The theory of marketing relativity podcast.

Jess
Hello, and welcome to the theory of marketing relativity podcast. I'm Jess Burton, a marketing specialist here at Epic Marketing Consultants Corporation. Let's talk all things marketing and merchandising with our Epic team. Today, we are here with Verity credit unions Chief Marketing Officer, Heidi Cleveland. Thank you for joining us today, Heidi.

Heidi Cleveland
Thanks for having me. I'm really excited. I love working with you guys at Epic. You're amazing. You have helped Verity so much I couldn't live without you. So I'm pleased to be here.

Jess
Oh, well, I'm sure Nancy will be happy to hear that. We have so much fun with you guys. You guys are definitely, when we like rank, we don't, we don't technically rank our clients as our favorites, but you guys are definitely up there high on the list.

Heidi Cleveland
We definitely keep you busy. That's for sure.

Jess
Absolutely. It keeps life interesting, right? Yeah. So you guys are a little bit different from some of the other people that we've interviewed where you guys are over on the west coast. So right now you guys, you guys were you're in Seattle, you're the first ones to get hit with the pandemic. You, you know, we're the first ones to kind of deal with all of the Black Lives Matter protest. You're in the midst of fire season. I guess that's what that's what it's called over their fire season. Yeah. Yeah.

Heidi Cleveland
It's never a dull moment in Seattle. We have a little bit of everything, but a lot of it is good stuff too. I mean, the community's really involved and cares about people and that's why we have so many protests here is because people just really are outspoken. So it's a great place to be. But it's a very active place to be these days too.

Jess
Absolutely, so talking about culture, you guys have this great set of values that you put forth. For your credit union, and how do you kind of use those values? How do you instill those values in your employees and within your internal culture?

Heidi Cleveland
You know, it starts from the very top and it starts from the very beginning. I remember when I interviewed for my CMO position with John Zmolek, our CEO, and with our Chief Operating Officer, and they were telling me about their mission and vision and values and I actually kind of rolled my eyes at him a little bit. I said, you know, I've worked at banks and I've worked at credit unions, and I've seen these plaques on the wall before. I really just want to work somewhere where they actually mean it. And they prove to me every day how much we mean it. And I think instilling it in the culture is really the most important part. I have always believed in my career, that there is no amount of money that I can spend on advertising that will make up for a strong internal culture. I remember back about 15 years ago, I was working for a community bank and I had just started with a new CEO. They had never had a marketing department and they really didn't have much of a brand so the CEO sent me to visit this bank that he had connections with and they were the end all be all in internal culture and branding. They had been on every magazine cover you could imagine, and won every award there was. And so I got to go there and visit their enormous marketing department and see all their trophies and plaques. I met with the CEO and heard his speech, and it was all very, very inspiring, and I was super excited and motivated. They even did this thing in the mornings where they were and everybody gathers in the hallway and somebody reads a little message and they have their motivational minute every day. And I thought, wow, this is really cool. I can I can do this. I can go back and duplicate this and I was so excited. Then the second day I went to their operation center, and I met with the back office with IT and collections and operations and it was crabby down there. I mean, people were just not even nice to us at all. And we went to lunch with a couple of the vice presidents and I called him out on it. I said, what was the deal? I mean the energy and the culture up at corporate is so amazing. They even answer the phone, you know, with this amazing greeting. And then I get down here and it's really crabby and they laughed at me and said, you know, that is so much crap. Nobody really believes in that and they mocked it and they made fun of it. It was the biggest lesson in my career. That really proved to me that anything I was going to do in branding had to start from the inside out. If we didn't build that culture and those values from the inside first, and start with how we treat each other, nothing I did in marketing was going to do any good because the member experience was not going to be what people deserve to have. And so I've always really focused on building that culture from the inside out. So we spend an enormous amount of time internally talking about values and just really being authentic and transparent and getting feedback from staff and taking accountability when we mess up. Because, you know, we're executives are humans too. And we don't always do the things that we should and we don't always remember to communicate the way we should. So just really instilling that from day one, and then keep doing it over and over and over again and and keep talking to your staff not just at them, but listening to them. So, so important. So we just do that on a constant ongoing basis and it makes a difference.

