All too often in the focus and rush to performfinancially, business people lose sight of the value of trust.Financial institutions should be some of the most trustedbusinesses that exist, and yet the financial crisis was ademonstration for many consumers that the banking industry is notto be trusted to do what is best for consumers. Millennials areparticularly wary of traditional financial institutions, which ledto the growth in alternative financial services providers.

Yet many credit unions, the ultimate P2P lenders, are shiftingto look like banks – the banks that made mortgages to people theyknew couldn't afford them. You might recall the board members whowere asleep while their CEO carried $2 million in cash out of Shoreline FCU in her purse for more than 13 years.So many instances of internal fraud have been reported lately thatit's a tremendous reputational risk for all credit unions. Thelittle bit of knowledge consumers do have about credit unions couldbe tarnished, and with that goes the trust (consumer awarenessof credit unions is and has been an entirely other column).

As I mulled over this idea for my column, it was fortuitous thatthe opening keynoter at the CU Directors & CEOs LeadershipConvention began with trust in the context of business. DonPeppers, founding partner of consulting firm Peppers & RogersGroup, pointed out that credit unions are “naturally trustable”from their business model and have a real opportunity in thecurrent environment of consumers' rising expectations with regardto trust. But trust isn't just about acting with integrity; it'salso about truly knowing your members' needs and often anticipatingthem.

Peppers advised that business has moved away from a productcentric view and toward a consumer centric view, and that creditunions should be in search of a “share of the customer's life.”Divide the value of those needs into the actual value beingprovided by the credit union, and you arrive at the credit union'scurrent share of a member's life.

Using information such as geodemographics, behavioral data andpsychographics, credit unions can get a clearer picture of theirmembers' potential needs and act on them, he said. Peppersillustrated this point with an example from a shoe store, where asalesman was consistently selling consumers on an off-brand shoe.They were just as comfortable as the name brands but the kicker wasthat they already had the laces in the shoes. For a busy salesmanduring the holidays, this saved critical time, and the shoemakerachieved higher sales by anticipating his needs.

Peppers asserted that by increasing trust, a credit union canincrease the length of a member relationship. Increasing thatlength by even 2%, he said, will raise the value of therelationship to the credit union by 20%. That is why trust is soimportant and not just the latest business jargon. Trust isn'tmerely the soft side of business. It is real dollars to the topline.

At the root of trust is the competency to deliver a frictionlessmember experience, defined by these questions:

• Do the products and services work as they should?
• Is the quality on par?
• What is the response time?
• How is privacy and data security handled?

Beyond competence, to gain member trust, credit unions mustdemonstrate relevance, competitive pricing, an obvious valueproposition and no hidden costs.

Peppers added, however, that “extreme trust comes from empathy.”Practicing the principle of reciprocity – treating others as youwould like to be treated – will help your credit union achieveextreme trust. He explained that when soldiers were returning fromthe first Gulf War in 1991, USAA refunded them the auto insurancepremiums for the time that they served. It cost USAA $10 milliondollars. Amazingly, 2,500 customers returned the checks for avariety of reasons, in general because they felt USAA had theirbacks.

So that's it. If you earn your members' trust, they're willingto be there for you, which is beneficial to your credit union, thecredit union community's reputation and the movement's power onCapitol Hill.