“Service as an Act of Stewardship” will Transform your Credit Union

Service, what is it?

Bank service has been defined by the consumer as, did they engage me quickly, did they make eye contact, did they smile, were they fast, did they say thank you – a very low bar to member satisfaction but one that doesn’t differentiate the credit union. What can a credit union do to stand out in this congested market?

Traditionally, credit unions have embraced a “Sales-through-Service” culture, prioritizing member satisfaction while driving sales and growth. For the last decade, a solid push has been made to transition credit unions to this #sales-through-service culture, some with success and others not. To make this transition, many credit unions have initiated sales incentives and bonuses to reward product sales. I have seen where the incentive became the purpose of the member-serving staff. In some cases, staff efforts to earn incentives were at the member’s expense, or, like in the case of Wells Fargo, they created an environment where products were added to consumer’s accounts without the customer’s knowledge. Credit unions were not immune to this breach of trust. If we look at the original purpose of a credit union, it did not include product selling but was a way to meet the banking needs of a specific consumer segment.

What is the alternative to the sales-through-service culture that ensures our staff is not just selling products but helping members achieve their needs while advancing their financial fitness?

The answer is creating a culture of “Service as an Act of Stewardship,” a new paradigm in how a credit union serves its members. This approach goes beyond transactional relationships, emphasizing long-term well-being, community impact, and sustainable practices. This culture embraces the idea if the members are financially successful, the credit union will be financially successful – the “circle of prosperity.”

Transitioning to this culture requires a strategic shift in mindset, mission, values, and operations. Our purpose was to serve the members’ needs, not just the organization’s; a balance between the two is necessary.  

First, let’s understand the differences between the two cultures.

The Sales-through-Service Culture is Member-Centric. It focuses on meeting immediate member needs and ensuring satisfaction. This culture is performance-driven and measures success by sales targets, member acquisition, and product penetration, often incentivizing the employee for these efforts. It is transactional, which means it engages members by providing solutions that benefit both the member and the credit union’s financial goals.

“Service as an Act of Stewardship” Culture is a Holistic Approach: This approach prioritizes the members’ long-term financial health and overall well-being. The stewardship culture is purpose-driven and measures success by member impact, community engagement, and sustainable practices for both the member and the credit union. It is also relational, building deep, trust-based relationships with members. This approach emphasizes financial education and empowerment, along with ethical guidance.

Transitioning from your sales-through-service culture to a “Service as an Act of Stewardship” culture can significantly differentiate a credit union in several impactful ways. Here are the steps that a credit union can take to embrace this stewardship model of service and set a stewardship-focused credit union apart:

