June 21, 2021

Relationship Pricing


KEMBA Financial Credit Union determined that a small percentage of their members maintained multiple products and services and were subsidizing the remaining members of the credit union. KEMBA Financial had goals to reverse this trend and sought proposals to improve its business model without alienating the majority of its members.

Profound has built its core business around its knowledge of credit unions and therefore able to present KEMBA Financial with opportunities to improve their bottom line. KEMBA Financial’s issue centered on the fact that a small percentage of members were subsidizing for the majority of services KEMBA Financial offered to all members. Members using free services had activity that would not always generate income for KEMBA Financial. The result was less income for the credit union, and therefore less profits to distribute back to all members. KEMBA Financial saw the income situation as an issue for some time, but was unable to focus on resolving the issue internally as other operational matters took priority. As a third party, Profound was able to make the initiative a strategic priority. Profound was able to concentrate on creating a plan that could easily be implemented to improve the financial results for KEMBA Financial and its members.

While a key to our integrated success is our ability to understand financial institutions or other company’s financial statements, Profound could readily design a concise and lucrative product and service pricing program that was more than just a profitability model. It also included what the reactions might be from members once that proposal was implemented and long-term growth expectations. Following the initial proposal, Profound strategized with Kemba to obtain employee buy-in to ensure the implementation phase would be smooth, especially with possible significant negative reaction from some members. Profound conducted reviews with management and used solid methodology to create a proposal that the credit union executives could trust. Once the proposal was accepted, Profound worked with Kemba to implement the plan.

Kemba was able to implement relationship pricing with the help of Profound to create a more profitable business model.

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