Next-Level Growth: Breaking Down Credit Union Sales Barriers

In this episode of our Next-Level Growth series with Cornerstone Advisors, Teachers Federal Credit Union’s Jay Fee discusses breaking down the barriers to a modern credit union sales culture. They explore how shifting from a product-focused to a member-centric mindset—supported by the right technology and leadership—allows credit unions to compete with big banks, drive ROI, and provide deeper value to their communities.

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Transcript

Elizabeth Gujral, Cornerstone Advisors (0:06):

Hello everyone. Thank you again for joining us today. So, today we’re going to be discussing a critical lever for growth, which is breaking down the sales barriers. And I know that sometimes “sales” can be a kind of a dirty word in credit union world, but it really at the end of the day, it’s about breaking down the friction, removing friction, and helping people discover and understand and adopt products at our institutions. And it really is truly a critical lever to help accelerate growth.

And so, with me today to discuss this very topic is Jay Fee, who is the Senior Vice President of Consumer and Commercial Banking at Teachers Credit Union New York. So, Jay, thank you so much for joining us today. And before we jump in and I pepper you with a bunch of questions, I would love to hear about your background, how long you’ve been at Teachers, and really what your role entails.

Jay Fee, Teachers Federal Credit Union (0:57):

Yes, it’s a pleasure to be here. Thank you very much. Yeah, so, I’ve certainly had a few rodeos in my lifetime, started off back at Navy Federal way back when. I won’t say exactly when, but suffice to say it was before the turn of the century. And actually got to a point where I was actually running auto lending and some of the consumer banking pieces at Navy Federal.

And at that point, it was kind of the dot-com, the beginning of the huge internet push. I’d been also developing a lot of the lending systems for NFCU at the time. And had the opportunity to go out into the new internet world, and partly some of those things to actually develop large B2B, B2C networks that did auto financing, sold auto parts. I ended up running sales at Keystone Automotive, actually ran a dot-com called VarsityBooks.

And then migrated over to the Volkswagen world, where I ended up running dealer relations, and managing through a little thing called Dieselgate. And left that, and then parlayed that into starting a company named Caribou, a guy named Nigel Morris, who helped start Capital One, plucked me out of Volkswagen to basically build this company that started off as MotoRefi. And then I left right before it went to series A.

And joined Pentagon Federal, PenFed, and ended up running all of the consumer originations there, and then collections and servicing. And decided in my golden years, I’d do it one more time here at Teachers. I just joined Teachers about 90 days ago. So, fresh in the saddle here, but it’s a lot of doing, employing a lot of things that I’ve done over my career, here.

Teachers is a great opportunity. We have an employment charter, a state charter, a geographic charter, where we actually can originate around the country. And we’re doing a lot of exciting things here. Got a great management team led by Brad Calhoun, CEO. And we’ve got a great vision of what we’re trying to do, and very excited to take some of these technology pieces, develop a more of a sales culture in what we’re doing here. Albeit, there’s been great strides here already done way before I got here. And really kind of take it to the next level here, at least where the consumer lending originations.

Elizabeth Gujral, Cornerstone Advisors (4:15):

So, fresh in the saddle at Teachers, but not fresh in the saddle when it comes to actually sales. So, this is definitely your wheelhouse. So, this is kind of a broad question to get us started, but if you had to pick just a couple things on, in your experience what you’ve seen over the years, what are two, three of the biggest sales barriers that a lot of community financial institutions typically face today?

Jay Fee, Teachers Federal Credit Union (4:37):

Yeah, so one of it’s culture. I’ve had the blessing of certainly seeing all sides. I got involved with the sales culture even before I started at Navy Federal, and then went to Navy Federal actually when I was going to school, and Navy Federal was just supposed to support me while I was going to get my MBA. But was able to bring some of the sales background that I had early on to Navy and then ended up running sales for Keystone Automotive, and then was able to parlay that by going to Volkswagen, which is kind of a sales organization for Volkswagen Global, it’s selling the Volkswagen brand and cars in the US.

