All credit unions want more members. And all credit unions want satisfied members. But what if credit unions had members as advocates? Member advocacy is far more important than member satisfaction. According to Business Week, 60-80% of defecting customers described themselves as “satisfied” or “very satisfied” just before they left a service provider.
As Jeffrey Gitomer, bestselling business author, says, “Member satisfaction is worthless, member loyalty is priceless.”
According to a study by CFI Group, 90% of credit union members are willing to recommend their credit union to a friend or colleague and 76% have already done so. So how do you turn your satisfied members into advocates? Here are five simple steps to help you start the process.
Connect with Your Membership
Your members want and need to know that they are more than just a deposit, loan, account number or yet another car in the drive-through on a Friday afternoon. Reach out to them. Learn their names and use them. Demonstrate real interest in their lives, their families, their jobs and other key areas. Hand-write thank-you notes on loans. Reply to their posts on your credit union Facebook page. Don’t fall back on communications just for promotions. Engage with your membership on a regular basis and develop an interactive relationship.
Demonstrate Value
We all know the usual talking points. Credit unions exist not to serve shareholders but their member-owners. Lower rates on loans, higher rates on deposits. Friendlier service. The list goes on. While it’s a valid list and one of which you can be justly proud, do your members know about it? Do you promote it in more than the usual rote way? Advocate members need to know exactly what bang they are getting for their buck, so tell them! Show them, in dollars and cents, what they save with your credit union versus the competition. Include loans, savings and deposits, credit cards and fees.
Respond in a Timely Manner
When members ask questions or make comments, respond as quickly as possible. Nothing is as loud as the silence of an unreturned call or unanswered e-mail. Make your answers succinct and, most importantly, honest. If you do not know the answer immediately, be honest and say so, with the promise of a reply as quickly as possible. Don’t let voicemails, e-mails, and social media messages fade away without responding.
Improve by Using Their Feedback
The best source of information regarding levels of satisfaction and dissatisfaction comes straight from your members. Harness their potential to improve your credit union. When you receive a member compliment, share it with your staff and the membership at large to encourage a culture of shared success and achievement. Track comments (suggestion box, surveys, e-mails, social media, etc.) and act upon them. Members appreciate it when you hear their voices and act in response to them.
James Robert Lay with PTP New Media says, “Think of this: a member has an experience with your credit union online, over the phone or through live chat. When they finish the transaction, they are asked to go to a microsite to complete quick and simple survey. If they rate their experience as positive (4 or 5 on a scale of 1-5) then the thank-you page could ask the member to refer friends or family. If the member rates their experience as not so hot (1 or 2 on a scale of 1-5) then the thank-you page would not want to ask for the referral but display a more empathetic message. There is huge potential for credit unions to invest in member feedback and referrals as a way to grow loans and membership.”
Make Every Member Interaction Remarkable
Strive to make every touch-point with your members one to remember. Every smile counts, whether seen in person, heard on the phone or read in an e-mail. Empower your staff to go above and beyond in the pursuit of member service excellence. See a member celebrating an anniversary, engagement or birth in the newspaper? Take time to congratulate them. Notice a member in the parking lot with a dead car battery? Have a pair of jumper cables handy and help out.
Conclusion
In today’s hyper-competitive world, merely satisfying your members isn’t enough to keep them. Your competition is willing to do a lot more to earn their business and your credit union must be ready and willing to up its game. A great way to start this process and jump-start your next membership drive is by creating advocates out of members.
Mark Arnold, CCUE, is a speaker, brand expert, and strategic planner (www.markarnold.com). This article first appeared in the Texas Credit Union League’s Lone Star Perspectives.Contact Arnold at 214-538-4147 or mark@markarnold.com.
In the field of human resources, “onboarding” is often applied to new employees. But in the financial services industry, the term also refers to the account-opening process or new-account set-up.
A recent report from research firm Bancography confirms the importance of successful onboarding to your long-term relationship with members.
