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By Member Loyalty Group LLC
2015 Goal Setting for Your Voice of the Member Program
Every year at planning time, we receive a great wave of phone calls from Member Loyalty Group participants and non-participants with questions about setting goals for their Voice of the Member Program.
Credit union professionals are tasked with setting organization-wide, departmental and individual goals and are looking for input. This is important because often these goals directly or indirectly affect credit union team members’ compensation.
Deciding on an appropriate goal for your Voice of the Member program, which is typically measured by the Net Promoter Score, can be a murky prospect and managers want to have at least some barometer that will make them confident that it’s not just an exercise in guessing.
Let Experience Be Your Guide
Having collected more than 1.5 million member surveys for more than 60 credit unions in the past six years, we’ve gained some insights about Net Promoter Score movement and the things that can influence it. This article includes some of our general recommendations based on how MLG-participating credit unions approach goal-setting.
We’ll also briefly review our industry benchmark information that can be used as a guidepost as credit unions set goals for the upcoming year and beyond. More detailed information may be found in our complete 2015 Goal Setting Guide.
Understanding Different Types of Member Feedback
Credit unions typically measure two types of member feedback, relationship and touch point feedback (also called transactional feedback). Relationship surveys measure the overall Net Promoter Score for the organization and include very active as well as less active members. Examples of less active members might be members that only have a CD or a loan that they pay for by mail. The feedback from these members may not be reflected in transactional surveys which tend to skew toward very active members. Transactional surveys allow credit unions to identify the experiences members are having during different types of interactions so that they can then specifically target process/service improvement efforts.
Benchmarks & Goal Setting
Most credit unions we work with use their relationship surveys to set their organization-wide goal. Often credit unions will set corollary goals for particular departments or branches based on the transactional surveys. This is important because many of the things that feed into the relationship scores — rates, locations, etc. — may be out of the control of middle managers. What they can control are the service levels or the member-facing processes within their span of control.
It’s our experience that the scores for relationship surveys are typically between 10 and 20 percentage points lower than scores for transactional surveys. Below are the MLG benchmark scores for Q2 2014 for each type of transactional survey and for the relationship survey. The chart shows the low, average, and high score for each survey type.
In terms of estimating score movement for 2015, it’s important to note that higher-scoring credit unions tend to move the score more slowly. Some of the highest-scoring organizations may have to work diligently just to keep their scores at very lofty levels.
Big Changes Have A Big Influence On Scores
As you set your 2015 targets, keep in mind that even the best-performing credit unions have also seen score decreases.
Big changes — even positive ones — can and do negatively affect scores in the short term. When we see large changes like mergers, new home-banking platforms and product or fee changes, we very often see score decreases for a period.
Afterwards, if the change is ultimately positive, we see the scores rebound and then rise after a few quarters. We strongly recommend that credit unions be realistic about loyalty/service measurement goal-setting when large changes are on the horizon. You may want to seriously consider setting a goal which keeps your score level, or even factor in a temporary decrease at those times.
We also recommend credit unions use a relationship score to set an overall organizational goal for Net Promoter. Depending on the methodology you’ve been using and your credit union’s current score, you may want to set more conservative goals until there is more historical data available on which to base future goals.
Finally, we recommend that credit unions recognize that any survey or sampling methodology changes may require a review and update of their goals once a solid base sample is collected.
We encourage credit unions to download our complimentary Goal Setting Guide for more information and additional statistics from our exclusive industry benchmark.
About Member Loyalty Group
Member Loyalty Group is a CUSO formed by leading credit unions in 2008 to develop a common member loyalty benchmark for the credit union industry and is the 2012 winner of NACUSO’s Collaboration & Innovation Award. The CUSO has an exclusive relationship with Satmetrix, the Net Promoter company, to provide credit unions with the most effective tools for managing a Voice of the Member program to collect and act on member feedback that increases loyalty, growth and retention. Member Loyalty Group serves 65 credit unions, many of which are over $1 billion in assets, across the country. For more information visit www.memberloyaltygroup.com
About Net Promoter
Net Promoter is both a customer loyalty metric and a discipline for using customer feedback to fuel profitable growth in your business. Net Promoter has been embraced by leading companies worldwide as the standard for measuring and improving customer loyalty. Financial Institutions obtain their Net Promoter Score by asking customers a simple question on a 0 to 10 rating scale: “How likely is it that you would recommend the organization to a colleague, family member or friend?”
Based on their responses, consumers can be categorized into three groups:
• Promoters (9-10 rating) • Passives (7-8 rating) • Detractors (0-6 rating)
The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net Promoter
Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at email@example.com or 1-800-446-7453.
October 27, 2014
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