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At the 2024 NACUSO Network Conference, Nook CEO and Co-Founder Austin Wentzlaff spoke on the conference podcast with hosts Jonathan Taylor, CEO of CU Sol, and Jim Ryan, Vice President of Strategic Partnerships at Curql.
Nook’s Passion: Bringing Back Relationship Banking
Jim started the conversation by asking Austin what challenges he was passionate about solving for credit unions.
Austin mentioned that he’d had many ideas on how to help credit unions, but he was committed to one in particular.
“The thing that I got most passionate about recently and why Nook came about in the last few months is around bringing relationship banking back to credit unions. And what I mean by that is credit unions' core differentiator in the past was that they were very tightly integrated with their members. But over the years, they’ve become a bigger and bigger expanded field of membership.”
Saying that credit unions have evolved into trying to be “all things to everybody,” he feared this would result in a “race to the bottom” of endless competition focused on rates and terms. He said that in the past, credit unions had a tighter bond that transcended the sheer mechanics of banking.
“Before that didn't matter as much since credit unions were always competitive. But what won the business was I know I'm going to get taken care of at my credit union because they love their members. I think the credit unions still have that mindset, but we have to be more intentional about bringing that back because of that expansion of size and also because everything's shifting digitally. What we're trying to accomplish is how do you go back and build a relationship with your members, even though you never really interact with them anymore.”
The Key: Niche Experiences
Jonathan asked how Nook is addressing the idea of member personas. Austin said the key is “niche experiences.”
“The whole idea here and what we came about with as a CUSO is this concept of what we call Niche Experiences. So, the whole idea here is if I can focus on a group of members, a persona segmentation, and I can truly build an experience around them, I'm going to show them that I understand who they are as a person and that I can build a specialized, personalized experience for them. By doing that, they're inherently going to start trusting me on a deeper level. And when it's time to transact, they don't really care if my rate is slightly worse than the next guy; they know they’re going to get taken care of.”
Jonathan asked Austin to expand on the Niche Experiences concept.
“Essentially, what I'm getting at here is with this whole idea of niche experiences, is this group of people we're going to take extra special care of. And the way we're going to do that is by building almost like a specialized brand or subsidiary offshoot of the credit union, which is still 100 percent theirs, 100 percent branded as them. The member knows that it's Dort Financial Credit Union as an example. But then the point of being niche is so that we can focus very specifically on where they're at in life and then talk to them about life.”
More Than Transactions Alone
Austin emphasized that it's about more than transactions.
“One of the big core differentiators for us is that people don't care about finance at all. And they really only care about when they have to, which is like 1 percent of the time. I don't need a HELOC very often. I don't need an auto loan for five years. I don't need a mortgage ever again, maybe. So, in between the time of transactions, how do you build trust and a loyalty relationship with them? You have to talk about life.
Niche Experiences, he said, go beyond simply focusing on the financial aspects of a member’s life.
“If you talk only about products and services, they're going to shut you down by clicking unsubscribe, throwing you in junk, or mentally doing those things. And then you're never going to get through to them ever again because they're just completely disengaged.”
Sales Opportunities?
Niche Experiences, according to Austin, cover a broad range of subjects but can often provide sales opportunities.
“This is a way to provide value to them and say, hey, we want to take care of you. We think you like travel as an example. So, we're going to help provide you with tips and guidance in traveling in your fifties. Should you bring your grandkids on a road trip as an example, you know, things like that that do, by the way, hopefully, sell a financial product or service, because if you want to go on a road trip, you might buy an RV or you might need a new vehicle and boom, we have a product for that, the credit union does. But you're engaging with them for something completely unrelated to what I want to sell them. I call that the selling without selling model.”
Creating a Referral Engine
Jim agreed, saying, “People don’t buy from companies; people buy from people.” Austin concurred and expanded on the idea that the niche experiences approach can result in referrals for the credit union.
“I would say that what we look at from ours is not really designed to be a member acquisition channel yet. We will hopefully get there at some point. But what I think we can do, though, is turn credit unions into referral engines, where I have been taken care of, so therefore, I'm going to go to Jim and say, hey Jim, go to this credit union because they'll take care of you.”
Tech Only Isn't the Answer
Austin emphasized that credit unions need to offer a solid technology package to members but cannot depend on it as heavily as a company like Amazon.
“I think credit unions still definitely need to invest in having the best tech and having a good experience. But I think the member [engagement] element of it is what matters most and always has and should be going forward. You’ve got to look at who we're competing with. So, if they run a negative profit every single year for the rest of their lives, basically, it's because they're taking the Amazon approach, and their investors are happy. Credit unions can't play in that same game.”
Austin expanded on the idea by offering an example.
“Another example that I've been sharing with people is if you had two options with a financial institution, option one is your online application takes three minutes. But you know that that institution is going to take care of you for life. The next institution has an online application that's the fastest around; it takes one minute. But they are never going to do anything in terms of going above and beyond. They're not going to have good service for you. Which option are you taking? I think the answer most people would take is slightly slower but way better service. I think that’s why credit unions have won in the past. If we’re just focusing on the next tech trinket and getting the slightly better mouse trap and the slightly faster application, we’re going to lose sight of the fact that people really don’t care if your application takes three minutes versus one.”
The Value of NACUSO
Jim asked Austin why Nook considered NACUSO to be an important conference for the company.
“I think the reason is that there's a lot of energy here from people who want to solve problems. There are new fintechs that might become a CUSO, and they're all connecting with each other more deeply than you see at any other event. They'll come up to me, and we'll talk about how we can solve problems together. That doesn't happen at a lot of conferences. NACUSO brings this element of CUSOs should also be partnering with CUSOs and solving problems together. So yeah, it's just a different there's just a different vibe about this conference that gets me excited.”
