Improving Service Quality Using Consumer Segments

Kevin Stang
November 29, 2004

Raddon Financial Group’s (RFG) CEO Member Survey and CEO Strategies Group research show high-satisfaction credit unions achieve much higher levels of service penetration, balance penetration, and overall ROA compared to institutions with lower satisfaction levels.

In determining how to improve service quality within your credit union, first understand the service priorities of your members. Understanding the importance of various service quality attributes to your members is as important as how well the credit union performs on those attributes.

It’s also important to realize how important these service attributes are to your key age/income consumer segments. This allows you to focus service quality improvement efforts on those attributes most important to consumer segments for which you are lacking in share of wallet.

Measuring Service Quality

Measuring service quality may seem as simple as asking your members if they’re satisfied. On the contrary, there are many considerations you must understand about who you’re surveying and how to interpret the responses. First, the most important part of any service quality assessment is ensuring a representative sample is taken. Without proper sampling and/or weighting of responses, you risk presenting a skewed picture of your members’ service satisfaction.

Next, member base dynamics affect your service quality measurement trends. Members join, members leave, and members buy new products between measurement periods. These activities all have an impact on the overall satisfaction levels in your member base.

Finally, both internal and external comparisons are required to understand service satisfaction of your members. Internally, you need to know how well you are performing on the attributes that are most important to your members. In addition, you also need an external benchmark so you know how the credit union is performing on those attributes relative to other credit unions with a similar member base composition.

This is a summary of a paper presented by Kevin Stang, senior strategic advisor with Raddon Finanical Group, at the 2004 CUNA OpSS Conference in New Orleans. Contact him at 630-792-8500 x329 or kstang@raddon.com. RFG provides research-based solutions to over 1,000 institutions nationwide, including member surveys for over 500 credit unions since 1994. For more information about RFG member research services, visit http://www.raddon.com/survey or call 800-827-3500.