Then, of course, MotoRefi, is selling refinance, refinancing options. And at PenFed brought that culture there, and now I’m bringing it here. And so I’ve seen it on the dealer side. I’ve seen it on what happens actually at with all of a jobber that sells auto parts. I’ve seen it for the consumer side, member side, I’ve seen it well when you’re Volkswagen credit was a captive auto lending side. I was in charge of dealer relations. So, I’ve seen it from a dealer side.

And so, when you take all of those different journeys and those different parts of the cycle, you’re able to kind of really kind of understand what the barriers are. And one of the biggest barriers of course is culture. And so, you can’t change culture overnight. Culture generally is an outcome. We’re all a product of our own personal journeys, and I think at credit unions, “sales,” as you said, is kind of a dirty word. It’s been kind of co-opted into a word that means manipulation of some kind of sort, which runs complete counter to kind of the thesis of a credit union.

Credit unions are supposed to be highly ethical, non-profit driven, and member-centric. So, sales in its purest form is not, is completely aligned with that, and it’s not manipulative. It’s supposed to mean that you bring awareness of the best value options to a member, and you’re laying out those options to let them decide if they have value in it.

I think the struggle we have with the culture that’s in credit unions is we don’t have all of the, we don’t have hundreds or millions or billions of dollars of technology budgets like Bank of America and the other big banks. Our technology options are limited. So, that means our ability to display our products and reach our products and create that type of awareness is limited.

It also all of those back-end products that you use to try and develop a pure sales culture, which is giving all those tools to our folks in contact centers and the retail centers, and then also the digital presentations that we give to our members. It’s limited because we don’t have those big budgets. So, we fall into traps because we don’t have those tools, and it becomes a perpetuating problem that doesn’t allow us to change the culture as much as we would like.

Elizabeth Gujral, Cornerstone Advisors (8:13):

And would you say too that if a credit union is or a financial institution is going to be investing in these technologies to help support sales culture, these new LOSes, so be it. If you don’t have the culture behind it to really drive the adoption of those products, then it’s kind of a, not wasting a credit union’s money, but it’s you’re not going to see the same ROI.

Jay Fee, Teachers Federal Credit Union (8:33):

You’re not going to see the same ROI. It’s going to take longer. The results will be mitigated. And sometimes you just fall into this cycle where you have a system and it’s half configured. The system may actually do the job, but if the management isn’t there, or if you’re not able to spend the amount in terms of customization or training, and the budget is limited, you can only get so far.

Elizabeth Gujral, Cornerstone Advisors (9:08):

Yeah, and do you think that the technology limitations or the cultural limitations can impede financial institutions really trying to go after the younger consumers as well, the Gen Zs, the Millennials? Like, do you think that these younger generations experience different friction or pain points within the sales processes compared to older generations? Or do you think they’re yeah, different expectations?

Jay Fee, Teachers Federal Credit Union (9:32):

It’s interesting, so, I’m a bit jaded because, you know, I was the golden boy, 30 years ago, trying to convince everybody to use technology. I remember one of my first projects at Navy Federal was trying to get people to use ATMs. People would stand for 2 hours in a teller line on military payday to cash their check because they didn’t trust the ATM to actually go to the ATM and deposit. We’d actually have to walk people over to the ATM and then, help fill out the form, and then show them where to drop it in the ATM, and then how they can then get their money actually out.

And it was funny because we would do that and then over time, over the course of weeks, or maybe 2 months, the line would grow and grow at that ATM at the place we’d done the training, because teach a person to fish, and they started doing that. And so, what I found with that process is that it was the boomers now that were they were a little bit reluctant, but the boomer’s parents would, it was really hard to get them to go there.

The Gen Xers don’t seem to have that. They seem to have had enough. They’ve been through, they saw the internet kind of happen in the ’90s, and they were part of that. So, they’re much more adoptive of technologies and much less technology averse. Now, of course, they’re still the same people using exclamation points in texts and all the other texts and stuff that the millennials and everybody else laughs about.

