Leveraging Outsourcing Partners to Stay Competitive

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” – Sam Walton

What Sam Walton started from a single mom-and-pop convenience store turned into the largest retailer in the world, Walmart. Part of this tremendous success was Walton’s laser focus on the customer. Shopping experience, customer service, price, product, and availability drove customers to Walmart again and again.

Walton didn’t build his business alone. He had a clear mission, created an internal organization with talented, like-minded people, and augmented his operations with outsourcing partners he trusted to fulfill his mission. The same strategy can help credit unions in today’s competitive environment.

In the early 1900s, unserved and underserved populations in the U.S. often relied on risky and unregulated informal financial services from moneylenders or saved their money at home. Credit unions proved they could meet demand for financial services that banks could not by pooling their savings and making loans to working-class neighbors and co-workers. Those that served urban and rural communities became an important source of microfinance.

Over a century later, credit unions continue to serve niche groups of customers, but the landscape has changed. Credit unions compete with traditional banks, online lenders, and FinTech startups for customers and market share, offering similar financial services and attracting members with better rates, better service, and lower fees. The not-for-profit model relies on keeping operational expenses low, so Walton’s strategy, outsourcing business functions to specialized vendors, is once again a pathway to growth.

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