Tuesday, December 26, 2006

Points for All? We'll Pass For Now

As I mentioned last week, we had a very nice marketing consultant come in and give us some advice on growing our credit card portfolio. One of the things he suggested was to put travel points on all of our credit cards.

His logic is sound enough, I guess. If you look at our VISA card that offers points, it is doing far better in all categories than the other cards in our product line.

I don’t thing giving points to everyone is wise. Here is why:

1. I am worried about point inflation: Twice The Economist has noted that there are more points in circulation than there are dollars in the U.S. economy. Many leading economists believe that inflation is caused by the increase in the supply of money. This theory could hold true for points too, couldn’t it? I mean, if I wake up one day and find that I have a billion points on the books, wouldn’t it make sense for me to raise the cost of each travel redemption so I don’t end up losing my shirt on my points program?

I don’t want to come to a place where we must charge members one million points to get to Spokane.

2. I am worried about a run on the points. When I look around, I see many indicators that travel costs will continue to increase - - rising fuel costs, failing airlines (loss of competition), increased security costs, and climbing demand. There are not many foreseeable reasons for this trend to change. The price per ticket for the credit union has already gone up twice in the past two years. I predict this will happen again.

Here’s where things get a little complicated. You see, all points programs rely on the fact that a majority of people will never redeem their points. However, it seems to me that if airfare continues to sky rocket, people are going to start remembering they have points and taking the time to figure out how to redeem them. Suddenly, the logarithms we have relied on in the past are not going to be correct anymore.

For these two reasons, I want to make sure that the people who are currently in our points program are there because they are actively using their card to rack up their points and they are committed to redeeming them. That is why we have a $35 annual fee and why we expire points. These two things make sure that members self select into the credit card program that is right for them and they pay attention to the program when they are in it.*

I want to avoid giving points to members who don’t notice or don’t care. I still have to accrue those points on our balance sheet, whether the member wants them or not. I also think points are a bigger liability than most institutions realize.

I am actually a minority in this line of thinking. Many institutions are adding points to their debit cards and giving points for other relationships (open a CD and get 5,000 points, for example). Believe me, we revisit this topic often. But for now, we are taking the conservative route and keeping our points on our VISA Journey Scorecard only.

We are however, looking at some other incentives for our debit/credit program that I think our members will LOVE. I can’t say much more than that, but watch for some good stuff in 2007.

*It also helps offset costs and plan for redemptions more accurately.

Thursday, December 21, 2006

Do you work with someone like this?

Being in HR I get the opportunity to talk to both external canidates and internal staff about what they like about their job. One of the most common things people that like their job mention is that they work with great people. The winner of this month's Exrodinary Feats Award is one of those individuals whose willingness to help makes everyones jobs easier. Just read this nomination that was sent in:

Kathy came in Friday (her day off) just to say hi. As she entered the branch she noticed that it was just Christina and I and that we as a branch were short on a GSA and Military payday (one of our busiest days). Kathy, without even asking if we needed help, logged into her computer and pulled a drawer. This went a long way in helping our members in a timely manner. Kathy stayed the whole evening and everyone, members and staff, were very thankful for her presence. I also asked Kathy if she would be willing to help out on Saturday since we were going to be short handed again. Kathy, without hesitation, offered to help. Kathy has always expressed great team dedication and this weekend is one of many ways she has shown that dedication.

Do you work with someone like this? If so I bet that you enjoy your job.

Tuesday, December 19, 2006

I Just Can’t Do It

Last week, the business development consultant from our credit card processing company paid us our annual visit. Every year, they come out and give us suggestions for growing our credit card portfolio.

The fellow was very nice. I feel a bit bad for him. He and I disagreed on a few points and I can be, well, passionate about some topics.

