By Ray Birch
SCOTTSDALE, Ariz.—With credit unions having worked diligently to overhaul point-of-sale delivery systems, one analyst says it’s now time to shift the focus to a different point.
“I believe the next battleground is point of influence,” said Cornerstone Advisors’ Senior Director Sam Kilmer.
According to Kilmer, “point of influence” is markedly different than point of sale. Point of sale, he said, is what happens once a consumer has decided to buy something.
“Point of influence would be what happened in your mind before you decided to go to the credit union’s point of sale solutions,” said Kilmer. “So, how did the credit union actually influence your decision? It’s what's in your mind before you picked up your phone or your mobile app or your computer.”
Some Strategies
A credit union can move forward with a good point of influence strategy in several ways, Kilmer said.
“For example, do you have good content you offer members, such as a blog or white papers, financial education, things like self-help apps?” he asked. “If you're thinking about buying a house, well, right then you're not thinking about buying a mortgage. So, does the credit union make available to you easily accessible methods of understanding best ways to buy a house or find a Realtor? If you were there when the member or potential member was at the point of influence, then you can lead them to your point of sale.”
Can’t Wait
Kilmer stressed it is no longer effective for credit unions to sit back and wait for consumers to come to them—whether that be through branch doors or digitally, saying such a wait-and-see posture is costly. He compared the role credit unions need to be playing to that of influencers in the social channels, saying credit unions have long been influencers even if it’s been more subtle.
“For example, there are credit unions that have been focused on large companies. Well, there are people inside those organizations who are heavily influential toward other members of that segment,” said Kilmer. “Historically what the credit union might have done is work with the human resources department and been a part of the company newsletter, or something like that. That would be influencer marketing 1990s style.”
Sam Kilmer
Helping Self With Self-Help Apps
Today, Kilmer is advising credit unions to develop the equivalent of self-help apps—apps that help consumers find a house or make the right decision on buying a car.
“The point now is how are you working with consumers that are your potential members or existing members on the purchase that then drives the loan or the drives the decision to join the credit union or open a checking account?,” Kilmer asked. “You have to be influencing and be a positive influence on consumers before they ever know they need a loan or a deposit account…It's not just having a better point-of-sale app once they get there; you have to be better at marketing before consumers get to that point.”
In addition, Kilmer said credit unions need to step p in their roles as content developers, emphasizing the cooperatives simply cannot wait long to become present at the point of influence.
The Next Battle
“The very next battle for credit unions for survival is not just the sales process. What do you do when you have a consumer coming to you? It’s what comes before that,” reiterated Kilmer. “A lot of leading credit unions are obviously already working on this. What I'm suggesting is in the next few years if we were to have this conversation, the top thing we will be talking about, just like we are talking about point of sale now, will be point of influence. And if the credit union waits until then to try to get this right it will be too late.”
‘It’s Stunning’
Kilmer added that data show just how hard credit unions have been working on point of sale.
“Over the last couple years, the most deployed solution in the credit union market has been digital account opening,” Kilmer said, citing Cornerstone Advisors data. “This year about 30% of all credit unions are planning or have planned to add or replace a digital account opening system—where you go to a credit union’s website and open up an account or start a membership.”
That figure has been at 30% or higher for several years in a row.
“(That means) every year almost one-third of the credit unions have been actively planning to replace this technology—digital point of sale is white hot,” Kilmer pointed out. “In some cases, this means many have replaced this system every three years. It's stunning.”
Outmoded Designs
One of the key reasons credit unions have been replacing the technology, according to Kilmer, is the dramatic growth in digital point of sale emphasis as credit unions transition away from a reliance on branches for product and service sales.
“This speaks to the fact credit unions, in many cases, designed their interactions, designed their value, around somebody coming in and visiting them,” Kilmer said. “Come into the branch or call the call center, that kind of thing. Increasingly, that's not what people want anymore, as we know. People just want to be able to go to the point of sale anytime they want.
“If you look at the loan origination systems out there, and you also look at the reasons why people were replacing their deposit account opening systems, it had to do with things like being able to handle abandoned apps, and being able to have a good-looking, attractive, successful user experience that handles things like payments,” Kilmer continued. “(It’s about) handling all the account funding and compliance matters in a real fluid way. It just wasn't very fluid.”
Falling Behind
Kilmer emphasized that credit union initiatives have digital point of sale has generally had not been effective in the eyes of consumers that are used to the Amazon experience. As CUToday.info has extensively reported, consumers’ perception of credit union service has slipped below banks for four consecutive years in the American Consumer Satisfaction Index study. The primary reason, experts have stated, is digital service.