Pots, Pans, And Epiphanies

From the May 2004 National Association of Credit Union Service Organizations’ Annual Conference in Las Vegas.

By Bill Merrick

Peddling $300 sets of pots and pans door to door in 1966 gave Dr. Tony Alessandra an abundance of life lessons, namely that there’s a big difference between making a sale and creating a customer.

"I sold 10-piece sets of cookware, and four of the pieces were lids," recalls Alessandra, a Henderson, Nev.-based speaker and author. "Back then, you had a canned presentation, you knew 101 ways to overcome an objection, and you never asked for a referral after the sale. You got out of there before the person changed his mind."

Despite selling $11,000 worth of cookware during his first three weeks on the job, Alessandra realized something was wrong with the process when he delivered the goods.

"One woman said, ‘You sold me.’ She felt like she’d been taken," he says.

The solution Alessandra eventually embraced: fostering loyalty through problem solving and working together. He cites five components to building member loyalty:

• Building value for the member. This entails finding out what members value rather than simply pushing a certain product each month.
• Creating a perception of difference between the credit union and its competitors. Every employee must know the credit union’s advantages and disadvantages compared with competitors, including banks, brokerage firms, insurance companies, and others.
• Encouraging multiple product use by members. When a member uses one credit union service, there’s a 50% chance that person will leave the credit union within 12 months, Alessandra reports. That number falls to 10% for members with two services; 5%, three services; and 2%, four services. "The more services credit unions sell members, the more profitable and loyal members are," he relates.
• Exceeding member expectations. This involves first identifying and managing members’ expectations, then monitoring how well you’re doing along the way. "Make it easy for members to complain," Alessandra advises. "The longer you take to resolve problems, the harder and more expensive it is to resolve them."
• Building an emotional attachment. This requires increasing the quantity and improving the quality of communication with members. "The whole concept of loyalty is built around emotional attachment," he says. "Making a sale is easy. All you have to do is overpromise. But you won’t get any repeat business."

Alessandra recommends developing a profile of your best, most enthusiastic members, whom he calls "apostles." These are "raving fans" of the credit union who spread positive word of mouth.

He advises credit unions to write the names of each true apostle, and determine, specifically, what they do for these members that they don’t for other members. Then, write a list of members who could become apostles within 12 months and treat them like you treat the true apostles.

"People do business with people they like and trust," Alessandra says. "That’s where credit unions have an edge. People don’t always base decisions on price."

For more information, call 800-222-4384 or visit alessandra.com.