The U.S. economy, while showing some signs of improvement, remains lackluster. The credit union industry and your credit union specifically are faced with a variety of economic and legislative challenges. Concerns with loan demand and loan quality may be dominating your ALCO discussions. Let's face it; these are tough times to be a strategic leader at a credit union. It makes you wonder why you got into this business in the first place. But we all know it comes down to one word: Passion.
For more than 10 years I've heard credit union executives talk about positioning credit unions as "financial advocates." After all, we're supposed to be about "people helping people." Certainly these philosophies are byproducts of our passion to provide the utmost in member service. However, when you look at sentiment toward the financial services industry as a whole, the gap between what consumers and FI executives think, has widened. And I don't think we can just blame it all on the big banks.
Some financial institutions have experienced strengthened loyalty with their own base, as measured by their improving consumer satisfaction and engagement metrics. I believe engagement is a key word and I'm confident that those financial institutions that proactively engage their base are the ones with the most loyal followers and fans. Chances are they are finding ways to engage consumers in meaningful, relevant dialog, all while differentiating their brand in a very homogenous, if not commoditized industry.
Little has impacted the retail banking industry more in the past few years than the effect of technological innovation on consumer behavior. There has been overwhelming mainstream acceptance of mobile devices such as application-driven smartphones. Whether you drink the Kool-Aide or not, social media is on fire, as it continues to impact how we interact, communicate and express ourselves. The continued proliferation of online banking, bill pay, and personal finance tools have collectively made an indelible impact on the way your members prefer to interact with you.
Credit unions have had to shift service focus from relying on just in-branch sales to engaging members and prospects on their own terms - when, where and how it is convenient for them, the member.
Generally speaking, consumers view banking as a chore and commodity. And while we try to compete by offering varying degrees of ease, convenience or price differentiation, it's simply not enough. Besides, in this interest rate environment, differentiation on price is difficult and adds to the commodity mindset of the consumer. We need to act differently and better align with member needs. We should be talking with our members, not talking at them.
We are entering an era of engagement banking. Now is the time to leverage our passions and engage members by establishing relevant dialog and conversation. We need to motivate current and prospective members and reach out to them in ways we have not done before.
Members are wary of being "sold," so I'm intentionally avoiding the words "marketing" and "selling." What they really need is help; help managing daily finances and reaching financial goals, including living within their means. Your credit union needs to be positioned as a solution provider, but needs to do so through the execution of an experience, not simply through traditional marketing or branding. You need to go well beyond the veneer. This means you need to actively engage members across all channels, through human interaction and technology driven experiences. Remember back in the 90's when we spoke of "high-tech, high touch"?
As reported by the Financial Brand, "People aren't interested in listening to you talk...about you. If you want to see someone's eyes light up, ask them questions and encourage them talk about things that interest them -- namely themselves, their experiences, their questions and their concerns." This is what engagement is all about.
Members are decreasingly making a distinction between what is physical, such as interpersonal interactions with tellers, and what is digital, such as online bill payment. Members expect a high level of member service delivered seamlessly and consistently across multiple channels.
Rudimentary messaging and branding strategies, combined with employee training, can address some aspects of engagement banking in the branch and the call center. But we need to engage members online and through all our alternative retail delivery channels. This is a particularly important consideration as your members continue to adapt to online and mobile banking technologies.
Take Internet banking as an example, which can be leveraged beyond the mere transaction. Proper use of social media, online communities and personal financial management tools go well beyond simply providing members another online transaction tool. Deployed appropriately, these can be ideal engagement tools. For example, via account aggregation, budgeting and cash flow tools, your credit union can get closer to member needs. Not only are you turning rich data into actionable information, you are providing added ease and convenience.
Engagement allows for a kind of intimacy to evolve, which ultimately builds trust and gets us closer to understanding specific member needs. A closer, more focused relationship with members no doubt drives satisfaction and share-of-wallet. While the competitive and legislative landscape will continue to evolve, so shall our opportunities, if we engage members thoughtfully and relevantly, regardless of delivery channel.
Demonstrate your passion to serving members' needs and engage them. And clearly appreciate the fact that it is the member that calls the shots, not you or me.
Bryan Clagett is chief marketing officer at Tolland, Conn.-based Geezeo, a provider of online personal financial management and integrated marketing solutions to credit unions.
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