Stephanie Schwenn Sebring

Cultivate SEG Relationships

Some CUs are finding new ways to work their original social networks.      

June 2013 – Vol: 36 No. 6   | CUES CU Management Magazine

by Stephanie Schwenn Sebring

Select employer grouplantsp marketing has held many chapters within the credit union industry. But as the financial industry evolved, many credit unions found serving one employer group was not enough to flourish and thrive. To compete, credit unions sought wider audiences­—either by expanding to more SEGs or seeking a community-based charter.

Now, with competition at every corner, many credit unions are re-examining their SEG strategies. Make no mistake though: Today’s SEG marketing is hugely different and, to compete, credit unions are pulling out all the stops.

New Measures of Success

Capitalizing on key relationships has always been pertinent in the SEG business plan. Growth is the primary goal, but with effective SEG marketing, bolstering community ties becomes an invaluable byproduct.

$586 million/70,000-member Member One Federal Credit Union, Roanoke, Va., was established in 1940 to serve Norfolk & Western Railroad employees. While staying true to its roots, the CU is finding effective and innovative ways to meet new member demands. Its headquarters, located just a few hundred yards away from the original sponsor, serves a still-strong employee base and the CU cherishes those ties.

“We take our heritage seriously,” says CUES member Mark Hudzik, chief development officer at Member One FCU. “We wouldn’t be what we are today, without the trust and commitment from railroad employees.

”The loyalty remains steadfast, but the CU’s approach to SEG marketing has shifted dramatically. The CU now serves 560 SEGs, diverse in size, demographics and needs. Penetration levels also vary, ranging from 75 percent at the smaller companies to around 33 percent at larger groups.

“The landscape is changing right in our own backyard,” elaborates Hudzik. “Banks are experiencing losses in their original niche and are going after our SEGs. Offering value to employer groups is more important now than ever before.”

To contend with intensifying competition, Member One FCU has implemented a detailed approach to SEG marketing. “Every SEG has a plan, and every SEG event is developed with meticulous detail and feedback,” explains Hudzik. “For SEG marketing to be successful, you must develop a comprehensive and evolving profile, so you can determine employee needs.

“We look at the average age; professions within the group; whether or not they’re homeowners and, if so, the types of homes they own. We look at transportation needs and how they like to conduct business.” Plans are designed using this information to meet management and employee needs. For instance, one SEG may want to focus on budgeting and short-term loans while another may need to address home ownership or transportation requirements. The primary goal, though, is to meet employee needs while enriching their financial comfort and security.

The information is gathered during meetings with SEG representatives and maintained as part of the ongoing and personal relationship the CU has with each SEG.

Since Hudzik’s position was created five years ago, Member One FCU has achieved 40 percent membership growth, increasing from 50,000 members in 2008 to just over 70,000 today. Hudzik credits much of this growth to the CU’s phenomenal SEG strategy, coordinated by the business development team, “One Mobile.” Five employees work collectively to grow the SEG base and increase penetration. They also remain highly visible in the community.

When events are planned (such as new employee orientations, PR trips, or even regular onsite visits), each department of the credit union is part of the process. Likewise, a representative from each department attends the event.

Member One FCU also uses colorful car wraps for the cars business development staff drive. “When we pull into a SEG, everyone knows we’re here,” explains Hudzik. “The car is a moving billboard and creates immediate, word-of-mouth buzz.”

Hudzik continues, “We talk to our SEG reps all year-long. We take them on different outings and engage them at onsites. The learning never stops.” Outings include an annual bus trip to attend opening day at the Washington Nationals.

“We also invite SEGs to special events we’re sponsoring,” says Hudzik. The event can even be tailored to SEG demographics or interests. Recently, a larger medical SEG enjoyed its own personal table at the American Heart Association’s Heart Ball, an event sponsored by the CU. Other events include trips to the local orchestra and football games. “It’s about cultivating relationships,” says Hudzik.

“Marketing, especially SEG marketing, should never be all-inclusive or one size fits all,” he continues. His strategy is to give each SEG a singular approach, with brainstorming sessions that include four questions:

1. What will give value to the company? Incorporate a strong business-to-business strategy, so SEG management gets a solid offer for employees. For example, last year, the CU created the event, “Move Your Car Loan,” featuring a 3.99 percent auto refinance rate special for SEGs. The promotion generated $1 million in new loans. It gave employees a true benefit and positioned the SEG as the benefit provider.

2. What will give value to the employees? Implement a strong business-to-consumer strategy, so employees benefit from the offer. The CU’s popular Carl and Roy campaign focuses on the lives of two brothers, and how their CU relationship has provided new financial freedom.

3. What will give value to the CU? Is the relationship a win-win for both CU and SEG?

4. Does the credit union own the process? Ensure you’re sole sponsor of the event, and not just one of many invited, says Hudzik. Avoid being one attendee at the annual employee benefits fair. Not only is it ineffective, it can imply you’re just one of the crowd. Sponsor the event and make it yours.

Is there a difference between SEG-based and community-charter marketing? Most definitely. Hudzik believes going strictly community can make a CU complacent and result in less community involvement. He continues, “I’ve seen institutions use brick and mortar as a substitute for grassroots marketing. This, I believe, is a big mistake.”

Technology is a Tool

Savvy apps, online presentations, and mobile deposits have made SEG marketing even more versatile. Now, technology travels with the employee and offers a unique visual impact and the potential for online transactions. If accounts aren’t opened onsite, companies and employees still favorably view institutions that are tech-savvy. iPads are an especially recognizable tool that aid in cross-selling.

Other tools, including software designed to observe SEG growth, can boost marketing efforts. For example, software like SEGManager can track profitability and member penetration levels. Member One FCU uses the system regularly as part of its day-to-day business. Records can be added while working remotely and statistical data interfaced with core system data. “Our reps add data using their iPads onsite,” explains Hudzik.

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