NEWPORT BEACH, Calif. -- Credit unions that sent marketing directors to the Marketing Association of Credit Unions' annual conference last week may hear a new term come member survey time: net promoter score.
A few MAC breakout sessions included this new technique of measuring member loyalty. Net promoter score measures the number of members who would recommend the credit union to others, minus those who say they would not.
Ryan Zilker, vice president of marketing and strategic planning for $680 million American First Credit Union, said his community charter, Southern California-based credit union uses net promoter scoring to measure word-of-mouth advertising.
American First asks members "How likely would you be to recommend AFCU to your friends, family and/or co-workers?" On a scale from 1 to 10, with 10 being most likely, Zilker counts only those who rate the credit union a 9 or 10 as promoters. Those who score 6 or lower are detractors, and subtracted from the promoters to reach the net promoter score. AFCU is so serious about measuring member loyalty, it launched a CUSO along with five other credit unions to develop an industry standard for the discipline.
Kevin Stang, senior strategic advisor for Raddon Financial Group, presented his shop's own formula for measuring member loyalty, the RFG Loyalty Index. Raddon measures four key loyalty indicators, weighing each equally to arrive at the index figure. One indicator is a net promoter score.
"We've known for years that the number one reason people join a credit union is because they were referred by someone," Stang said. "We need those referrals to achieve growth, because the industry's 1.5% net growth figure isn't going to cut it."
Stang also echoed the age-old marketing advice to put resources into retaining current members before going after new ones.
"Keeping members happy stops the attrition, and their referrals will bring you new members," he said.