So, but the adversity, I think, to technology, you can still train the Gen Xers, so it’s not kind of the same barriers that you had necessarily 20 years ago with people adopting technologies. Sometimes it’s getting them to give up the technologies. I mean, for God’s sakes, AOL just turned off their modems like, I think it was last month.

So, those, some people were still holding on to those things. So, there’s still, I think, that reluctance to change technologies, but we’ve created a different culture now where people will trade in their iPhones when the battery’s dying, and that sort of thing. We’ve created tricks within the program to get people to actually, to change technologies.

Elizabeth Gujral, Cornerstone Advisors (12:13):

I think you’re touching on something so important that when it comes to breaking down sales barriers, it’s really, it is more than just culture. It really is about and it’s more than just training your staff of how to speak to products, how to upsell products, how to cross-sell products, but it really is if you do not have the tools in place for the staff to use to really enable efficient, seamless sales processes, whether that’s directly member engaging or online digital, then it’s gonna really just cause some hurdles in uptake of new products, which is a big hindrance to growth.

So, my question for you now is, do you see more friction in sales, breaking down those sales barriers on like the contact center side, within the branches themselves, or do you see a lot of more friction on digital? Which do you think of those three channels?

Jay Fee, Teachers Federal Credit Union (13:04):

Yeah, I definitely see more friction in the digital experience. And I think it’s, some of it is just we’re entering a stage now, especially with AI, where there’s kind of a concept of, well, we could just build that with technology. And I’ve seen that over time where like people are like, oh, we could just design an auto app. It’s not that different from a credit card app.

And, okay, great. So, the people that are really good at technology think they can build something, but if you don’t have the right SMEs behind it, then yeah, you can build an app, but do you understand what’s gonna happen if you don’t employ what the SMEs know within the process? And so, you end up developing technology that has a lot of friction in it.

And then, and then if it’s a full big baked launch, then it’s launched, and then it takes literally another year, year and a half before you can take the friction out of what you’ve just built and launched, and you actually have an operable product. And so, I’m starting to see that more and more, and then AI is only going to exacerbate that because it’ll make the builds faster, but the whole kind of, do we get all the requirements correct and the testing and all that is going to, everything gets faster. That’s the cycle of digital is what used to take a year to build, now you can build in 3 months.

Elizabeth Gujral, Cornerstone Advisors (14:47):

At the same time, I think where you’re going with that is I think it means it’s also faster to fail. Yeah. So, what kind of technologies or actually let me back up. How do you really view AI then, building itself into breaking down sales barriers, or really making sales more efficient? Where, what’s your dream vision for AI?

Jay Fee, Teachers Federal Credit Union (15:10):

The well, the first thing is that AI is so misunderstood. I mean, I remember programming stuff back in the ’90s with something that was called fuzzy logic. And this was before Google existed. And all fuzzy logic was was trying to take decisioning, and basically say, look, these are the manual processes that you’re going through, and you really don’t need to do the manual processes. 80% of this can be done based without any type of person trying to sit in decisioning. You can just do it with if-then statements.

Flash forward, then you have Google, which is really kind of a form of AI. Early AI. As you move into the different definitions of AI, and how it’s kind of splinted off, there’s so much that can be done with it. But it’s taking the use cases and doing it in sequence. And too much of what I see people doing is is they haven’t perfected their digital processes, and they’re trying to jump full straight into AI, and they’re skipping, it’s like, for God’s sakes, fix your loan process before you go and start taking and saying, oh, well, let’s use AI to to decision all our applications. That’s getting the cart before the horse.

Elizabeth Gujral, Cornerstone Advisors (16:42):

Yeah, that’s something we’re seeing at Cornerstone too is institutions looking to just kind of slap AI on as a band-aid for poor processes instead of like, no, we actually need to fix the root of the problems before we start adding on these extra capabilities.

So, what kind of, so besides AI too, what other product or like internal technologies do you see institutions adopting that can really help them solve and break down these sales barriers, like I’m thinking a CRM, new digital account opening, anything like that?

