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Tuesday, February 17, 2009

Marketing, Schmarketing


Most people might agree that a Marketing Department is a critical component of any credit union and that the department is necessary in understanding an organization's marketplace and developing products, services, and promotions that satisfy the needs and wants of its members. Evidently, this truth is not one shared by Priority One Credit Union's President, Charles R. Wiggington, Sr. 

In 2007, President Wiggington decided on his own and without input by any of his officers that he would dismantle Priority One's prize-winning Marketing Department and remove its Director and instead, install a marketing committee staffed by employees of the Loan, Card Services and Member Services departments, none of who had an education or any experience in anything related to marketing. It was an unadulterated doltish decision that would prove detrimental to what had been a thriving credit union. 

The President unveiled his new creation, declaring it would be far more effective in helping develop new business than had been the former prize-winning Marketing Department. He also placed tremendous emphasis on the fact that the marketing committee would save the credit union tens of thousands of dollars. In his words, "I'll show them how to get results for less money." He was wrong. 

The President also appointed Aaron Cavazos, the AVP of Lending, to head the new marketing committee despite the fact Mr. Cavazos had no experience or education in anything related to Marketing. To date, the once highly touted committee has done nothing more than select language and graphics for impending promotions, reducing them to an advertising committee. Clearly, Charles R. Wiggington, Sr. does not realize that marketing and advertising are not synonymous. It is his ignorance which is contributing to the credit union's current decline.  

Priority One's largest sector of members are the employees of the United States Postal Service. It is after all postal carriers who founded Priority One, then known as the Credit Union of Los Angeles, in 1926. 

Priority One's territory which President Wiggington has divided into regions, extends from the Santa Clarita Valley in the north to the Riverside/San Diego border in the south. The vast territory is compromised of varied demographics. The credit union is community chartered in the Santa Clarita and San Fernando Valleys which means, anyone living, working or worshiping in the regions is eligible for membership.  In the city of Los Angeles and the San Gabriel Valley, a person must be an employee or have a relative employed by the United States Postal Service or being employed by a contracted Select Employer Group. 

The Marketing Director displaced by the President had more than ten years of experience in marketing and over the years, had developed strong ties with representatives of other credit unions, with marketing companies, and with vendors. As stated previously, while serving as Director, she garnered numerous awards for promotions and advertising commissioned by her. 

Last December, Priority One posted an advertisement for a "Holiday Relief Loan." Under former President William E. Harris, the same loan was known merely as a Holiday Loan. Based on its amended name, the loan is intended to appeal to members who are in financial straits. Is this correct? A better name might have been the Priority One Holiday Welfare and Debt Relief Loan.


Last week, President Wiggington was busily involved in revamping all job descriptions for non-exempt personnel. To be correct, the President isn't involved in rewriting any of the descriptions, he's just constantly calling Human Resources to ask if they are working an amending the descriptions. 

He recently disclosed that that he plans on running a tighter ship than that managed under his predecessor, William E. Harris. He has said the revised descriptions will ensure that staff are fulfilling all of their assigned responsibilities. We happen to know this is not the real reason for amending the descriptions. Priority One is losing business and is struggling to generate new business. The 2007 Inland Counties Postal Credit Union debacle and security breach that occurred when the President allowed ballots to be mailed to members in envelopes on whose exterior were printed member account and social security numbers had an adverse impact upon business. The 2008 investigation of the President which confirmed he sexually harassed a former employee also had an adverse impact upon business. It is the current ongoing cycle of losses which have prompted the President to recently declare that he will have to escalate expense reductions and may even have to reduce staff size. Thus his plan is to identify and terminate employees who are not fulfilling of all their assigned responsibilities. If production is key to retaining or ending a person's employment, then dare we ask, "Who is going to review President Wiggington's performance?" 

We recently happened upon the following article, Marketing by CommitteeThursday, March 03, 2005  and writeen Chris Houchens, a marketing speaker, writer, and owner of Shotgun Concepts.  We thought it worth sharing since the subject pertains to the topic of marketing committees. 

I was just speaking to a friend who is a marketer. She was dreading a meeting with her company's "marketing committee."

Many companies have a marketing committee to help brainstorm and provide input to the marketing department. Management feels that this allows employees to "be involved" in marketing. This is a bad idea. Why don't you have an office supply committee to pick out the colors of pens you order? How about an accounting committee to help figure out where the credits and debits are posted? Or even better, what about a human resources committee to help decide who is hired and fired?

