Creating a Credit Union Sales Culture at Railways

1
Creating a Credit Union Sales Culture at
Railways

• With the help of
• Positive People
• Technology and
• A Financial Incentive Scheme

2
Aim of Presentation

• To tell the Railways Credit Union story
  
• of how we have moved from a reactive order taking
  culture to a proactive relationship building
  sales culture

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Background of Railways

• Annual growth of 15
• 189m asset size
• 16,500 members
• 11.5k assets per member
• Interest Margin 3.0
• Non Int Op Exp 3.0
• Non Int Income 1.0
• Profit B/Tax 1.0

• Pure industrial bond
• FTE Staff 37
• 5.1m assets per staff
• 1 MSC (no branches)
• Actively discourage transactions
• Focus on savings, investments and loans
• No business accounts

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Original StructureBased on Products
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New Structurecommenced 1st Nov 2000Based on
Activity
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PeopleStructure Change What we did

• Worked out the new structure (100 times)
• Allocated our people as either sales or
  processors
• Allocated people to were we thought they would be
  best suited (100 times)

• Actively recruited sales people
• Announced the new structure
• Moved people around as requested and where
  possible (100 times)
• Conducted sales and product training

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PeopleThe Impact following the announcement of
the restructure

• Staff turnover 36
• Staff moral plummeted. Annual staff survey
  indicated that staff moral had decreased from 60
  to 47. Survey conducted by Best Practice
  Australia.

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People Issues How AddressedFollowing the
negative impact of the new structure announcement
to help change the culture we implemented the
following

• changed how our members deal with us .. new MSC
  plus new Call Centre
• physically changed the layout of the office
• changed our corporate colors

• introduced a new logo
• introduced new marketing techniques

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People IssuesHow addressed

• Changed our attitude towards staff .. moved away
  from a spend as little as necessary attitude plus
  invited the staff to work with us
• Improved communications
• Careful recruitment
• Replaced a Team Leader
• Brought in outside specialists to help the team
  understand the new direction and to reassure them

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People IssuesHow addressed

• Improved benefits eg Gym, flexible working
  hours
• New uniforms
• Image Consultant
• Set timetables and stuck to them
• Loyalty bonus introduced
• Across the board pay increases
• Target salaries announced
• Fin incentive scheme promised

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PeopleThe Results

• Moral Staff were resurveyed in May 2001. The
  survey indicated that 71 of employees felt that
  Railways Credit Union is a Truly Great Place to
  work this represented an increase of 24 from
  the response of 47 in May 2000
• Staff turnover has decreased from 36 to 11 ...
  lowest it has ever been.

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TechnologyWhat we needed

• Call Centre
• Sales Management (CRM) System
• On Line Insurance System
• Julianne will present a live demo shortly.. plus
  if you would like a more detailed demo please see
  us during the Conference or alternatively you are
  welcome to visit/inspect our Credit Union

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Financial Incentive SchemeWhy we introduced a
scheme

• To provide everyone with an opportunity to
  increase their remuneration
• To clearly define to everyone what we need from
  them
• To improve the Credit Unions performance

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Financial Incentive SchemeWhat we did

• Researched what other credit unions were doing
• Obtained HR advice plus tax and super advice
• Worked out what we wanted from the separate sales
  and processing areas of the credit union
• Worked out what we could afford to pay

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Financial Incentive SchemeHow much does the
Scheme Cost
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Financial Incentive SchemeOverriding Issues

• Every incentive must be easily measured and
  recorded
• Performance not based on subjectivity
• Incentives for everyone
• The person involved has some level of control
  over the performance

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Financial Incentive SchemeThe Bonuses

• The Loyalty Bonus
• Team Leaders Bonuses
• Sales/Performance Bonuses
• Call Centre Service Bonus
• Back Office Processing Bonuses
• Cashiers Bonuses
• IT Bonus
• Marketing Bonus
• Collections Bonus

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FIS The BonusesThe Loyalty Bonus

• The Loyalty Bonus was established to reduce staff
  turnover that had blown out to 36.
• A cost analysis indicated that every time an
  employee resigned the cost to the Credit Union
  was approximately 5,000 (recruitment costs,
  training, overtime for remaining team members to
  cover whilst short, loss of member knowledge
  etc).
• Following the introduction of the loyalty bonus
  staff turnover has decreased to 11.

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FIS The BonusesThe Loyalty Bonus

• Paid to everyone at 3 mthly intervals regardless
  of employment status
• Bonus starts at 200 and is increased by 10
  every 3 mths i.e. first payment is 200, after 3
  mths next payment is 210, another 3 mths payment
  is 220 and so on until payment reaches 500
  this will take about 10 years

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FIS The BonusesThe Team Leader Bonus

• This bonus was established to promote the
  leadership skills of the Team Leaders
• The bonus is based on part of our Annual Staff
  Survey .. this survey provides a measurement of
  the culture and moral of our people. Survey
  conducted by Best Practice Australia.

