The report projects that the "customer of 2020 will expect companies to know their individual needs and personalize the experience [to] proactively address their current and future needs." Further, customer service is replacing price and product as key brand differentiators, with 86% of buyers paying up for a better experience. Today, consumers expect their service providers to be out in front, filling needs they have yet to realize. Steve Jobs predicted this in 1998: "A lot of times, people don't know what they want until you show it to them."

Consumer behavior is changing, too. Events like having a baby used to trigger member purchases, such as buying a bigger home. But in a study, "The Digital Tipping Point," CEB found that 69% of consumer purchases are motivated not by events but by something a consumer learned via the web, blogs or friends' Facebook comments. CEB said just 38% of consumers who bought a financial product in 2014 learned about it from their PFI. And nearly two-thirds of the difference in the value consumers feel they gain from their PFI comes from how well they believe it helps them track with their goals. And many see this as most institutions' weakest performance area.

In research by MDC and our owner credit union-led Innovation Council in conjunction with Baker Tilly, we've seen companies succeed not just based on products they offer but, rather, on how each consumer feels about the interaction. Some old-school marketers may disagree that consumer experience is as important as product differentiation, but our most recent survey showed 85% of CEOs see consumer experience as a primary focus.

Warm Cookies and What Else?

"Consumer experience" is a hot term today that many feel is simply marketing jargon. But Kurt Schroeder, Principal of Growth Strategies at Baker Tilly, views it from a strategic approach. "It's every interaction your member has with you," he said. "One built on another, from her first awareness of your credit union, through onboarding, and for the life of her membership."

Here's an example: Let's say, Joe, a new "Acme" Cable customer, calls to learn about the company's offerings. He's routed to a salesperson, who explains available services, steering him toward those that match his interests. So far, so good, and installation also goes well. If Acme sends a customer survey now, Joe's response will reflect his satisfaction. But what if the first bill shows charges Joe didn't expect? Or maybe he faces a cable outage in the final minutes of a playoff game? How will these events color his attitude?

Some businesses try to head off problems by sending satisfaction surveys after every interaction, which can be a step in the right direction. But it only reflects certain touchpoints. More effective is reviewing key interactions from the customer's perspective and then addressing them. In Joe's case, was he quoted incorrect fees, or was his rep unaware of added charges? Did Acme find the error or did reps continue quoting wrong fees?

The consumer experience journey has many touchpoints, including whenever a member pays a bill via a mobile device, calls about unusual charges or visits a branch for retirement planning. While it's challenging to stand out in a crowded banking industry, focusing on members' experiences is the best way to drive brand differentiation. It takes a company-wide commitment from the top to find root issues; but the resulting boost to member loyalty and the bottom line is well worth it.

Sarah Lietz is Director of Projects & Marketing for MEMBERS Development Company. She can be reached at [email protected].