Jess
Absolutely. I think for with working with you guys that it's so interesting to me because I feel like I mostly interface with one or two of the people in your marketing department. But it is funny when I suggest stuff or I say something like, oh, I need to check with Heidi, oh, I need to check with this person. I'll send that over to our business department. And I'm like, wow, like, you guys have a really good internal communication system. I think, because you've created this great internal process, everybody just feels comfortable communicating with each other and throwing ideas at each other. And it sounds corny, but working together as a team to make you guys that much better.

Heidi Cleveland
Yeah, you have to work at it. I mean, relationships are hard and no matter what kind of relationship it is. You can't just take it for granted. And so we do a lot of things. We spend a lot of time working on those relationships even in the time of Zoom you know, where we can't all be together physically. One of the great things about being at a smaller credit union is that we have the ability to bring all of our employees together once a quarter for breakfast. And it's a big party, and it's amazing. The energy is just really incredible. And we can't do that now with Zoom so we've had to get really creative and we're doing our breakfasts on Zoom. And we make time to have breakout sessions during that just so people can chit chat with each other because it's that connection between the employees that people are really missing right now. So making sure that we're finding opportunities for them to just have water cooler chat time, you know, that's what keeps everybody connected. And that's what builds your culture.

Jess
Absolutely. We talk about all the time how because we all work remotely and we always talk about how we'll have a call and then for like five minutes we'll be talking about what did you do this weekend? Does anyone have any suggestions of like where we should go for visiting here? So I yeah, I feel like there's an emphasis, there's an emphasis on watercooler talk that people I don't think realized until now we're all at home. And you don't get to have those five minute conversations when you go to put your lunch in the work fridge or the five minute conversation because you're walking to the coffee pot or the copy maker. It is kind of crazy. It makes a difference? Yeah, absolutely. I think another thing for you guys is you guys I in my opinion, you guys have great customer service. You guys do a great job of researching customer issues and learning the full thing. There are times where I've sent you guys a Facebook message saying, you know this customer this member has a complaint about something. What can you tell me so we can respond and in an hour or two hours and I'll get back, well, they called the phone number and then they called the branch and this is what happened. And if you can get them to send us a phone number, we'll call them directly.

So I think from the inside out, it works to make everything even better for your members.

Heidi Cleveland
Yeah, and, you know, complaints whether they come internally or externally complaints are feedback. That's a gift. You know, that's market research. That's really valuable when you get that kind of feedback and so we take it really seriously. And with our CRM we're able to document all of that so that you can go back and know what the customer's interaction with the member's interactions have been leading up to that. But it's just really important to make sure that those values are in mind every step of the way with every decision with every action and with every employee. I'll add this too. You know, a lot of organizations that I've worked at in the past talk about service standards and values and it gets labeled internally as that's a retail thing. That's a front line thing that only applies to the employees who have face-to-face interactions with our members. So if the values only live on the front line, and I'm a teller and I have a member in front of me, and my system locks up, and I can't do anything, and I call IT and their response is, oh, I'm busy, you have to wait in line, I'll call you back tomorrow. That's not gonna work. It has to those values have to live just as strongly in IT and accounting and risk and operations and even collections. They have to live in every area of the organization, or they don't live anywhere.

Jess
That is 100% true. I know. We especially for you guys being a financial in institution I know when the beginning of the pandemic started, we like I had heard from my parents for my friends what are we going to do with our money? Should I pull it out of the bank? Should I leave it there? What should I do? And I remember taking a minute and thinking, okay, let's think of this as a rational human being, and not fly by the seat of my pants. And I know like going back and forth with you guys especially with the pandemic, and all of these protests and all that kind of stuff. I don't know why with that kind of stuff everybody seems to get nervous about keeping their money in a bank or a financial institution. But I feel like you guys did a really good job of communicating with your members, giving them options and making it very, as you said before, transparent about this is how you can access your money. We're here to work with you. We're learning just like you're learning. This is all new to us. The last pandemic was 100 years ago.

