Written Agreements With SEGs A Key to Attracting More Members

By Jon Haller
Director of Market Research,
Credit Union National Association

One of the keys for credit unions to strengthen their SEG relationships and attract more members from their SEGs, is for them to secure formal written agreements with their SEGs that clearly establish and set forth the expectations and responsibilities of both parties, and ensure that the credit union and its services are properly (i.e., more heavily) promoted. This, according to a study sponsored by the National Credit Union Foundation (NCUF), conducted by CUNA Research, and featured in CUNAs recently released 2002 National Member Survey Report.

The study goes on to show that having formal written agreements leads to a host of benefits and positive outcomes for credit unions. SEGs that have such an agreement, when compared to those that do not…

• Are noticeably more likely to employ virtually all of the nine different methods used to promote the credit union and its products to employees. This includes being twice as likely to bring the credit union representative in for on-site presentations to employees, nearly 10 times more likely to provide the credit union with employees home addresses for direct mail purposes, about three times as likely to include in the companys newsletter articles from and/or about the credit union, and twice as likely to distribute the credit unions newsletter to employees.
• Are almost three times as likely (53% versus 19%) to be categorized as highly supportive of their credit union – that is, to be among the top 20% of SEGs, in terms of valuing, supporting and being willing to work with the credit union to increase member penetration.
• Report a higher member-penetration level among their companys employees – 26% versus 20%, respectively. (Note: This 6- percentage-point difference in penetration levels would most likely grow as time goes forward, as most of these agreements have been made with SEGs that have been offering the credit unions services for four years or less – the time period for which member-penetration levels are the lowest, due to the newness of the relationship).

Making formal written agreements with both new and existing SEGs should play a major role in any credit unions SEG-development and - penetration efforts.

Moreover, any such agreements should be brought out and reviewed by both the credit unions and the SEGs representative, together, on an annual basis, to make sure that both parties objectives are being met, make any necessary adjustments to improve the success and effectiveness of the various promotional strategies, and ensure that the benefits to the company and its employees remain fresh in the SEG liaisons mind.

The above results, other major findings and strategic considerations from this study, and over 25 pages of strategies that credit unions have employed to strengthen their relationships with their SEGs and attract more members are all included in the 2002 National Member Survey Report.

Next months topic: Which drives members PFI status – checking accounts or 1st mortgage loans?

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