"Profitable" is one of those words that you may never hear at a credit union.


Harry Potter reruns have been on TV lately, and every time I hear “He-Who-Must-Not-Be-Named,” I start thinking about other words that are rarely spoken for fear of retribution.

“Profitable” is one of those words that you may never hear at a credit union.

At least, spoken out loud.

Yes, I know that credit unions are not-for-profit, and that any return on an investment goes toward better deals for your members. But I also know that your CFOs are well aware of the profitability of each product and service you offer. Plus, every promotional campaign that we have worked on for a CU has been measured by its ROI, so things like “return” (a more palatable word for profits, perhaps) are important even to Marketing.

I also know that marketers are keen on divvying up membership and market by demographics such as age, income, etc.

Why are marketers so reluctant to look at their membership in terms of profitability?

After all, you know that some members are extremely profitable, some less so, and others cost you money. But for some reason, the thought of focusing on your profitable members is never even brought up. Most marketers have no idea which members are profitable, and which are not, not to mention why. Yet that knowledge should be the foundation for your credit union’s marketing strategy and future growth.

Now, I’m not suggesting that you focus only on profitable members and forget the rest. But if you don’t identify and understand how and why your profitable members became so profitable, how do you expect to move unprofitable members to the other side of the equation? How do you build the returns that will allow you to do more for all of your members?

If I’ve convinced you to look into this, just remember two things:

1. The number of services is not the same thing as profitability. Oftentimes the number of products used by non-profitable members is equal to those of the profitable ones.

2. Your Board Members may not be profitable if they only use you for deposit products, but they should also understand why profitability matters.


Kent Dicken
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