One of the funniest memes I saw recently was this one:
Funny. Sad. True. When we were planning for 2020 in 2019, no one could have foreseen the pandemic or its devastating economic impact.
But the “new normal” is that we’re now living in an economic downturn. Credit unions and community banks must adjust their strategies and pivot their tactics in light of the new conditions. Many financial institutions are in a survival mode.
But that’s the wrong mindset to take.
You don’t want to just survive economic downturn. You want to thrive during economic downturn.
But how? Everywhere you turn there are negative economic indicators: an overwhelmingly high unemployment rate, retail consumer spending dropping off a cliff and the stock market on the downward portion of a rollercoaster ride.
Just as there are economic indicators that the economy is suffering, there are also steps (or indicators) your credit union or community bank should take to thrive during economic downturn. Research from previous recessions and the current crisis reveal a path you can take to thrive through year-end and into 2021.
There are three keys to accelerate your growth right now. Your messaging, your employees and your strategy will lead you through the current financial crisis. You must develop a plan for each.
MESSAGING
As noted in a previous post, you need to be deliberate and not desperate with your marketing now. Your brand is more important than ever. Successful credit unions and community banks are investing in their marketing and seeing positive results.
For example, First Bank Home Loans is seeing huge success through leveraging creative customer testimonials. They are also providing clever information on how families can pass their time during quarantine. Rather than tapping the brakes on marketing they are accelerating it through clear, concise and consistent messaging.
“During the last 45 days at First Bank Home Loans, our team pulled together a record breaking performance.” --Chuck Miller, President of First Bank Home Loans
During economic downturn it’s important to remember the adage, “When times are good you should advertise. When times are bad you MUST advertise.”
But it’s not about advertising—it’s about your message.
Simply spending more on ads will NOT lead you out of the recession. However, crafting the right message through your brand will.
Adam Stewart, vice president of marketing at Belco CCU noted “Having our brand and member experience initiatives firmly in place makes a huge difference in how our credit union, both as a whole and as individuals, has risen to respond to the coronavirus situation. We are much better prepared because of the investment we made in foundational elements like brand and member experience.”
The wisest marketing investments you can make today include tightening your brand so you have a clear value proposition, updating your website and mobile efforts since those are the ways consumers are accessing you and assessing the current state of your marketing since marketing will never be the same and you must pivot quickly.
If you want to thrive during the economic downturn then invest in marketing.
EMPLOYEES
While the “stay at home” orders may have you feeling somewhat isolated, the reality is you cannot survive (much less thrive) without your staff. Your team—and the level of service they give consumers and their fellow employees—could very well make or break your success.
When times are tight budgets need cutting. And since the human resource expense is one of the largest dollar line items, it’s a natural target. Salaries, benefits and training are ways many financial institutions try to trim.
But as Stephen Covey, author of Seven Habits for Highly Effective People once said, “If you have to cut things out you just cut people; you cut training and development; you kill the goose that lays the golden egg; for a short term period you improve profits. But then you’ve liquidated the human resources; the trust inside the culture and the voice of people in order to have a short term benefit; in the long run you have to live with the consequences of a dead goose.”
According to Fast Company, “organizations that prioritize employee development earn median revenues of $169,100 per person, while staff at companies that don’t highlight training make $82,800.”
In today (and tomorrow’s) economy, training your employees is changing.
More employees are working remotely (and may continue to do so). Training needs now must go beyond in-person options.
We are now conducting our member experience and leadership training remotely. The client content is customized and the delivery is unique. Whether through live Zoom sessions, recorded PowerPoints, downloadable PDFs or other means the training remains engaging.
I have gotten so much positive feedback from our leaders over the last three weeks in these unprecedented times. It was just what the doctor ordered.” --Rodney Parker, EVP/CFO of Centric Federal Credit Union
If you want to thrive during the economic downturn, then invest in your employees.
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STRATEGY
Strategic planning is a process, not a date on a calendar. You should always be planning for the future—even in the midst of a pandemic.
The past several weeks it seems like we’ve gone from one crisis to another. For awhile, things were moving so fast many of our heads were spinning. Quick decisions on branch closures, employees working from home, having staff work in cycles and a myriad of other operational issues were overwhelming. There was no time to think strategically.
In fact, many of our 2020 strategic plans were probably tossed in a trashcan. As Donald Miller noted when it comes to strategy, we’ve gone from playing chess to playing tennis.
As you put together your strategy, like Donald Miller we recommend credit unions and community banks develop four plans:
Financial plan
Business plan
Messaging plan
Recession plan
Part of strategic planning is about asking (and answering) the right questions.
One of the most important strategic questions you must address is what opportunities do you see in the current situation? As challenging as things are right now, there ARE opportunities to seize. Don't be passive with strategy: be active.
Helen Delin, president of NAS JRB Credit Union in New Orleans, is continuing with her planning session scheduled for June. She noted during a recent interview with On The Mark Strategies, “While our top concern is and will continue to be the health and safety of our team and our members during this pandemic, as a progressive credit union we must also look to the future. We believe these trying times will pass and the best way to prepare for growth post-virus is by making sound investments in areas like strategic planning now. This should help position us ahead of the curve when this cloud passes and the economy begins to regain its footing.”
If you want to thrive during the economic downturn then invest in your strategy.
Pausing never leads to growth. You can actually accelerate your growth during an economic downturn. But that acceleration won’t happen on its own. You must invest in your messaging, your employees and your strategy.