Heidi Cleveland
Yeah, you know, I think important thing that we try and educate members about in terms of, of having them decide where to keep their money is really such a basic concept. It always reminds me of the movie, It's a Wonderful Life and the building alone that Harry Bailey had, right? But that the idea is, people think when I come to a bank or credit union and I hand you my cash, that you go put that cash in your vault, and it stays there in a little pile until I come back and get it. What they don't understand is this concept that all banks and credit unions do this; we're using your deposits to fund someone else's loan and and to use that money to invest in other things. And so the concept that we really want people to understand is it's really time for people to start asking their bank, what are you doing with my money? What are you investing my money in and do the things that you're lending money for do those things align with my values? You know, we belong to the Global Alliance for banking on values and at their summit last year in Vancouver they talked about the speaker that talked about this concept. And I remember her saying, if you want to change the world, find out where the money is. Find out who's investing in things. If you want to put an end to fossil fuel production, or to oil fracking, find out who's lending the money to the companies that are doing that. If you want to put an end to private prisons, find out who's lending the money to build those. Last year Chase came out and said, surprise, we have decided we're no longer going to be investing in building private prisons. Isn't that great of them? But how many of them have they built already? Ask your bank or financial institution, what are the things that you are lending money on. And as a credit union, it is critical that we are transparent about that, that we that we really share with our members. This is what our loan portfolio looks like and here's what we're investing in. One of the things that Verity did last year through the Global Alliance was we signed - we're one of 27 institutions across the world - that signed the climate control commitment. This is a document where we committed that by 2021 we will measure the carbon footprint of our loan portfolio. So we're very committed to the environment and climate control and so if you look at what is the carbon emissions of the things that you're lending money for that's really our impact. It's not just a carbon footprint of our building. It's the things that we're doing with our money. So for example, we've really shifted our indirect lending dealership programs away from those dealerships that don't offer fuel efficient vehicles, and we're measuring the percent of our auto loan portfolio that's for green autos. We're working with international measurement standards to figure out how to measure the carbon footprint of every mortgage loan we do by looking at the square footage and the heating and cooling systems and things like that. And the same thing on the commercial side so really starting to measure and then be able to be transparent with our members about these are the types of loans that we're doing. We also measure what we call triple bottom line loans. So not just eco-friendly loans, but loans that are designed to help people move toward economic sustainability. So things like first time home mortgages, things like student loan debt refinancing and restructuring, the PPP loans that we did for businesses during the pandemic, or our emergency assistance loans that we're doing for members during the pandemic. We put those loans into a different category and then measure what percentage of our portfolio is those types of loans, and then we can measure year over year whether or not we're doing a better job. So, I know that was a lot, but really, I think, you know, putting your money where your mouth is and getting people to start holding their financial institution responsible and accountable for what they're doing with those deposits.

Jess
Absolutely. I think that was actually like a great explanation because I was gonna ask what does that mean to have signed that saying by 2021 you guys are gonna do that. I think that is taking it above and beyond and then beyond the what's absolutely necessary. But I think that for our world to exist, minus a pandemic, we need to start thinking about stuff like that. We need to start thinking about the impacts of not just step one, but what's the impact of step two and step three, and step four and step five. And how can we mitigate the bad effects starting at step one, instead of waiting until we're at the end? And we're like, oh, crap, like the ozone gone?

Heidi Cleveland
Yeah, exactly. I mean, if we could get all of the big banks in the country, just the big big banks in the United States, to look at their loan portfolio in this way, and to stop lending for things that had a negative impact on the environment, we could get very close to reaching the numbers in the Paris Agreement. We're not going to get there entirely, but just getting the big banks to do that would make such an enormous impact. Because let's face it, the money controls what happens in this country. And as financial institutions, we have not only the power but the responsibility to control where that money goes.

Jess
Absolutely. I didn't even and I always felt like I've always heard the phrase money makes the world go round. And I've just always been like that's just been a phrase. But when you really like sit and look at it, you're like, no money does make the world go round. And it's not just like, where I'm spending my money. It's where I'm investing where I'm leaving my money to wait for me and earn interest. It's what they do with it while it's earning interest. It's such a great point that I think people don't think of when they go to open accounts at banks, when they go to look at a credit union. I think being a member of a credit union nowadays is so much more open. I think I was telling Nancy the other day that in one of our podcasts that I always thought like you had to be part of a labor union. But nowadays sometimes it's like, you just have to live in the state, or you just have to work in a certain area.

Heidi Cleveland
Yeah that's what most of most credit unions are now community fields of membership where you have the entire state. It's still a huge misconception. Just it's research that CUNA has put out has shown that it's the number one misconception about credit unions is that people don't understand membership eligibility. But once you get past that, I think this idea of we call it socially responsible banking, this is really a way for credit unions to really differentiate themselves from the banks. You know our products, let's face it, they're commodities. Our checking accounts are not that different from from Bank of America or Wells Fargo - a checking account is a checking account is a checking account. So how do we differentiate from the banks and I think people are very socially conscious today, especially the millennial segment, which is so important to us. They're very socially conscious and so raising their awareness of the importance of choosing a bank or financial institution that aligns with their values is really critical. And this is an opportunity for credit unions to really step forward and demonstrate the difference in a very tangible way.

