Research Finds Opportunity and Challenge in Satisfaction Scores
A consumer research firm found that not only do credit unions outperform commercial banks in customer satisfaction by a wide margin, but current CU members' intentions to continue their memberships were "as close to perfect retention as possible," with an average score of 93 on a 100-point scale.
"Due to a national mortgage fallout, rocky economy and general confidence crisis facing the retail financial industry, consumers may be more likely to defect from commercial banks to member-owned credit unions," said CFI Group, the Ann Arbor, Mich.-based firm that conducted the survey.
The firm also found that members scored their willingness to recommend their credit union to a friend or colleague at 90, with 76% of respondents acknowledging that they had already done so.
CFI Group's study surveyed 1,000 credit union members, and the analysis of the results used the same methodology that drives the University of Michigan's American Customer Satisfaction Index, a uniform, cross-industry measure of consumer satisfaction.
"With such high levels of member satisfaction and positive word-of-mouth, credit unions have the potential to see significant spikes in new membership and increases in current membership activity," said Xavier Quenaudon, vice president of CFI Group.
While many in the credit union community may not be surprised to hear that their organizations generally outperform retail banks and other financial institutions in customer satisfaction, the magnitude of their advantage revealed in the study "is simply stunning," said CFI.
But the challenge, said CFI, is that CUs will need at least to maintain and, if possible, improve their levels of customer satisfaction to continue to enjoy these positive outcomes. CFI Group's analysis of the baseline survey data showed that if their member satisfaction levels fall, credit unions would see a point-for-point decrease in members' likelihood to recommend their credit union, to remain as members and to consider additional products and services.
In addition to its research CFI Group has launched a new product that examines customer satisfaction related to credit unions. The product, Credit Union Monitor, helps credit unions manage customer satisfaction in the face of increasing membership by tracking customer satisfaction and determining the organization's biggest profit-impacting satisfaction opportunities.
"An influx of new membership means credit unions will need to assess the customer satisfaction levels of both new and current members to maintain a competitive advantage, said Quenaudon. "Customers turning from commercial banks to credit unions will most likely have a different set of expectations. It's important for credit unions to understand those expectations and make certain that a new increase in membership doesn't adversely affect the service long-time members have grown to expect."
Credit Union Monitor measures current member satisfaction levels, identifies the key satisfaction drivers that matter most to members and delivers a customized action plan to leverage and increase the effectiveness of those drivers.
The CFI Group Credit Union Monitor currently shows credit unions with a customer satisfaction rating of 85. Credit unions in fact score nearly as well as some of the top-rated companies and industries measured in the ASCI, such as Amazon.com, Mercedes-Benz, and other high-value brands.
CFI Group's research showed that in the first year, a new member's key satisfaction drivers include positive experience with credit union personnel, the branch overall, and phone service. However, after the first year other factors gain prominence, such as online services, product offerings, rates and fees, and information availability, as members take greater advantage of a credit union's advanced services.
"The difficulty is that those areas that drive the greatest satisfaction for new members are the same areas that may start to suffer as membership increases," said Quenaudon. "Credit Union Monitor was specifically designed to help credit unions effectively measure, manage, and leverage member satisfaction profitably."
CFI Group's white paper, "Making the Most of Membership Growth," can be downloaded at www.cfigroup.com.