Continued credit union growth is predicated on the ability ofcredit unions to not only keep the members they have, but alsoattract new members. It is important for organizations to focus onits employees and business operations, but in order to grow andprosper they should concentrate on their members. Members serve asthe conduit between the employees of the organization and anyearnings potential that an organization may realize.

As many credit unions have known for a long time, but is onlynow widely accepted in many business organizations, profitablemember/customer experiences are no longer transaction based, butrather relationship based. This requires every person in theorganization to be aligned and commit to a sole strategy ofpositively affecting members whenever possible.

The management and employees of most every credit unionunderstand that their actual existence hinges on the members thatthey serve. However, it is one thing to understand and focus onthis element of business, and it is another thing entirely tobecome a truly member-centric organization.

The topic of member satisfaction and retention has become arather “hot” issue in recent history. Having noted this, it is notenough anymore for an organization to just provide good memberservice; they must ensure that they are engendering member loyaltyat all times. Member loyalty is more than just a theory. It can begauged in the form of an equation.

At the heart of member-centricity is the concept of the membervalue equation. The Harvard business professors that developed theservice-profit chain theory state that “this equation suggests thatthe value of goods and services delivered to a member is equivalentto the results created for them as well as the quality of theprocesses used to deliver the results, all in relation to the priceof a service to the member.”

It should be no secret to anyone in the credit union industrythat money is a commodity, as are a majority of the relatedfinancial products they provide. As margins narrow and competitionbecomes more intense, market conditions are driving moreorganizations to focus on and become more member-centric.

When one is in a commodity-driven business, with manycompetitors, it is necessary to differentiate one's self from thecompetition in order to remain viable and grow. Forward thinkingorganizations are quickly transitioning from being product-centricto becoming truly member-centric organizations.

Organizations are rapidly realizing that the common denominatorbetween product or service delivery and increased income (net worthgrowth) is the member. Because of this, many organizations areredesigning their current business strategies around themember-centric philosophy.

Intelligent, visionary credit unions, too, are recognizing thatjust like their employees, facilities or cash, their members arevaluable assets that should be actively managed accordingly. Notonly do members generate revenue for credit unions, what they sayand how they feel can influence future revenues of the institution.

Member-centric organizations proactively and constantly listento their members and react accordingly. They view their businessstrategy from the point of view of the member, and thus reduceexpenditures on unwanted processes, and at the same time create newbusiness opportunities as a result of acting on memberfeedback.

This requires the ability to analyze every business functionwithin the organization, not only relying on member surveys ordirect member feedback.

For example, an organization should analyze the penetration rateon the last few specials they advertised to gauge the effectivenessof the initiative. Also, before initiating a new product orservice, an organization should assess whether or not membersdesire the product or service through hard data and not justhyperbole assumption.

Becoming a member-centric organization means more than justsaying that this is what will happen. It requires a paradigm shift,and an entirely new business strategy that is centered on themember at all times.

In their quests to become member-centric, organizations mustconsider that it is not enough just to take care of the membertoday, they must think beyond today and plan for what the memberwill desire tomorrow.

Successful organizations will do more than just meet members'stated needs. They will become proficient at accuratelyanticipating members' unarticulated needs and desires far into thefuture.

At the heart of becoming a true member-centric organization isthe ability to create value for the member whenever they come intocontact with the organization.

According to Frederick Reichheld, a noted business consultant,“what drives this new model is not profit but the creation of valuefor the member, a process that lies at the core of all successfulenterprises. Value creation generates the energy that holds thesebusinesses together, and their very existence depends on it.”

Member acquisition in today's economic environment is hardenough. It is important to create member loyalty in existingmembers, and be able to consistently deliver on the promise of amember-centric experience to potential new members.

Organizations need to honestly consider whether they willadvertise themselves as lowest cost, highest quality, or having thebest service available. In a commodity driven business likefinancial services, the answer is very obvious. Therefore, in orderto deliver on the promise of delivering the best service possible,organizations must be driven to the concept ofmember-centricity.

Organizations that adopt the member-centric philosophy not onlyoperate and think differently, they also ask questions differently.Their values, mission, and organizational structures exist for themember, not the management or employees of the organization. Thebottom line is that a member-centric organization is truly ownedand operated for its member owners!

AnthonyL. Emerson is president and CEO of the Credit Union League ofConnecticut.