The two topics on which we went toe to toe were Platinum and Points. I understand his position, I do. When you look at our portfolio, our Platinum card and our Journey card (the card with travel points) are doing much better than our Classic, our Credit Builder and our Cascade card. There are several examples of credit unions that converted all of their cards to Platinum and saw an increase in usage. There are several credit unions that put point programs on all of their cards, including debit and saw an increase in usage. These are two things that are hard to argue with. But let me try…

Platinum for all –

So awhile back, VISA lifted all restrictions on Platinum. Now, any card issuer can give any consumer a Platinum card (I didn’t just tell the world there is no Santa, did I?) So we could, technically, give the 18 year old off the street, or the member with terrible credit a Platinum card.

Right now, the Platinum card itself has no added benefit except prestige (this – please note – it not the case with Verity’s card. I’ll explain later). I asked the consultant if anyone in the industry was worried that if we give everyone Platinum, then it would no longer be prestigious. He said then we give the Platinum people Titanium. Hmmm…

I tried to picture myself sending out 11,000 mailing pieces that say, “since you are such a great credit card holder, we are changing your credit card from orange to Platinum.” It just doesn’t sit right with me.

Maybe I am old fashion, but I like the fact that our Platinum card is more difficult to qualify for. You have to have a better credit history, a good income and to have been wise with your finances. I also like the fact that we aren’t just giving prestige with our Platinum card. It comes with lower rates and higher limits. (which one may argue is why it is outperforming our other cards – wait, I did argue that.)

I asked the consultant if they had used the data gathered from other credit unions in a regression analysis – you know, to see if it was actually the color of the card that spiked usage or was it the rate, the additional marketing or some other factor. They had not.

I thought about what would happen if I sent all of our Credit Builder folks this “You now have a Platinum card” mailing. I don’t profess to know a lot about Gen Y, but it seems like their reaction to a communication like that would be apathetic at best and annoyed at worst.

I don’t know. Changing the color of our cards to a more prestigious color just doesn’t seem like the best use of the credit union’s money. So for right now, I am going to leave them like they are.

If you want a Platinum card (and I would highly recommend it, because, by the way, it comes with a Passport logo which gets you two for one dinners at hundreds of upscale restaurants in our area), then apply for the real Platinum. You’ll get a better rate, a higher limit, and what the heck, some honest bragging rights.

Tune in tomorrow when I take on Points…

Saturday, December 16, 2006

We've got the power!

We are pleased to announce that power is back up at Verity so all phone systems and remote services (Home Banking, Telephone Teller) are now available.

Branches that are normally open on Saturday will be available for their regular business hours today.

A special mention for Home Banking Users: If you were expecting automatic ACH deposits in your account yesterday, we were able to process them normally. However, if you had automatic ACH debits scheduled yesterday, please note that they did take place, but you may not be able to see them in your Home Banking account register. The power outage caused our main system and our Home Banking system to go out of sync,so some transactions (ACH or not) may be missing from your view. If you have any questions, please call a branch at (206) 440-9000 or (800) 444-4589.

Thanks to our members for your patience! We hope that everyone has weathered the storm and is warm and safe this weekend.

Friday, December 15, 2006

Power Up, Power Down

Electricity was finally restored in the early afternoon, enabling us to power up our systems. Unfortunately, the electricity went out again shortly thereafter. We are hoping that it will return this evening.

In the meantime, Home Banking remains in stand-in mode (see earlier posts below for details.) All branches will be open tomorrow for regular business hours.

Stay tuned for further updates on this blog and on our website.

Power Outage Update

Add the Alderwood Branch to the list of branches open for business today. The Northgate branch is still closed.

Members are encouraged to get cash at any of the ATMs in our network. Call 888-SITE-COOP (888-748-3266) to find one of the 20,000 ATMs on our member network. Using any phone, callers simply say a street address or cross street to find the nearest location-- whether its 100 feet or 25 miles away.

Or click here to find a shared branching location near you.

Another option for getting cash is to use your debit card when making a purchase at the register. Just enter the amount you need and it will be added to your final purchase amount.

