MADISON, Wis. and FOSTER CITY, Calif. — The Filene ResearchInstitute teamed up with Satmetrix to look at credit unions' stablemarket share despite strong member loyalty and high customer/membersatisfaction polling among financial services providers.

The research takes a new and simple approach to member loyaltycalled Net Promoter(R), the loyalty metric co-developed bySatmetrix, and loyalty expert Fred Reichheld, which subtracts afirms percentage of detractors from the percentage of promoters. Toexamine the apparent disparity between satisfaction and marketshare, the Filene Research Institute asked Satmetrix, a globalprovider of on-demand software applications and consulting, toevaluate member loyalty and analyze the elements of credit unionexperience that drive loyalty. Satmetrix employed Net Promoterscoring–also being implemented by firms like Apple and GeneralElectric–to analyze 17 participating credit unions.

The study provides credit unions a primer on NPS and catalogspreliminary statistics for its application. The 17 credit unionsparticipating in the study scored an overall NPS of 54.3%, with67.7% promoters and 13.4% detractors, and places credit unions inthe top 10% of all firms for member loyalty. Individually thecredit unions ranged from a high of 79.1% NPS to a low of19.6%.

“Overall product and service quality, overall value and memberservice and support are key ingredients. High Net Promoter scorescorrelate with high credit union asset growth, high credit unionmembership growth, and loan growth,” Filene Research Institute'sChief Research Officer George Hofheimer explained. Promoters arelikely to be individuals who regard the credit union as theirprimary financial services provider; have good overall experiencewith their credit union; and are longtime members. Nearly 85% ofpromoters see their credit unions as their primary institution and72% have been with their credit union more than five years.

The study found large gaps in expectations between promoters anddetractors. “Promoters indicated multiple areas where their creditunion exceeded their expectations–especially branch experience,online services, and customer service/support,” the study read. “Incontrast, most detractors showed large expectation gaps in almostall areas.”

Given the small sample, the study could not conclude acorrelation between NPS and growth. However, those in the studywith asset growth over 11% scored between 56% and 67%, while thosebelow that threshold were around 36% to 39%. Participating creditunions with higher loan and membership growth also achieved ahigher NPS.

NPS is designed to identify key drivers in loyalty so that aplan can be implemented to improve upon member experience in theseareas. “The basic premise of Net Promoter is what attracts mostfirms to the idea; however, the process for measuring andunderstanding the concept goes much deeper,” said Laura Brooks,vice president of research and business consulting for Satmetrix.“Firms are building Net Promoter into all aspects of their strategyand operations, including customer segmentation and profitabilityanalysis, executive and staff compensation, service experienceaudits and product development.” –[email protected]