Banks may not be getting any consumer love, but that doesn't necessarily translate into a lasting membership growth boon for credit unions.
A recent Filene Research Institute report, "Customer Experience and Credit Union Opportunities," revealed that although members say they love their credit unions, many take their financial relationships elsewhere. A survey suggested that making existing credit union members more satisfied may be the wrong goal.
"Consumers consistently identify credit unions as trusted financial providers, but that bond doesn't translate automatically into increased wallet share or membership growth," said Dorian Stone, a Filene fellow and McKinsey partner. "In transitional times like these, credit unions may survive by maintaining historical goodwill-but they can't win without a focus on delivering functional as well as emotional value to the consumer."
He added that rather than consistently getting the basics right, many credit unions overemphasize and jump to more emotional elements like consumer trust and personal touch in their member interaction. The result is that often customer experience excellence is viewed as a goal in and of itself rather than as a means to an end. Stone said customer experience excellence as-and should be viewed as-a means to greater share of wallet, greater efficiency in serving that customer and, ultimately, greater institutional value. He suggests that top customer satisfaction ratings can be achieved in multiple ways and different methods have profound impacts on consumer choices on deposits, loans and investments and on the ultimate economic impact on the institution.
"What we've found at McKinsey is that banks and financial institutions that are winning market share compensate for 'good enough' customer satisfaction relative to the top marks of credit unions by focusing on different drivers of satisfaction than credit unions. Winning banks have invested heavily in the convenience and functionality elements of their product and service delivery and work to deliver a personal touch in that process. By contrast, credit unions often jump to the emotional bonds and personal touch instead of focusing on getting the functional element right," said Stone.
He said credit unions would be better served by getting the facts and actual ROI of making members happy, understanding what drives that satisfaction and looking at how they can best deliver that-with an eye toward providing more functionality.
The report suggests that all financial institutions, not just credit unions, will find their highest satisfaction gains by focusing on moments of truth and key life events because it's less expensive and has more of an impact than trying to improve every single interaction.
The full report is available on www.filene.org.