Building Member Loyalty by Any Means Necessary
There are lots of ways for credit unions to go about improving member experiences, growing member referrals and increasing their average number of products per member. From launching staff training programs to utilizing analytics technology, strategies differ, but the end goals are the same: Build member loyalty, and ultimately, spur growth.
Many CUs offer points-based member loyalty programs, which allow members to earn points for completing various activities, such as using a debit card or attending a financial workshop, and spend them on perks such as lowered loan rates. For example, the PlusPoints Loyalty Program at A+ FCU, an $877 million CU based in Austin, Texas, has led to an average of four products per member, excluding indirect members, Vice President of Marketing Stan Cowan shared.
“Those who participate in the program at high levels are much more loyal to A+ FCU and call us their preferred financial institution,” Cowan said. “Also, the more PlusPoints that are earned and redeemed, the higher net promoter score A+ FCU receives.”
For 3Rivers FCU, a $658.6 million CU based in Fort Wayne, Ind., increased member loyalty lies within a technology solution designed to capture and analyze member feedback, which the CU uses to identify problem areas and improve member service.
In 2010, 3Rivers FCU implemented the Engage Voice of the Customer platform from Allegiance, a provider of customer loyalty and employee retention solutions that serves more than 30 credit unions.
“We had an initiative to gather member input and feedback that we could act upon,” said 3Rivers FCU Strategic Marketing Manager Steve Levendoski. “A lot of vendors out there provide services that have to do with call centers, but we wanted to get feedback from different touch points. Allegiance had a full menu of solutions.”
The CU’s VOC platform collects feedback, including survey results and unsolicited input, from multiple channels and filters it into a single platform that comes equipped with reporting and analytics tools.
To offer unsolicited feedback, members can click on a button labeled “I have a voice” on the CU’s website to comment, which is followed by a five-question member satisfaction survey. The CU also distributes relationship surveys via email, which have produced an impressive response rate of 10% to 11%, Levendoski said.
Every two weeks, 3Rivers FCU’s member services team meets to discuss recent feedback, identify trends and determine plans of action. For example, the CU launched an initiative to streamline the accessibility of its online banking system after learning it caused difficulty for some members. Smaller issues also came into play–the CU returned the ropes to its teller lines in grocery stores after discovering members were unhappy they were removed.
“It’s been a lot of ongoing little things that I think actually make a big difference in member satisfaction,” Levendoski said.
Since using Allegiance’s VOC platform, 3Rivers’ member referrals have jumped from an average of 25 per month to more than 200 per month, and its average number of products per member has increased from 1.75 to 1.81. The CU’s percentage of members carrying two products elevated from 22.02% to 24.76% and its percentage of members with three products increased from 20.76% to 21.9%. 3Rivers has also seen a rise in average checking and savings balances.
“More of our members are now proponents of our brand,” Levendoski said. “Strong proponents tend to use more of our services. They also tend to tell others about us, and that makes a big impact on our market share.”
The technology has also allowed 3Rivers FCU to pinpoint engaged members and sort them by demographic. “We can segment members into groups–by age, income, preferred transaction and customer duration–and obtain the percentage of engaged members in each group,” Levendoski said. “We then look at the qualitative information within each group to identify what will have the quickest impact, then come up with a game plan that will increase the likelihood for less engaged customers to become strong proponents.”
Added Chris Cottle, executive vice president of marketing and products for Allegiance, “The credit union business is all about relationships. So, retaining and satisfying members, improving member services and continually creating and enhancing member value is critical.”
Also leveraging analytics technology to advance business at credit unions is Members Development Co., a member product and service research and development company jointly owned by credit unions and CUNA Mutual Group. MDC recently formed a partnership with Advanced Software Applications, a Pittsburgh-based analytical technology solutions provider, as part of an initiative to offer predictive analytics tools to its member credit unions. ASA has allowed participating credit unions to pool their data together, resulting in a lower cost for the CUs, MDC CEO Jeff Kline said.
ASA’s predictive analytics technology can be applied in multiple credit union departments to identify trends and help managers understand where to shift their focus, Kline explained. For example, CUs can use the technology to track transaction history, allocate collections data and develop targeted marketing solutions, he said.
“Let’s say you’re trying to determine the best group of recipients for home equity marketing materials,” Kline gave as an example. “If you create a tool that says, mail it to these 20,000 people, not these 100,000 people, then you’ve just cut costs.”
One MDC member credit union has implemented ASA’s technology thus far, and several others are in the beginning stages of implementation, Kline said.