DULUTH, Ga. -- Membership growth, or the lack thereof, is a pressing issue most credit unions continue to grapple with.
Georgia's industry is no different, according to a new report from the Georgia Credit Union Affiliates' Membership Growth Initiatives Task Force. In 2006, Georgia's credit unions added just 23,000 members or 0.3% to its membership roll, which currently contains just over 1.7 million members--nearly the same figure for 2005.
The membership task force found that many credit unions were "clipping along" with 10-15% annual new member sign-up rates. Where that's the case, closed and purged accounts were "nearly as high." Despite the numbers, Georgia has a plentiful marketplace to cull new members with more than nine million citizens and almost four million in the civilian labor force. The peach state is also one of the fastest growing states in the country in terms of both population and economy, the task force noted.
"Aggressively seeking new members has to be predicated on the assumption that the value proposition for existing members is somehow enhanced or at least not depreciated," wrote the task force, comprised of 17 executives from Georgia's credit unions.
Meeting for the first time in February, the task force came up with specific recommendations to achieve its system-wide annual net membership growth rate of at least 8%. The group, which released the report at GCUA's annual convention in May, came up with two key directives: employ an outside, professional firm to develop message and imagery for a collaborative awareness campaign that would increase CU membership recruitments, create a common identity, develop an image campaign and identify resource requirements to make it a success.
The task force also recommended increasing the number and effectiveness of shared service end points through branches and ATMs by increasing functionality, having franchise-type rules of operation to achieve "consistent service," creating a prominent common branding and avoiding and/or eliminating duplicate distribution costs.
"The league board has already commissioned an effort to find out what kind of message would be appropriate in the context of the two recommendations," Mike Mercer, president/CEO of GCUA said, adding that the board will meet in August on this effort.
Mercer said the league board will also kick off strategies on how to proceed with the second recommendation of increasing shared service points at its November meeting this year.
To build up new member recruitments, the task force provided a list of 19 "best practice" resources for Georgia's credit unions to consider. Among them, appointing dedicated business development personnel, marketing to teens and young adults, recruiting Hispanics, Asians, Africans and Central European immigrants and participating in shared branching. Other resources include establishing "aggressive" member referral campaigns and eliminating membership eligibility constraints.
"Assuming that credit unions can still put good pricing on the street--and the Task Force believes most can--sustained growth comes from attention to service quality and proactive business development practices."
On the flip side, the task force also comprised a list of suggestions to "slow down the number of defections." Being proactive with semi-dormant accounts is a strong start because it can cut off the path to "complete account dormancy," the group said. Installing a strong member "on-boarding" program within the first 90 days of new membership can also prevent dormancy later on. Credit unions might consider finding out exactly why members have taken the initiative to close their accounts. Employees should also be empowered to fix problems--"The presumption should be that the member is usually right even when they're not."
The task force acknowledged that "every credit union is confronted with the dilemma of having many near-dormant accounts which actually drag down the value proposition for the members that use the credit union frequently." The issue continues to lead to which accounts are worth salvaging.
"Some have advanced the idea that a more enlightened growth target would be directed at 'active' membership accounts," the task force wrote. "The problem is that opinions about what constitutes a 'beneficial' account relationship are all over the place. In addition, data for active account usage is hard to come by."
Meanwhile, CUNA is spearheading a national effort addressing the causes behind slowed membership. The trade group's new Membership Growth Task Force, chaired by Texas Credit Union League President/CEO Dick Ensweiler met at America's Credit Union Conference & Expo last week. Among the strategies the task force will study are branding credit unions effectively so they are recognizable to the public, identifying the value of and tapping research about the different market segments, considering cost efficiencies and franchising issues and developing metrics and standards for peer comparison of growth and factors such as social responsibility that may appeal to certain members. Mark Outler, chairman of Georgia's membership growth task force and president/CEO of MACO Educators Federal Credit Union, is also serving on CUNA's task force.