  1. Redefine the Mission and Vision: The credit union must update its mission and vision to reflect a commitment to stewardship, emphasizing long-term member and community welfare. Once the mission and vision are aligned with the stewardship culture, marketing must communicate the mission and values to ensure that all stakeholders—staff, members, and the community—understand the stewardship model. All staff must embrace the new direction and begin to live this new mission and vision in their interactions with members, each other, and the community.
  2. Cultivate Leadership and Training: Leadership buy-in is vital. Every leader and the board must commit to championing the stewardship culture. This commitment must become a staple in every hiring, promotion, coaching, and mentoring session and is elemental in the performance review process. But this commitment is not a “one-and-done” proposition. All ongoing education must continually focus on the financial fitness of members and staff, ethical decision-making, and community development and engagement.
  3. Revise Metrics of Success: Metrics must shift from traditional sales metrics to measures that capture member financial fitness, satisfaction, and community impact. Long-term goals must include performance indicators that reflect sustainable growth and stewardship values, such as member retention, member and credit union financial resilience, and community engagement.
  4. Deepen Member Trust and Loyalty: To build trust-based relationships, the staff prioritizes long-term financial health and ethical guidance as their “North Star” in their member engagements, and the members will see the credit union as a genuine partner in their financial journey. When a member sees the credit union as their partner, a place they belong, not their “bank,” they will be more likely to stay with a credit union because they know the credit union consistently puts their interests before the interests of the credit union. Being seen as a partner leads to higher retention rates and positive word-of-mouth referrals.
  5. Enhanced Member Education and Empowerment through Financial Fitness Initiatives: When the credit union offers real-time financial coaching and recommendations at the frontline coupled with a comprehensive financial fitness curriculum, it empowers these members to make informed decisions. Providing financial fitness initiatives positions the credit union as a leader in member advocacy and support, a trusted partner as the member travels through the peaks and valleys of their financial journey. To be successful, the credit union must provide its member-facing staff with the knowledge and confidence to offer personalized advice to members in real-time. Tailoring services to individual members’ needs enhances the perceived value and effectiveness of the credit union’s offerings. It reinforces the understanding that the credit union is a true partner with the members in their financial journey.
  6. Community Integration, Impact, and Involvement: Actively participating in and supporting local community initiatives differentiates the credit union as a committed community partner, enhancing its reputation and relevance. Credit unions must seek out non-profit, educational, large employers, and community foundations focusing on financial, physical, and mental wellness, knowing these three elements are intertwined. Along with this community involvement, the credit union must demonstrate social responsibility by committing to social equity, diversity, and economic inclusion. This commitment strengthens the credit union’s standing as a socially responsible and trusted community partner.
  7. Sustainable Practices, Ethical Standards, Environmental Responsibility: Adopting and promoting sustainable practices sets the credit union apart as an environmentally conscious institution. It appeals to increasingly eco-aware members and demonstrates holistically their commitment to stewardship—stewardship to the community and the environment. This responsibility must also cross over into a model of ethical leadership where all credit union leaders uphold high ethical standards in all operations and engagements. A culture of ethical leadership builds a solid reputation, attracting members who prioritize ethical considerations in their financial choices.
  8. Innovative Member-Centric Products: Developing products prioritizing member welfare over short-term profitability demonstrates a clear commitment to stewardship, attracting members looking for ethical financial solutions. Most credit unions would benefit from an effort to review their product suite. This review would include looking at the alignment of the terms and conditions of each product with a focus on the financial fitness of the member, the relevance for today’s consumer, its use and adoption, and the competitiveness of each product. Credit unions should also focus on sustainability-focused products that offer green loans, payment solutions, and investment options that support environmental and diversity initiatives. This further differentiates the credit union from competitors as active practitioners of stewardship efforts.
  9. Focus on Long-Term Financial Health and Resilience for Members: By emphasizing long-term financial health, credit unions will help their members build resilience, positioning themselves as essential partners in their financial stability and growth. This effort includes proactive support, which provides financial advice, planning, and support during each member’s interaction. The frontline staff needs the training and confidence to actively listen to members and become curious about what the member intends to accomplish. For example, if a member asks for a personal loan, find out why they want the loan so that the employee can make sure they choose the best solution or solutions to solve their problem or meet their need. Also, during economic downturns, the credit union must reinforce its role as a steadfast ally by seeking ways to help members through challenging times.
  10. Reputation and a Strong Brand Identity: A clear, consistent message about the credit union’s commitment to stewardship and the financial fitness of each member enhances brand differentiation, making it stand out in a crowded financial market. One way to build a strong brand identity is to seek public recognition for practicing ethical and egalitarian standards that impact the community. Building a positive public image as an organization that practices stewardship of the members, community, and environment will attract new members who value these principles.

The Practical Steps to Stewardship as a Differentiator

  1. Marketing and communication: These elements play a vital role in strategic efforts, starting with transparent communication. Marketing must communicate the credit union’s stewardship values and initiatives through marketing campaigns, member communications, and community outreach. Successful communication is best achieved by showcasing success stories and testimonials that highlight the positive impact of the credit union’s stewardship approach on members’ lives. Creating a tool that tracks the number of members that have benefited from its stewardship and communicating these metrics broadly will bring attention to the credit union’s mission.
  2. Member Engagement must become proactive versus reactive. Member-facing staff must learn and be confident in thinking for the member, not just reacting to the member. Member engagement must include the active participation of the member in the decision-making process of choosing the appropriate solution based on the employee’s suggestions. Regular feedback that engages members through real-time conversations, surveys, and feedback loops must be instituted to allow the credit union to understand the members’ perceptions, how the credit union is meeting each member’s needs, how they view the interaction and recommendations, how they rate the experience of implementing the recommendations, and to use this data to improve services continuously.
  3. Partnerships and Collaborations: The credit union must form partnerships with organizations that align with the credit union’s stewardship values to amplify impact and reach. Look for these partnerships in non-profits, educational organizations, significant employers, and community foundations that share in the mission of serving consumers with physical, mental, and financial fitness resources. Also, collaborative initiatives should be sought from credit union vendors and strategic partners so that they can support these financial fitness and stewardship efforts and even launch collaborative initiatives that address community needs. These collaborations will demonstrate the credit union’s active role in societal improvement and the focus on stewardship.