Committees, by nature, are full of compromises so solutions from a committee are usually watered down versions of the original. Marketing by committee leads to lots of bad ideas and poorly thought out plans. Instead of bold strokes from the marketing brush, you get a wall of beige.This is not to say that the marketing department should be sitting on the mountaintop handing down dogma to the rest of the company. A good marketer in a company will already be engaging other departments about their needs and concerns. Good marketers will always have an ear to the ground about what the feel of the company is. Hopefully, you hired the people in the marketing department because they're good marketers who know how to market. Let them do it.


President Wiggington created a marketing committee without any prior research to determine how and if it would help the credit union to develop more new business. His decision to replace the Marketing Department and its accomplished Director with a committee was based on what he believes to be true. There is not rationale behind his decision other than he believes that a marketing committee is far superior to a Marketing Department. Unbridled emotion and misdirection seem to be at root of many of the President's fantastical and unsuccessful creations. 

The real reason he eliminated the Marketing Department was revealed in September 2006, just 3 months before he started his appointment as President. At the time, he informed Director of Human Resources, Rodge Smock, and CFO, Manny Gaitmaitan, that when he became President, he intended to rid the company of "Harris' people." He of course was referring to former President William E. Harris' executive staff. 

In February 2009, it is evident by plummeting sales that the President's marketing committee is completely ineffective. President Wiggington lacks the business savvy or understanding of the credit union's marketplaces to qualify him a an effective administrator. 

In mid-2007, we witnessed the President's not-so-clever imagination at work. At the time, he distributed large white-colored badges on which were printed the words, "Just Ask." He told employees that they must wear the badges while at work and declared that he knew for a fact, the badges were going to create a surge of new business. Not surprisingly, the badges failed to achieve their purpose. The pins which would fit perfectly on a clown's lapel could never have succeeded because they lacked the magical properties needed to conjure up new business. 

From a psychological perspective, what can be said about a President who would eliminate the Marketing Department in his zeal to rid the company of officers he associated with his predecessor. His actions should be deemed disturbing and one has to wonder, what more destructive acts will be committed by the President if his reign of incompetence continues, unchecked. 

"Why should a fool have money in his hand to buy wisdom when he doesn't have a mind to grasp anything?" - Proverbs 17:16

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CU Prezz said...

My guess is that Wiigington got rid of the Marketing Manager (beside getting rid of a Harris Loyalist) to cut down expenses. With salary and benefits he probably slashed $80,000 (her salary) from the overall expenses. I am assuming the voluntary marketing committee does not receive any pay.

You may want to look at Priority One's Delinquency and Charge-offs ratios and dollars. In the past 12 months they have spiked quite a bit.

Delinquency has mnore than doubled in 12 months going from 0.67% (12/07) to 1.34% (12/08).

Loan charge-offs have increased significantly. For the 12 month period ending Dec. 2007 the CU charged-off $1,143,000. For the 12 month period ending Dec 2008 the CU charged-off $2,371,000. That's more than double.

CU Prezz said...

If Wiggington starts reviewing job descriptons then I agree he probably is looking to downgrade or terminate employees in order to slash expenses. But isn't that Human Resources job. Shouldn't the HR dept. be reviewing job descriptions and performance evaluations along with the appropriate supervisors.

In order for Wiggington to review job desriptions each employee should already have a very detailed written job description in place - I wonder if they do. I would think it will be a massive undertaking for Wiggington to to a detailed thorough review.

John said...

Though its true that the members of the Marketing Committee do not receive additional pay for their participation on the committee, I continue to believe this his removal of the former Marketing Director was not motivated by cutting down expenses. If that in fact had been his primary motive he would not have changed her title to Marketing Director, relegated her to the back office only to return her to the front office a few days later. Furthermore, he promoted 4 former branch managers to the position of AVP and with that allotted each a substantial increase in salary.

John said...

I meant to say that her title was changed from Marketing Director to Marketing Coordinator.

Also, if actually concerned with saving money he might have held off on the implementation of the credit union's new failed phone system which came at a cost of $600,000; a new email system; and Shared Branching. His priorities are muddled.

CU Prezz said...

After reading the comments by KayO on the screw-up with the conversion of the computer systems during the Merger with Inland Counties it's amazing to me the members have not revolted en masse.

I would be furious if my direct deposit was not made properly. Someone at Priority One should be held accountable for these series of major miscues.

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