Credit unions rely on their existing members to keep them in business. However, with new regulations and rising costs, credit unions not only need to maintain member relationships but also get those members to purchase new services. While this statement is obvious to many in the credit union community, there is no clear-cut path to overcoming this challenge.
Member services, product offerings and interest rates all come into play, but it is important to remember that marketing efforts can strongly influence retention. The best method of executing member marketing initiatives is certainly up for debate, but one thing is certain: in order to up-sell and properly market to members, credit unions must be able to communicate with them. Without the ability to communicate, credit unions are simply unable to educate their members about new offers or special rates.
Despite the apparent simplicity of this task, many credit unions struggle to reach their members. In order to communicate, credit unions need accurate contact information for each of their members, and unfortunately, the majority of credit unions do not have a strategy for ensuring the accuracy of contact data.
To truly achieve accurate contact information within a database, credit unions need to understand why it is important to have accurate contact information, the current state of their data and how to go about cleaning that data.
Experian QAS recently finished a research project where businesses were asked about their current contact data perceptions and practices. The survey revealed some interesting results, but some of the most interesting points included:
The top three data errors are incomplete or missing data, outdated information and incorrect data.
Sixty-nine percent of organizations have or are currently working on a contact data management strategy.
Budget and staff errors were cited as the main barriers to accurate contact data.
Organizations maintain and improve contact data through staff training, software tools and staff measurement.
Organizations as a whole have issues with their data, not just because over 30% are not even looking into a contact data management strategy but because so many businesses utilize manual processes to clean data.
Consider the operations at your credit union. How accurate is your contact data? Credit unions can measure the accuracy of this data by simply looking at the most recent marketing campaign. How many e-mails bounced back? How many letters were returned? This can give you an idea of the amount of inaccurate contact information within your database.
Contact data effects many areas of operations for credit unions. Two main areas that experience the affects of poor contact data are communications and member analytics.
Communications include credit card offers, notifications or any other up-sell documents. These documents rely on accurate address data to reach their destination. Bad data prevents members from receiving communications, but perhaps more importantly, results in additional, unnecessary costs in the form of budget, staff time and loss of potential revenue.
Member analytics are affected by the quality of contact data. Member intelligence, such as geographical data or account history, can affect the selection of new branch locations, advertising and targeted mailings. Without accurate data, credit unions could be making important investment decisions based on faulty analysis.
The wasted costs mentioned above not only affect overall operational efficiency but also member services. Credit unions are unique in that they operate in a not-for-profit environment and are owned by their members. Wasted costs reflect poorly on the administration from a member relations standpoint but also take away from resources that could be allocated to other operations designed to enhance member satisfaction.
The bottom line is that if members are dissatisfied, they will leave the credit union and utilize banking services provided by many other competitors within the market. Credit unions don't need to give their members reason to leave, simply because contact data was inaccurately entered.
To prevent these errors, credit unions have several options. The first is to train staff on the importance of accurate contact data. Everyone should have a vested interest in making sure that data is entered completely and accurately the first time.
The next option is to utilize back-end cleansing tools. While these won't be able to fix all data entry errors, they can provide significant benefits. They are also helpful in cleansing information like purchased lists or marketing intelligence.
Finally, credit unions can roll out contact verification solutions at all points of address data entry. These safeguards can be implemented in branches, call centers, websites or any other place where contact data is changed or entered. Verifying contact information at all points of entry ensures that credit unions work with clean data when executing marketing campaigns and compiling analytical data.
According to David Loshin of Knowledge Integrity Inc., accurate data quality can help an organization achieve a significant competitive advantage. Loshin states, "Any company intending to achieve and maintain a competitive advantage must first rely on fundamental access to superior resources. And in the information age, one of those key resources is data."
When one considers all of the potential wasted costs associated with bad data, it is easy to justify this type of project. Improved marketing campaigns and member analytics enable credit unions to streamline operations and reduce costs, but more importantly, enhance the member experience and simultaneously increase up-sell opportunities.
Joel Curry is managing director of Experian QAS UK.
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