Jess
Absolutely. So I will ask you one final question just because I feel like you guys have handled a lot of stuff that's been thrown at us since March very, very well. I'm like fine. It's kind of like I always laugh. I took - Nancy teaches a class at the University of Delaware - and I took her class and there are times where I'm like, Oh my god, I'll never have to deal with that, like ever. And then here I am dealing with it. Dealing with it.

Exactly. So with with the pandemic, and with even like the social issues I know, there were a couple times you guys said we've been advised to close our lobby down. We're, you know, for the safety of our members and for the safety of our employees who are working here because there's going to be, you know, a peaceful protest, there's going to be a protest, we're closing. How do you guys kind of handle it? And I know like the pandemics a good one and the social justice stuff is a good one because I feel like they're both very polarizing issues. How do you guys handle keeping true to your values and dealing with people who might be on the complete opposite side of the fence of what you guys preach?

Heidi Cleveland
You know it's certainly a challenging time to be in that space and Verity has taken a very thoughtful approach to where we want to go and how far we want to go. We're still working on developing what I'll call our advocacy voice and and where the the gut guardrails and boundaries of that are. But there are certain issues that we have stepped up and said, we are absolutely going to take a stand on and Black Lives Matter is one of those issues that we immediately felt very strongly about and went very public with our opinions and our support. And going into that, we had to first of all be okay with the idea that we might lose some business because of it. And when we have to sit down and say, are we really going to hold to our values and risk losing business? If you you're going to be a values based organization, the answer has to be yes. There can't be any question about that. And so, we have been very outspoken, and we've gotten a few complaints, not a lot, but a few complaints. I think more than anything, we've spent a lot of time internally talking with our staff. And I'll be honest, that one of the first mistakes that I made, because you know, you're learning as you go with these things, is that we came out with these statements without really preparing the staff for what to say and how to respond to members. So we've learned our lesson there and we spent a lot of time working with our staff and getting them to a place where they had tools and coaching on what to say and how to say it. And also acknowledging that some employees are not going to be comfortable having that conversation, and that's okay too, and giving them resources so that if they are not comfortable having that conversation they don't have to. We've also been looking at developing new procedures and policies on how we handle members who may become abusive or you know, who are really being very indelicate and uncaring and using racial hate language and things like that. And what is our tolerance for that? And how are we going to handle those situations? So, I think the big lesson for us has been yes, stick to your values. That's a great, great path for us, but be prepared for how to handle that and make sure that your staff is prepared and how to handle that. Really have been trying very hard to give them the spaces. We have a lot of Zoom calls, to give them the space to just talk really openly and honestly and freely about their feelings about these issues and to provide that space for them to really feel comfortable. So it's it's been challenging, but I think it's very rewarding as well because we have had a lot of growth as a result of it. And a lot of people who have come in and said, and we said how did you hear about us? And they've said we've just been told this is the place we have to be because of what you believe in.

Jess
That is the ultimate compliment if I've heard one. Absolutely, really. I think like you guys do such a good job just being involved in every facet of the community in and like your values are ones that I think most evolved people are in line with. I want to thank you for hanging out on this podcast with me. I feel like I just learned so much. I feel like I know stuff and then I have podcast guests and I'm like, I really didn't know things.

Heidi Cleveland
It's been fun. I love talking about socially responsible banking and I have a lot of passion for it and so I'm happy to engage in a conversation with anybody anytime on this topic.

Jess
So if anyone wants to find you to talk about socially responsible banking, if they're moving to Washington, and they're looking for a bank, where can they find you?

Heidi Cleveland
Yeah, just our website is veritycu.com. All of the executives are on the website with a link to our email so you're welcome to email any of us. You're also welcome to email t me directly; it's just Heidi.Cleveland at veritycu.com and I'd love to talk more and enjoy the conversation.

Jess
Absolutely. Well Thank you very much.

Heidi Cleveland
Thanks, Jess. Take care. Thank you.

Jess
Thank you all for tuning in this week. We hope this theory is relative to your marketing needs. Make sure you subscribe to get notified of our latest episodes.

Transcribed by https://otter.ai