Jay Fee, Teachers Federal Credit Union (17:14):

Yes, so, I mean, I think we should, I hate to be the old guy going back and talking about the fundamentals, but it all starts with, okay, do you have basic reporting in place? Then have you documented your member journeys and your basic requirements? Then, okay, great. Let’s, do you have a CRM in place?

Then, applying it to banking, are you still trying to be a product bank, or are you trying to be a full-service bank where you’re trying to actually gain primacy and you’re doing that by employing strategies that are supported by the data that you’ve captured in your CRM that is also an outcome of your segmentation and what you’ve built with your member journeys?

Then have you then tried smart decisioning? And create smart decisioning with your collections, lending, contact strategies. And then at that point, that’s where you can start, putting real AI in. Because then the AI then is just it superimposing itself on top of those smart decisioning strategies, and it’s supplementing them, and then it’s creating things that you can take to a whole different level, where you can start making decisions based on the way that the data could be read in ways that we can’t process.

Elizabeth Gujral, Cornerstone Advisors (18:37):

I think that’s fair, and I think you can also say like garbage in, garbage out when it comes to CRM, and probably especially more true when it comes to building AI.

Jay Fee, Teachers Federal Credit Union (18:44):

Exactly, and it all starts with the data. Yeah. But too often we’re building AI on bad data, so

Elizabeth Gujral, Cornerstone Advisors (18:51):

Which can lead to just a myriad of problems, so that would require a whole other interview and topic for us. So I want to go back to the cultural aspect. But how do you, or how have you in the past, or how do you recommend to other credit unions that might be struggling with this of how do you get them to build out their training programs, build out their culture for staff to become comfortable with, you know, that dirty word of sales, and helping them really understand that it is about removing friction and helping create like these member-centric journeys? Where do you start with when you’re trying to change culture?

Jay Fee, Teachers Federal Credit Union (19:28):

Yeah, I mean, it starts with leadership, and making sure that everybody’s bought off on it, and then everybody understands what you’re trying to do. I mean, “sales” is a dirty word but can also mean anything. In my mind, it’s, there’s suggested selling. And suggested selling is nothing more than you give people tools to have a conversation and create awareness for your products.

So, you know, it’s not giving somebody a phone book and saying, “Go start calling these people and start selling, selling our product.” It’s, “No, here’s the products we’re trying to sell. Here’s the prompts.” And AI is great for creating those types of scripts, and you know, we talked about bots. So, it can certainly do it for human beings, but you’re getting some of those tools in place, creating suggestive selling programs and tactics, creating your own, information, knowledge bases, creating lead referral, then showing people the processes that you’re trying to do, which is, mimicking is the best way to learn.

So, if you show them how to employ these things, how to use these things, it takes a lot of the fear out of it. I mean, fear is the driver here with sales generally, because people are like, oh, well, I’m an introvert, I’m not good at that. I’m not good at doing that. Like, you talk on the phone all day long. All we’re talking about doing is basically talking to people and giving you the but giving you the information to support it.

But gamification is a big huge thing, a strategy for employing it, trying to just employ things with, “Hey, we’re going to bring in a sales company, and we’re going to create a training program, and we’re going to coach them up, and then the people that don’t, that can’t sell, then we’re going to replace them” is that I mean, that’s kind of like 1970s thought processes.

There’s all of these things like suggestive selling, lead referrals, mimicking, gamification. Have your seasoned folks only doing really the complex selling, and for that complex selling, break it into a strategic selling process, which, there are different types of sales. So, and there’s a whole science behind it. So, but usually it’s not necessarily employed or understood.

Elizabeth Gujral, Cornerstone Advisors (22:06):

Yeah. But I like what you said at the beginning where, and it really is about starting with the leadership for them to say, “This is what we’re doing. This is why we’re doing it,” creating some gamification, some incentives, and really helping your staff feel comfortable with having those like extra conversations.

And you’re right, contact center staff, branch staff, they’re on the phone talking to members all day long. So, if you give them the right the tools, the scripting, maybe the ex the technology prompts that can show up in a CRM or in your core to say, “Hey, this person is pre-approved for a credit card,” or anything like that, just anything to help them get started and feel more comfortable, I think is what you’re saying is one of the best ways to start enabling that sales culture.

