)
d)
e)
Media Relations – Identify proactive opportunities for media coverage. Publications - Produce contentrich publications that inform and educate. Website – Provide a functional, high-tech and content-rich website. Multi & Social Media Innovations Use emerging technologies to better inform, educate and empower. Cooperative Brand Campaign – Grow statewide image campaign.
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LSCU Core Competencies Department: Cooperative Initiatives
Points of Differentiation to a Gain Competitive Advantage:
Focus on activities that reinforce credit unions’ cooperative spirit and social mission. Maintain high visibility in the field both at the chapter level and with individual CUs. Be responsive to the needs of credit unions. Effectively tell the story of the LSCU and CUNA.
2012 LSCU Core Competencies, Priorities & Key Activities
Core Competency : Cooperative Initiatives Priorities: a)
b)
c) d) e)
f)
Membership Relations - Develop an affiliation retention and recruitment strategy with an emphasis on relationship building. SAS CU Development & Support Provide programs and services directed at the needs of small asset size credit unions. Chapter Support - Provide leadership and support for chapters and chapter leaders. Foundation - Provide leadership and management support for foundation. Financial Education Support Position credit unions as strong advocates for consumer financial education. International Partnership - Oversee implementation and act as liaison between credit unions and WOCCU. 12
LSCU Core Competencies Department: Finance & Administration
Points of Differentiation to Gain a Competitive Advantage:
Ensure the LSCU & Affiliates are operating efficiently. Retain our best and brightest staff.
2012 LSCU Core Competencies, Priorities & Key Activities
Core Competency: Finance & Administration Priorities: a)
b)
c)
d)
Accounting - Maintain efficient and effective processes for accounting, internal controls and reporting. Human Resources - Advance a positive work environment and competitive wages/benefits for staff. Information Technology - Implement efficient and effective use of technology support for staff. Facilities - Manage facilities and major fixed asset strategies in support of LSCU & Affiliates.
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2012 Budget Highlights
2012 Budget Actuals 2010 Revenue Cost of Sale Gross Margin
4,182,980 (650,800)
Actuals 2011 4,125,049 (724,483)
Budget ‐ 2012 4,194,634 (755,537)
3,532,180
3,400,567
3,439,097
Personnel Expense
(1,851,857)
(1,830,268)
(1,978,089)
Operating Expense
(749,093)
(831,097)
(923,100)
Travel Expense
(235,982)
(255,200)
(264,913)
695,249
484,001
272,996
(318,481)
(319,448)
(203,148)
376,768
164,553
Income Before Overhead Overhead Net Income
69,848
2012 Budget Summary • Revenues expected to increase by $69.5k or 1.7%. – 80.6% of the increase is from dues. • The 3rd year of the Alabama phase in of the consolidated dues table. • Some increase in assets of credit unions have offset some of the loss of dues from mergers. – 6.05% increase in Education program revenues. • Slight increase projected for AC&E, Development Conference, LSCU Webinars and the Councils. – Cost of Sale expected to increase by 4.29% largely from LSCU Educational events. – LSCU Total Gross Margin is expected to increase by 1.13% from $3.4M to $3.439M.
2012 Budget Summary (Con’t) • Expenses are expected to increase by 4.12% in 2012. – Personnel costs from 2011 to 2012 are expected to increase by 8.08%. – This is largely a result of positions being vacant for part of 2011 and budgeted to be fully staffed in 2012. • Education Department reorganized utilizing current League staff with outside consulting assistance provided by CUES. An actual .40 FTE decrease in 2012. – Operating expenses will increase by 8.08% in 2012. • New creative for second year of image campaign being paid for out of League budget. • Full-year of John McKechnie as contract federal lobbyist. • Expenses budgeted for the RNC in Tampa.
2012 Budget Summary (Con’t) • Expenses: – Travel expenses projected to increase by 3.81%. • Cooperative Initiatives staff more on the road in 2012. – Overhead expenses projected to decrease in 2012. • As LEVERAGE adds additional positions, LSCU positions become a smaller % of the total number of employees, which decreases LSCU % of the total allocated overhead.
LSCU/LEVERAGE Full-Time Employees 2012 Budget
2011
LEVERAGE LSCU
53 21
50 21
Total FTE's
75
72
Savings from Consolidation LSCU Operating Expenses with image campaign creative cost for 2012
Operating Expenses
2007
2008
2009
2010
2011
2012
VARIANCE
ACTUAL
ACTUAL
ACTUAL
ACTUAL
PROJECTED
BUDGET
2007 Actual ‐ 2012 Budget
4,159,362
3,985,848
3,906,695
3,155,412
3,236,014
3,369,249
(790,113)
LSCU Operating Expenses without image campaign costs 2007
Operating Expenses
2008
2009
2010
2011
2012
VARIANCE 2007 Actual ‐ 2012 Budget
ACTUAL
ACTUAL
ACTUAL
ACTUAL
PROJECTED
BUDGET
4,159,362
3,985,848
3,906,695
3,155,412
3,236,014
3,259,316
(900,046)
2012 Strategic Plan Highlights
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2012 LEVERAGE Plan Priorities • Increase new sales of existing products and services within Alabama/Florida as well as outside or core market. • Focus resources on existing products with the greatest revenue and market growth potential (i.e. Blue Ocean Strategy). • Identifying industry trends and credit union needs; respond accordingly (i.e. sharpen our peripheral vision). • Streamline product development and implementation process to ensure speed to market. • Increase awareness and perceived value of LEVERAGE brand linked to core product and service offerings. • Selectively manufacture new products where there is a clear need and business opportunity in the marketplace.
