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Southwest Lending Conference: Boost Your Lending and Ancillary Income
Thursday, May 19, 2016 6:20 AM

During a Thursday afternoon breakout session at the Southwest Lending Conference, Mark Schultz and Galli Davis of ASG Results discussed how to boost your lending and ancillary programs. In their session, "Five Things Costing You Loans and Ancillary Income," they detailed the five things that might be costing your credit union.

  1. Your organizational alignment may be out of whack.

    Do you have true salespeople working for you? True salespeople are essential and worth every penny. Don't bury them in paperwork and diminish their productivity when they need to be doing what they do best—selling and making money for the credit union.
    Do you promote from within or recruit from the outside? If your policy is to promote from within, then when you interview new hires, always look for sales abilities in them. This will ensure that if and when they do move into sales positions, they have sales abilities.
  2. Your training may not be consistent or effective.
    Ensure your staff is thoroughly trained in person. Make it minimum 3-4 hours of dedicated lending training: repeated, intense, role-playing training per month—not by email or occasional webinar.
    Share your success stories in sales and ancillary services with your entire staff so they will understand the value of the lending program and how it really helps people. This includes sharing information about claims that have been paid for your members through the ancillary programs.
  3. You may not have an incentive plan that attracts and retains top salespeople.
    Utilize a success index and tolerance. Use the success index to identify weak spots and train accordingly. If the success index continues to lag below pre-identified minimum goal, it may be time to insert a better player into the position.
    Pay incentives monthly, not quarterly. If you're paying quarterly, your system is too complicated. Simplify, and pay good people well or they'll go elsewhere.
  4. Your policy and procedures may need to be streamlined.
    Credit unions should be built around streamlining and supporting the lending program. Make sure you allow for flexibility where needed. Make sure your process is a clean assembly line and virtually paperless. Give your members an answer in 20 minutes or less whenever possible.
    Gather your team and explain policy changes in person, not by email. Seek input from your team in relation to changes that would effect more streamlined procedures. Offer rate discounts for ancillary products and extend terms up to six months for more whenever possible.
  5. You may be afraid of high-risk paper.
    Start with direct, secured loans. Remember high-risk members need a vehicle as well, and high-risk members will be very loyal if you help them. Gear up collections before you start lending to higher-risk paper.
    Train, train, train regarding a proper loan interview. Collect immediately and aggressively with high-risk paper and stop asking for 20 percent down from higher-risk members; they don't have it! Instead, start teaching the member to get the dealer to concede on price.