The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Staying relevant

On November 6th, 2017, posted in: Industry, Uncategorized by

Road sign that reads "One Way" with ArrowSears is irrelevant.  How did that happen?  Cable TV too.  Just this past week, the icon Procter & Gamble is dealing with irrelevancy due to younger shoppers not having the brand loyalty of older demographics.  Wal-Mart is throwing every idea they can at making their online channel more effective.  I can cite fifty more instances where companies did not move with the market and the results were disastrous.  How many strip malls are for sale?  There is only one way that a strip mall became vacant enough to be for sale.  Something changed.  Same for the tenants.  They failed for some reason.  Irrelevancy is the overarching word used most. 

Is Wal-Mart irrelevant?  No way.  Are they less relevant after the emergence of Amazon?  Yes, absolutely.  Do they want to gain in their relevancy given the emergence of the disruptor Amazon?  Every day.  When Amazon enters the financial services industry, will credit unions be less relevant?  Absolutely.  Not day one, but over time watch out.

Think about this.  When credit unions around the country disappear and only a few have financial problems, the question is asked why?  They’re irrelevant to the market needs is the right answer.  “Capital rich failures” seems like a dichotomy of terms until you factor in market relevancy.

SLCCU is relevant and highly successful.  The want to be at a greater degree is always the question. Growth is the best barometer.  Staying on the growth curve usually means that a business has distinctive capabilities from a market perspective.  We are unique, significant, and have strong talent in at least some sectors of the market.  Congratulations to us.

Fighting to stay on the growth curve is where the word relevant enters the discussion.  Growth is always the overarching objective.  Macro-factors change constantly.  The continuous nagging question to all leaders of all business remains, “are you relevant to the changing marketplace?”  That becomes the rub.

Businesses pick and choose their levels of relevancy.  As an example, in affluent St. Louis County (where there is an over-subscribed banking community…credit unions too), SLCCU is irrelevant to a majority.  We made a conscious decision not to enter that market.  Relevancy is one of those words that has better understanding when one knows their target market and growth plan.  SLCCU does.

As an example, SLCCU made a strategic decision to serve low-income communities because it’s the right thing to do.  How are we relevant?

  • We have a $1 primary share.
  • $300 minimum on CDs at jumbo rates.
  • Substantial appetite for risk-tolerance in loans and savings instruments.
  • No qualification barriers to account availability.
  • Branches in severely distressed communities within the urban footprint.
  • Lots of branches due to the cash-based world in which low-income communities function.
  • Branches (15) on bus routes with a bus stop within a block of all locations.
  • 49 cent money orders.
  • $18 courtesy pay/nsf.
  • Workforce hired from the communities we serve.
  • Office sites used as food distribution centers for kids during summer months.

I could go further…you get the idea.  We are extremely relevant to our chosen target market.  BTW, we’re good for everyone, but have chosen a primary market rooted in geography and economic strata.  Our secondary market is socially responsible, more affluent consumers who support our efforts.  Our tertiary market is everybody else.

For fun, I looked up the definition of relevancy… “Related to the matter at hand, i.e. pertinent, appropriate.”  Guess we are.  Thanks to our members’ support.

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