Recent tracking studies measured existing and new customers who opened deposit accounts. The results should be of interest to credit unions, many of which are welcoming record numbers of new members who recently decided to leave their banks.
Bancography interviewed customers six weeks after they opened their new accounts, allowing ample time for the institution to deliver one statement, checks, and a debit card, as well as to conduct a follow-up phone call.
Remarkably, only 80% of the calling sample provided by the institutions included operable telephone numbers. This percentage has not changed since 2005, despite institutions now using systems that require employees to enter a telephone number for each account opened.
Only 74% of new and existing customers received a follow-up telephone call from the institution after opening an account. This percentage has improved since 2005, when only 52% of customers received a follow-up call.
But if an institution starts with only 80% of its telephone numbers correct, and 74% of customers say they had been contacted after the account-opening process, then only 59% of all new account holders received a follow-up call.
The take-away, according to Bancography, is that a follow-up telephone call strongly correlates to higher-than-average levels of loyalty to the institution and quality of the onboarding process.
In various ratings, the difference between those who received a call and those who did not is notable. Measures such as “very likely to recommend” and “very likely to use again,” reveal a ratings gap of more than 10% between those who received a follow-up phone call and those who did not.
The attribute most associated with poor onboarding performance was the knowledge of the employee who opened the account and whether or not he/she suggested other products and services—the cross-sell indicator.
Why the lack of follow-through? The employee might not have been comfortable with the product suite, which affected the opening of the account and inhibited cross-selling, or the employee simply provided poor customer service.
Bancography’s studies offer no indication of why employees did not make follow-up phone calls. Researchers infer, however, that the employee was concerned only about opening a new account rather than offering good service to build loyalty.
The employee’s lack of care will likely carry over to other job responsibilities. Bancography suggests measuring the onboarding process regularly and connecting the results to staff incentives. Improved onboarding practices will have a direct impact on branch-level service quality.
The contact and interaction in the first few months with the new account holder builds the foundation of the financial relationship. For credit unions, loyalty fostered early on will offset attrition and give your credit union a member who uses additional products and services.
As regulators continue to fine-tune their expectations of consumer financial products, they seem unified in their efforts to require transparency regarding fees and information about how financial programs work. And while the credit union industry has always been carefully regulated, there is little doubt that the renewed focus on compliance related to overdraft programs could lead to confusion for institutions without compliance expertise.
Ultimately, there are two kinds of overdraft solutions: undisclosed matrix programs or transparent, fully-communicated programs. Matrix overdraft programs, which were developed to replace the time-consuming, manual task of determining which insufficient-fund checks should be paid, are used by many of the largest financial institutions in the country. These programs use a complicated criteria-based matrix to decide on a daily basis whether or not to pay overdrafts on consumer accounts.
Additionally, matrix-based programs increase compliance concerns because they are non-disclosed products. Since the criteria used to determine which checks to pay are always changing, it is impossible to explain how the programs work. So, an account holder has no idea if an overdraft will be paid or what his or her overdraft limit might be. And in today’s regulatory environment, that spells trouble for the institution. It is important to note that all of the recent criticism by regulators, legislators and consumer advocates has been focused on matrix programs—because they are secretive and unexplainable.
Regulators demand clear, simple disclosure about how things work with checking accounts. To protect your credit union from criticism by consumer groups and give yourself an advantage with regulators, make sure your overdraft program is easy for members to understand. In today’s economy, consumers want to know that their purchases will be covered. And while the majority will never knowingly overdraw their account, they appreciate the security of knowing their financial institution “has their back” if for some reason they don’t have sufficient funds.
Plus, consumers are more inclined to use a program like overdraft privilege—and accept a reasonable fee—when they understand its value and know how it works. As a result, more members will sign up for a fully-disclosed program, which will increase your revenue possibilities.
John M. Floyd is CEO of John M. Floyd & Associates, a profitability and performance-improvement consulting firm. Reprinted with permission from Anthem, the publication of the Northwest Credit Union Association.
