Thank you for your timely treatment of member service and its true value to a credit union. [CU Times, Feb. 10, Editor-in-Chief column]
To stay relevant and gain market share, credit unions must refocus on functional value like online tools multichannel access, attract and nurture top-notch employees and embrace a member-friendly sales culture.
For years I've been fond of saying that members service is a good enough way to keep people at a credit union, but it won't get many to walk in the door. I said that as a hunch. Now, I'm delighted that we can offer real numbers to back up my hunch.
A Filene report, "Customer Experience and Credit Union Opportunities," found some keys to excellent member service and suggested others.
Superior Member Service. Credit unions outperform banks handily on emotional factors, like trustworthiness and member pride in doing their banking there. But they have fewer advantages in functional categories, like online tools and convenience.
Cross Selling. The report urges credit unions to develop a factually correct explanation of why each of your products is better (or competitive with) that of your a credit union's nearest competitor.
Frontline Behaviors. As many as 40% of front-line workers in retail finance are ill-suited for the job of serving customers. It also costs an institution up to $50,000 in direct and indirect costs to replace a frontline employee.
Employee Buy-In. Compensation is important, but the top three drivers of employee satisfaction aren't monetary. They are an interesting job, managers who provide coaching and are role models, and pleasant job surroundings are pleasant.
Credit unions' basic structure impels them to consider the needs of members before anything else. We suggest that those needs are not always best served by better and better personal service. If they were, credit unions' advantage in satisfaction would become an advantage in market share. Credit unions should treat member satisfaction and improved member experience as means to an end-never as ends in themselves.
The right satisfaction-driven goals will be different for every credit union, but they should include concerns about long-term viability, market share growth, wallet-share growth and sustainable profitability. Member satisfaction efforts that do not consider ROI inflate expenses. With margins thin, and likely to remain so for the foreseeable future, credit unions can't afford satisfaction at all costs.
Ben Rogers
Research Director
Filene Research Institute
Madison, Wis.