There will be Challenges, but here are some Solutions.

Challenge: Resistance to change is omnipresent in any credit union. Employees who have grown accustomed to the incentives and see them as entitlements and leaders who believe in the axiom, “you get what you pay for,” will need to evolve.

Solutions:

  • Foster an inclusive environment where employees feel valued and understand the benefits of the new culture.
  • Repurpose the budget allocation for incentives to a new pay scale and rewards and recognitions when an employee demonstrates how they have personified the stewardship model with a member, in the community, or another employee.
  • Highlight success stories and provide continuous support throughout the transition.
  • Make the intention of this Stewardship Model clear to all leaders and make the commitment and success of this model part of their bonus structure and performance reviews. Leaders who fail to get on board must be coached extensively or put on a performance improvement plan.

Challenge: Measuring Intangible outcomes is always tricky.

Solution:

  • Build consensus with the leadership team and the board on the measures and how leadership will report these measurements.
  • Develop qualitative and quantitative measures that capture the essence of stewardship, such as member testimonials, case studies, and community impact reports. Couple these with the standard reports of membership growth, engagement, product adoption, and balance increases.
  • With financial fitness as a primary value, it is vital that the credit union also measure the impact of this effort on delinquencies, collections, and the efforts to provide solutions to members suffering financial trauma.

Challenge: Balancing Financial Goals with Stewardship is vital. Credit unions must recognize the need to make a profit and remain financially sustainable. After all, the leadership is fiduciary of the members’ money.

Solution:

  • Track the historical KPIs and their trends to recognize any significant changes. A word of caution here: the reality that “things will be worse before they get better” applies. The board, staff and members will need to learn to fully understand the credit union’s new mission and values before they gain the trust required. Patience will be essential to the long-term success of this culture.
  • Integrate stewardship principles into all financial planning, member service efforts, processes, policies, and product development. This integration will ensure that profitability and member welfare are balanced.

Transitioning to a “Service as an Act of Stewardship” culture will profoundly differentiate a credit union by fostering deep member trust, enhancing community impact, and promoting sustainable and ethical practices. This approach strengthens member loyalty and satisfaction and establishes the credit union as a leader in ethical financial services, driving long-term success and community prosperity. By embracing stewardship, credit unions can create a unique, compelling value proposition that sets them apart in an increasingly competitive financial landscape. Transitioning from a sales-through-service culture to a “Service as an Act of Stewardship” culture represents a profound shift for credit unions. It requires redefining success, fostering deep relationships, and committing to long-term, sustainable practices that benefit members and communities alike. By embracing this transformation, credit unions can reinforce their role as trusted financial stewards, ensuring their relevance and impact for future generations.

About rich@leading2leadership.com

Rich Jones is the Founder/Principal of Leading2Leadership LLC. Before starting his strategic planning agency, he spent over 20 years in leadership roles in the financial services sector. Before becoming an executive in the financial services sector, Rich was an entrepreneur, building and selling two businesses and working for early-stage start-up companies in executive roles in marketing, business development, and seeking investment partners. With more than three decades of experience, he brings innovative thought to companies and executives. Rich published “Leading2Leadership, a Situational Primer to Leadership Excellence.” The book is available on Amazon.com and was designed to be used as a book study for leadership development programs; it breaks leadership skills into manageable situations for discussion and reflection. Rich works with credit unions, CUSOs, and vendors, designing digital, data, culture, marketing, and branding transformation strategies. In 2014, Chosen as a Credit Union Rock Star by CU Magazine, and in 2018, Rich received the Lifetime Achievement Award from CUNA Marketing and Business Development Council. A Marine and graduate of Colorado State University, Jones shares his expertise at www.leading2leadership.com.

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