Loans From The Phone

Hanscom Federal turned to outbound calling to onboard members but uncovered a primary channel for loan growth along the way.

Hanscom Federal Credit Union ($994M, Hanscom Air Force Base, MA) has little trouble gaining new members. The institution achieved 5.93% member growth year-over-year in 2Q 2012, according to Callahan & Associates Peer-to-Peer software, but the credit union still has to consider how it maximizes the value of these relationships to benefit both parties needs.

In the mid 2000s, Hanscom added an online account opening option to its roster of services. This increased convenience for new members but also decreased potential face time, a critical factor in deepening those relationships.

Our competitors were taking a minimalist approach to opening these online accounts, sending their new customers something in the mail or maybe just an email, and that was it, says Scott Post, senior vice president for HFCU.

In the credit unions eyes, that just wasnt good enough.

We knew we had to engage new members in the first six months or wed risk losing them, Post says. The credit union spent the next several years building a new outbound calling department that was capable of contacting online members on the day of their application, as well as provide two week and two month follow ups.

The credit union has since increased the visibility and production of its outbound efforts, and what started as an onboarding strategy for the virtual channel has since evolved into a powerhouse of member acquisition and sales. Hanscoms outbound strategy now also targets individuals who opened their account in branch as well as indirect members, who make up 15.6% of the credit unions total auto loan activity.

In the month of July, the outbound call center handled roughly 60% of new member relationships. Loans originated per employee are up by nearly $467,000 annually, according to Callahan & Associates Peer-To-Peer Software. And 45% of the total loan dollars closed at the credit union now comes from the outbound channel, Post says.

Outbound calling has been a powerful force in driving Hanscoms success, but this strategy also brings unique challenges and additional requirements for equipment, personnel, and training that a typical call center does not.

Competition can be a great driver of performance in many instances. But depending on their background, some sales oriented reps may need additional attention to avoid overly aggressive sales tactics or an individualized work mentality.

It takes a different skill set to make outbound calls versus handle inbound ones, Post says. But we still split the sales incentives between the reps to encourage team work within the department.

All of the outbound employees are also trained as member service representatives and level one loan officers, limiting the need for additional transfers and other hurdles as the credit union tries to deepen the relationship. For complex loan products, the outbound center also hosts three dedicated loan officers.

Reps not only cross-sell products and services but also address other basic concerns and questions such as which of the potential 95,000 physical contact points (including branches, shared branches, and ATMs) the member should be using. This preemptive activity is important in helping the credit union cut down on unnecessary traffic in more expensive channels, and likely contributed to the 49 basis point improvement in its efficiency ratio year-over-year in 2Q 12.

July 17, 2014

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