CORE BUSINESS UNITS Manufactured Products Transactional Services - Debit Cards - Credit Cards - Chargeback Services - Gift Cards - Shared Servicing Audit and Consulting Purchasing Solutions Compliance Solutions Merchant Lending Recruiting
Value-Added & Distributed Products Value-Added Products - Remarketing - CU Solutions Group - Office Depot Distributed Products - CUNA Mutual Group - NADA/Blackbook - John M. Floyd - Telecom Recovery - SecureWorks - NewGround - CUNA Strategic Services - Landrum - CBS - O’Rourke & Associates - Transworld
Product Development
Sales
Marketing
Develop new ideas and solutions.
Develop sales plans and strategies.
Manage brand for LEVERAGE.
Enhance or improve existing products.
Generate leads.
Develop positioning statements and marketing plans.
Market research. Develop product model. Determine pricing, revenue and ROI models. Prepare business case.
Identify areas of need. Stimulate interest.
Promote LEVERAGE products.
Diagnose needs and create proposals.
Manage website content.
Close sales. Sales implementation and follow-up.
Identify vendors. Perform due diligence. Launch.
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2012 Budget Highlights
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2012 Budget Actuals 2010 Revenue
Budget - 2012
10,824,460
11,581,713
(1,628,753)
(4,290,510)
(4,809,934)
7,966,422
6,533,950
6,771,779
Personnel
(3,999,180)
(3,933,501)
(4,279,436)
Operating Expenses
(2,648,252)
(2,079,774)
(2,168,451)
(265,263)
(319,029)
(397,579)
Cost of Sales Gross Margin
Travel Income Before Overhead Overhead Pre-tax Income
9,595,174
Actuals 2011
1,053,726
201,647
(73,686)
298,686
314,586
272,825
1,352,412
516,233
199,138
Income Tax
(494,233)
(242,151)
Net Income
858,179
274,082
(82,902) 116,236
2012 Budget Summary •
•
Revenues projected to increase in 2012 by approximately 7%. – Slight increase in debit card sales. – Sprint program revenue expected to increase $58,500. • Increase less as CUSG decreased reimbursement per credit union member. – CUNA Mutual revenue is projected to increase approximately 2.8%. – Revenue in 2012 budget for ComplyTrac compliance solution. – Revenue in 2012 budget for new Merchant Lending program. – For some programs revenue is projected to decrease: • NADA, Remarketing – Ventelligence to continue to expand into other states and creating an increase in revenue for 2012. Cost of Sale expected to increase for 2012. – On a Gross Margin basis, LEVERAGE is budgeted a 3.63% increase in Gross Margin. – Plan is to increase this margin over time.
2012 Budget Summary (Con’t) • Expenses projected to increase by approximately 7%. – Personnel costs up 8.8%. • Increase in health care costs. • ComplyTrac position for the full year vs. half year in 2011. – Additional position budgeted as of July 2012 if demand for product warrants. • Merchant Lending program position added in 2012. • CU-ACE auditor position added bringing us to six auditors in the field. • In 2011, there were several positions that were vacant at some time during the year.
2012 Budget Summary (Con’t) – Operating expenses up 4.3%. • Occupancy costs in Birmingham facility up 3%. – We currently have 5,200 square feet unoccupied space in Birmingham at a loss of $134k. • Staff training cost up $39k for 2012. – 40% of this is sales training for Sales team. • Depreciation up 3% due to new capital purchases. • Promotion costs up 14% due to marketing action plans for ComplyTrac and Merchant Lending. – Travel to increase approximately 24.8%. • New product rollouts. • New state implementations. • BDC presence in non-core state markets.
2012 Budget Summary (Con’t) • Strategic Plan Initiatives: – Per 2011 strategic planning retreat, focus resources on products where we can excel: • Ventelligence • ComplyTrac • Merchant Lending – Outcome of these programs could have a profound impact on 2012 net income. – Wind down of some marketing agreements as they sunset. • Set new net revenue threshold of $50k. – Create “Innovation Team” to supplement research & development staff to scan the environment. – Refocus sales activities and variable compensation model to match strategic plan priorities.
2012 Budget Summary (Con’t) • Small Asset Size Credit Union Voucher Program – Each affiliated credit union under $50 million in assets will have a $500 voucher to use for any LSCU/LEVERAGE product or service. • This increased from $400 in 2010-11. • The asset size was increased from under $30 million to under $50 million. – This is paid out of LEVERAGE funds and administered by the Cooperative Initiatives staff. • CUBS dissolved and most of lingering costs absorbed in 2011.