Ideally, member relationship management software makes member data accessible to a credit union's front line staff and loan officers so they can improve the credit union experience.

However, executives familiar with the subject said too often credit unions misunderstand what the software does and can help them do. Additional, credit unions need to focus more on the big picture and less on the MRM software's specific technology.

Jim Burson, senior director with Cornerstone Advisors in Scottsdale, Ariz., said one of the most common misconceptions is that an MRM program automatically or seamlessly equals stronger production in loans or services.

Instead, he explained, well-designed software as part of a strong MRM strategy will position a credit union to offer more loans and services, but it will not guarantee members take them out or use them.

“What credit unions need to understand,” Burson said, “is that having good relationships with members is the ante to get into a very competitive game. When members approach a teller, they expect a high degree of service and product knowledge and if they find that, members will be more open to talking about higher auto loans, mortgages, investments and other products.”

Burson also pointed out that an MRM tool, by itself, will not make a credit union's loan officers or tellers more credible with members, but a good MRM program can help make that happen.

For example, a good MRM tool could display elements of a member's life that make him or her a good candidate for a home equity loan, Burson observed. However, in order for the member to take out a home equity loan he or she will still need a knowledgeable loan officer or front-line staffer who can explain its benefits and costs.

Finally, Burson explained, credit unions launching a MRM strategy with a software component need to understand they are embarking on long-term effort. Just because a credit union's front line staff, prepared with MRM software, offers the best and most knowledgeable service, that will not create member needs for new loans or other services right away, Burson said.

Here is a screen shot of the Touche member relationship management solution.

For example, a member opens a checking account upon graduating college and getting a new job. Over the next three to five years, he or she makes changes to it: Adds and changes direct deposit as employers change, opens a linked savings account, and accepts and uses a debit card that gets lost or stolen twice and has to be replaced.

Finally, the member decides to buy real estate and realizes he or she needs a mortgage. Because of the way the credit union has handled his or her account and other needs for the years leading up to the decision, he or she is inclined to let the credit union have at least the first try at meeting those mortgage needs.

Read more: Specific ways MRM can improve the member experience …

Chris Braccia, senior product manager at Davis + Henderson in Toronto, Canada, agreed with Burson about credit unions' remembering a solid MRM strategy is about more than the technology.

D+H purchased Harland Financial Solutions, including the Touché solution, in July 2013.

Braccia stressed the importance of having a credit union's MRM strategy work uniformly and updated across the institution's different platforms.

For example, a credit union wants to avoid a scenario in which a member uses the credit union's online banking site and declines an offer for more information about refinancing a car loan. Later that day, while making a branch transaction, a teller could offer the same member the same refinance deal declined earlier, setting up a bad experience, Braccia said.

“Even though the member probably could probably use that loan refinance, the fact that the teller asked about it again, even though it was declined a couple of hours ago, can send a number of bad messages that can undermine credibility,” Braccia said.

“It can send the message that the credit union doesn't really know me,” Braccia said of the software. A screen shot from Touche is pictured above.

“It can suggest that the credit union just wants to sell me a loan rather the help meet my financial needs. But suppose the teller says 'Mr. Braccia, I see you declined our auto refinance offer earlier, but we really believe it could save you money, could I share some of the details with you later'” Braccia said. “It gives the whole conversation a different feel and leaves the member more open to hearing about why the loan refinance is a good idea.”

Beth Ann Kovacs, national sales and implementation manager for the SEDONA Corp., said she takes a different approach when speaking to credit unions about MRM. The King of Prussia, Pa., company markets a program now in use at more than 250 credit unions.

Kovacs explained she tended to focus not only on the ways an MRM program works externally – supplying information to front-line staff to interact with members for example – but also on what she described as MRM's internal functions, such as gathering information across the whole credit union about how different situations with members are being managed.

Kovacs used as an example a credit union that is seeking to strengthen its noninterest income by looking at how it is managing its fee income. A good MRM program will enable the credit union to gather information from all channels. That can teach leadership learn whether the call center staff waives fees too often or whether a given set of members needs help understanding a policy because they keep incurring fees, Kovacs explained.

Kovacs also stressed the long-term nature of MRM.

“Implementing an effective MRM system is a marathon, not a sprint,” she said, adding that measures of its effectiveness would include reduced costs and greater responses from promotions, increased noninterest income and more efficient uses of channels.