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FIS The BonusesThe Team Leader Bonus

• Several questions that relate to Team Leaders
  performance are selected from the survey
• If the Team Leaders performance, as rated by
  their people, is at least 10 better than the
  average from other FIs, the Team Leader receives
  up to 1500

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FIS The BonusesThe Sales/Performance Bonuses

• These Bonuses are payable to our Sales people
• The Bonuses were established on the basis that we
  only pay for the business we want
• The business we want can change month by month
  thus the Bonus can be changed as needed
• Sales are fully recorded by Prosper

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FIS Bonuses paid by CUSales/Performance Bonuses
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FIS Bonuses paid by 3rd PartySales/Performance
Bonuses
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FIS The BonusesThe Sales/Performance
BonusesThe Results
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FIS The BonusesThe Sales/Performance
BonusesThe Results for the 4mths Mar to Jun 2001
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FIS The BonusesThe Sales/Performance
BonusesThe Result for the 4mths Mar to Jun 2001
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FIS The BonusesThe Sales/Performance
BonusesThe Result for the 4mths Mar to Jun 2001

• The highest monthly incentive paid to a sales
  person to date has been 550 but this figure has
  steadily being increasing every month.
• Our 2000/2001 Budget includes an increase in our
  loan portfolio of 20

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FIS The Bonuses - Call Centre Service Bonus

• This Bonus is paid to our Call Centre people
• The bonus is monitored by our Call Centre
  Technology CTI

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FIS The Bonuses - Call CentreService Bonus

• The CTI system records the daily Grade of Service
  (GOS) .. this is based on the time waiting and
  length of the queue.
• If the GOS is gt 85 each Operator receives 7.50
  per day

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FIS The Bonuses - Call CentreThe Result
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FIS The BonusesBack Office Processing Bonus

• This Bonus is payable to our Back Office
  Processing people
• The Bonus was established on the basis that we
  want our Processing people to work as efficiently
  as possible, to operate as a team and to be
  multiskilled
• The bonus is based on the level of man hours
  required for processing each fortnight
• Man hours are recorded via the pay system

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FIS The BonusesThe Back Office Processing Bonus

• If the total man hours worked are no more than
  1056 for the fortnight everyone in the Back
  Office Processing team receives 35
• If the total man hours are genuinely less than
  1056 everyone in the Processing team receives an
  additional 15
• The total of 1056 will stay the same as the
  business grows .. meaning that the Processing
  team must continually improve their efficiency

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FIS The Bonuses - EfficiencyThe Result
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FIS The BonusesThe Cashiers Bonus

• This Bonus is payable to our Cashiers
• The Bonus was established on the basis that our
  aim is to decrease the number of over the counter
  withdrawals and transfers plus decrease the
  number of Cashiers required. (We believe that
  the best person to encourage a member to use a
  cheaper withdrawal service is the person actually
  providing the service.)
• The core banking system is used to calculate the
  bonus

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FIS The BonusesThe Cashiers Bonus

• For every OTC withdrawal or transfer reduction
  from the previous month the cashier team receives
  5.00 to be divided between the team

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FIS The Bonuses - CashiersThe Result
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FIS The BonusesThe IT Bonus

• This Bonus is payable to our IT people
• The Bonus was established on the basis that we
  want to decrease the time any part of our
  technology is down
• The bonus is based on a reduction in the total
  down time of any of our technology from the
  previous week
• Down time is recorded in a log and this log is
  used to calculate the bonus

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FIS The BonusesThe IT Bonus

• If the total down time is less than the previous
  week everyone in the IT team receives 25

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FIS The Bonuses - ITThe Result

• The weekly average down time for every IT system
  in the Credit Union has decreased
• from 3 days 8 hours
• to 1 hour and 22 minutes

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FIS The BonusesThe Marketing Bonus

• Bonus is payable to our Marketing Officer
• The Bonus was established on the basis that we
  want the Marketing Officer to provide a
  reasonably accurate marketing expenditure budget
  and to stay within the budget
• The bonus is based on the monthly expenses being
  within budget
• The end of the month Chart of Accounts is used
  to calculate the bonus

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FIS The BonusesThe Marketing Bonus

• If the Marketing expenses are within budget for
  the month the Marketing Officer is paid 100

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FIS The Bonuses - MarketingThe Result

• The Marketing Officer now has a much better
  understanding of the budgeting and accounting
  process and has taken ownership of the marketing
  expenses
• To date the Marketing Officer has contained
  marketing expenses to budget
• The Marketing Officer provided a detailed
  forecast of the marketing expenses for this fin
  year

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FIS The BonusesThe Collections Bonus

• This Bonus is payable to our Collections Officer
• The Bonus was established on the basis that we
  want to decrease
• the number of loans that are in arrears
• the number and amount of accounts that are
  overdrawn or over limit.
• The quarterly APRA Return is used to calculate
  the bonus

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FIS The BonusesThe Collections Bonus

• If the statutory provision to total loans
  decreases from the previous quarter 300
• If the Delinquent loans to total loans decreases
  from the previous quarter 150
• If the no. of accounts overdrawn or over limit
  decreases from the previous quarter 75
• If the value of accounts overdrawn or over
  limit decreases from the previous quarter 75

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FIS The Bonuses - CollectionsThe Result
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What Next

• We plan to introduce in-house data mining to
  provide leads for our sales team for
  telemarketing
• We are in the process of introducing an afternoon
  shift for our call centre
• We are currently focusing on improving the
  efficiencies of the BOP Team .. by the end of
  September we will have a fully automated loan
  application, processing and approval system ..
  our next task will be to automate the process of
  joining a new member

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Sample Financial Incentives Agreement
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Sample Acceptance of offer for Staff Financial
Incentives to be paid into Superannuation
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Contact and Reference Details
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Contact and Reference Details
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Contact and Reference Details