The Durbin Amendment has given financial institutions with under $10 billion in assets a remarkable opportunity to grow, according to a recent column in BAI Banking Strategies. Its’ all part of the scenario that, for credit unions, plays out around Bank Transfer Day.
As banks face reduced debit income, they’re looking to incorporate fees elsewhere to replace that lost revenue. This puts credit unions and community banks in a position to offer dissatisfied customers a more attractive alternative, according to Christopher Leonard, chief operating officer and general counsel for strategic consultancy Velocity Solutions.
Credit unions can capitalize on this turn of events by aggressively pursuing new checking relationships by offering free checking, which will reinforce a consumer-friendly market position.
Unfortunately, many smaller institutions aren’t making the best of the situation, according to Leonard. Many fail to proactively spread the word about their advantages.
As consumer awareness grows—and as big banks impose additional fees—credit unions can incorporate five methodologies to benefit from the good fortune brought about by the Durbin Amendment:
1. Take advantage of referrals. Simply ask your members to remember your institution in discussion with friends, family, and acquaintances. Remind them that the credit union provides free checking and stellar service. Consider handing each member a “tell-a-friend” coupon or informative brochure along with a transaction receipt.
2. Show your enthusiasm. Lack of “big bank status” can’t be your only claim to fame to achieve growth. Make sure your employees are enthusiastic and energetic about the credit union difference.
3. Simplify, simplify. Make it possible for new members to open accounts in less than 10 minutes. Account openings need to be painless and conducted with friendly ease.
4. Resurrect direct mail marketing. Because there hasn’t been much incentive for consumers to switch financial institutions in the last several years, direct mail marketing techniques haven’t been particularly fruitful. Potential exists now for direct mail to be more successful. Target marketing will help locate your desired demographics.
5. Fully engage current accountholders. “At a typical community bank or credit union, up to 40% of checking account holders are not actively using the institution’s debit card,” notes Leonard. Target-market these individuals and make them loyal members with increased use of services.
With vigilance, action, and dedication, Leonard believes community-based institutions can take advantage of the growth opportunities provided by the Durbin Amendment.
Further, he suggests, it behooves those institutions to do so, as changes next year to the presidential administration or Congress could erase this favorable environment.
You say the word “role-play” and the staff cringes. Sounds familiar? Role-playing often falls into disfavor with employees because the trainer doesn’t ensure that “realism rules.” Extremely overbearing clients and belligerent employees are the rare minority—not good examples for role-playing scenarios.
When practicing skills, trainers need to encourage a realistic environment. Give employees an opportunity to sharpen their skills in credible settings where the personalities are more real-world. A lot of people don’t like to role-play because the other person plays Attila the Hun. They act over-bearing or obnoxious so as to embarrass or humiliate the other person.
When people do role-playing well, it’s a confidence builder. Because role-playing is interactive, it keeps employees engaged in the training. They get to “experience” handling various situations they face on the job.
“One of the things we did in a basic Mortgage Originator 101 class was to set up application scenarios—one person was the loan officer and the other was the applicant,” explains Debbie Webb, CMC, NMLS instructor at Schlicher-Krtaz Institute in Perkiomenville, Pennsylvania. “The applicant was given the details and the loan officer had to ask the right questions to uncover the information. You can do something similar for your front-line employees. Examples are cross-selling scenarios or how to diffuse a situation with an angry client.”
Tips for Success
For more effective role-playing, Webb offers these tips:
For trainers:Make everyone feel comfortable. “The first time I was in a role-playing situation, the trainer really made me feel incompetent if I didn’t have the answers or responses she wanted to see,” says Webb.
For students:Relax, use the knowledge, and handle the situation as you would for a client—it’s a more natural that way and sometimes makes it easier to get through the role-play.
This story appeared in Branch Manager’s Letter at www.branchmanagersletter.com and is reprinted with permission. Contact publisher Lana J. Chandler at 304-343-0206 or Lana@BranchManagersLetter.com.
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