Jay Fee, Teachers Federal Credit Union (22:47):

And you touched on incentives. I think that’s one of the bigger problems that also credit unions have when they start, doing a journey that really kind of really starts creating different incentives. Obviously in banking, some of the banks have run a foul because the incentives they put out there are put out there without the profit controls in place, they’re kind of out of control, and then you get what you incent.

So, you’re having people actually doing things that they shouldn’t be doing because of that incentive. But if you have leadership bought off on it from the beginning, and you understand that, okay, you need to create an incentive that’s not so lucrative that it drives different types of behaviors, or it’s not profitable.

But it can’t be so low that what happens is as soon as the people really learn it, they’re sitting there going, “Well, I’m making the company tons of money. You’re not really paying me for it.” So, then I’ll go over next door and go there, and and and they’ll hire me because I’m the top seller.

Elizabeth Gujral, Cornerstone Advisors (23:59):

For on the flip side, too, what we’ve seen when institutions are looking to revamp or design an incentive program for sales is if you put too much pressure on staff, on frontline staff to sell, you make it like too much a part of their like you might say like, this loan amount like this X in loan originations, this number of new applications, and it’s if it’s not actually truly achievable or realistic, then that creates a lot of internal animosity as well, where again, someone might go, oh, I can make the same amount of money and go over here and do the same thing.

So, yeah. So, one of my last questions for you, Jay, before we wrap up is it’s a magic wand question. So, there’s no wrong answer. But if you could eliminate one systematic sales barrier for all credit unions, all financial institutions, all community financial institutions out there, what would it be?

Jay Fee, Teachers Federal Credit Union (24:49):

Technology. So, yeah, so, if we could have the same technology tools that, fintechs have, that the big banks have, have the same banking platforms, the same marketing tools, then I think you would be able to bring the people over with the the skills to operate them, and then can compete with them.

And, credit unions, we’ve got the rates, we have that culture, we have the affinity with our members. Our NPS scores are two and three times what banks are. And so, and we’re not we’re not trying to drive shareholder wealth, dividends. And that’s where the thing we’re incented in different ways.

So, if we had the same playing field with technology, then that would do that. But that’s why you got to pick your vendor partners well. You got to, have make sure that you’ve got that laid out, in a good road map, and that, what you’re not overspending on the technology, but it’s also employable and it can deliver to you results within a year.

Elizabeth Gujral, Cornerstone Advisors (26:14):

I think you’re completely right, and hit the nail on the head. It’s really about we don’t have the budgets of the Chases or the Bank of America, so it really has to be about smart, strategic decisions around our technology, around our people, around our culture and our processes.

So, all right, last question for you then, Jay, what should I have asked you? Anything, any parting words of wisdom for other institutions looking to break down their sales barriers at their organization?

Jay Fee, Teachers Federal Credit Union (26:44):

So, it would probably be, what is the number one lesson that I’ve learned over my time. And if I’m gonna answer that, I’d say, fail fast. Yes. So, if you’re going to fail, do not do not draw it out. So, doesn’t mean, make bad decisions in terms of deciding to move forward. If that way you’re when you’re going there and things aren’t working, you need to fail fast.

It doesn’t mean failing doesn’t mean that you stop. Failing sometimes means that you’re, that you have to pivot. And pivot needs to happen quickly because if you wait till, till it’s failed, and everybody’s putting dirt on the coffin, then, you’re not gonna have a long career. You’ve got to recognize when things are not working, and then be flexible enough to pivot.

Elizabeth Gujral, Cornerstone Advisors (27:54):

So, don’t be afraid to fail, be flexible, be smart about your technology investments, and really bring your frontline staff, your people along when it comes to breaking down sales barriers for culture. So, Jay, thank you so much for your time today. We very, very, very much appreciate it, and we’ll talk to you soon. Thank you.

Jay Fee, Teachers Federal Credit Union (28:13):

Great. Thank you. Have a great day.

Elizabeth Gujral, Cornerstone Advisors (28:16):

You too.