Power outage at Verity

A major windstorm swept through the Puget Sound area overnight, causing power outages along the I-5 corridor and in outlying areas. Verity was no exception.

Our Beacon Hill and Federal Building branches are open. Our other branches are currently closed due to lack of power.

The following services are unavailable or have limited availability:

  • Our phone systems are unavailable. You will be unable to contact Member Services or our branches at this time.
  • Home Banking is in stand-in mode. You will be unable to see real-time balances. You will also be unable to make real-time transfers between accounts. Bill Payer is available to schedule payments, but it is in stand-in mode as well. ezCard is available, so you can view your credit card information and schedule a payment.
  • Telephone Teller is unavailable.

We are working to restore all systems and to get our other branches open for business. Please continue to check our blog and website throughout the day for updates.

Wednesday, December 06, 2006

Fruits of Our Labor

Recently Verity was chosen as a winner in several categories for the 2006 People’s Picks awards! This is an annual award hosted by NWjobs.com, and is designed to acknowledge top Northwest employers.

Being a representative of Verity’s Human Resource department, this award is particularly exciting. Why? Essentially, winners are chosen based upon submissions by individual people. Verity was competing with the likes of Starbucks, Premera Blue Cross, Microsoft, and others. It’s extremely satisfying to know that our employees think highly of Verity. It brings us a step closer to achieving one of our Vision Statements: “Verity will be one of the 10 best places to work.”

We have employees who are talented in their work and dedicated to the credit union industry. Whenever we get the opportunity to showcase our company culture it generates positive feedback from employees, members, and the general public. In my function as a recruiter for Verity, I speak to many individuals who want to work for us just because they have perceived Verity as a great place to work. It makes my job a whole lot easier when people are already excited about our company; and I wear my passion on my sleeve when it comes to credit unions. I may be biased, but Verity is a great place to work!

My hope is that this kind of recognition is just a sample of things to come. We take our commitments very seriously, and will continue to work hard to earn the title as a best place to work. Thankfully, I’m surrounded by like-minded individuals. Together, we create the synergy that is Verity Credit Union.

Check out the details at: http://marketplace.nwsource.com/job/peoplespicks/2006/

Sunday, December 03, 2006

Heart of the Game

A few weeks ago, we (Verity Credit Union) treated a roomful of our investment services clients to a dinner and presentation by Bill Resler.

If you haven’t already heard the hype – Bill Resler is the UW Accounting professor turned high school girls’ basketball coach who was featured in the documentary Heart of the Game. Bill is also a good friend of Dave Nelson, on our Investment Services team.

The documentary follows the Roosevelt Roughriders girls' basketball team for six tumultuous seasons capturing the drama and exhilaration of youth and the inspiration of a passionate coach whose lessons of self-esteem, confidence and compassion go far beyond the court . . .
(excerpt from the official website)

I have not seen the documentary and I am not involved in local sports well enough to completely understand Bill’s local reputation, however, his presentation was amazingly engaging and interesting. I think I can safely say that everyone there was mesmerized by his stories.

One of my favorite stories was about when he went on the movie release tour with Darnellia Russel and Chris Bridges (know to most people as Ludacris). Ludacris narrated the documentary. When they were being prepped for an interview on CNN, they set Ludacris in the middle – arguably due to his ‘star appeal’. He, however, insisted that Darnella sit in the middle, because, as he put it, ‘she was the real star’.

After getting to know him a little better, Bill admitted to Ludacris that he had tried to listen to his music, but it was too violent and misogynistic for his tastes. He asked how such a good guy like Chris Bridges could have such a thug alter-ego. Chris explained to him that the money he makes as Ludacris allows him to give back to his community – like narrating a documentary on girls basketball.

There is rumor that Heart of the Game is going to be nominated for an Academy Award. I think that anything that promotes Title IX and equality for girls is a good thing.

I also think we should all go buy the movie. Whenever we have greatness amongst us – be it in film makers, coaches or basketball players, we should do our best to support it.