Acquiring and Retaining New Members Through Brand Recognition and Market
Delivering an exceptional member experience is key to acquiring and retaining
members in the new era of financial services competition. A. T. Kearney and
Tower Group, recently stated in a joint report:
“To compete successfully in the future, [financial institutions]
need to offer a superior customer service experience across all interactions
with the [institution]. *
The passage of the Gramm-Leach-Bliley Financial Services Modernization Act
of 1999 (GBL) opened the banking and financial services industries to new cross-industry
competition. Banking had traditionally been a regional or local service, but
now national banks are chartered to operate in multiple states and brokerages
and insurance companies are now also licensed to provide banking services, changing
the competitive landscape and presenting a potentially troubling reality for
related institutions not prepared to deal with this new environment.
To compete successfully for members, credit unions must enhance their market
“brand” image by differentiating themselves from their industry
competitors in significant ways, particularly through the provision of superior
member services. TowerGroup Primary Market Research (PMR) has found that the
average consumer has 10.14 financial products with, on average, 4.15
separate institutions** . The report goes on to note that,
“…consumers categorically state that they would like to be
able to deal with a single institution for all of their financial needs, but
the plurality of them feel that no such institution exists that can do this
and do it well…” ***
Rising competition and changing markets are forcing credit unions to refocus
on their core mission and competencies. As A. T. Kearney and the Tower Group
“…the consensus among US firms surveyed is that the world
of retail financial services is a commodity business…thus, most firms
have elected to compete on service aspects…[by focusing on] differentiating
strategies based on customer intimacy and service excellence.” ****
*A. T. Kearney and Tower
Group. Best Practices in Retail Financial Services Symposium, March 2-4, 2003,
***A. T. Kearney and Tower Group. Best Practices in Retail Financial Services
Symposium, March 2-4, 2003, p. 15.
****A. T. Kearney and Tower Group. Best Practices in Retail Financial Services
Symposium, March 2-4, 2003, p 7.
For credit unions, superior customer service is clearly a “must have”
and not just a “nice to have” in the emerging financial and banking
services marketplace. Capturing and retaining new members and deepening relationships
with existing members are key to growing and thriving in these new market conditions.
To reduce that “4.15 institutions” to one, yours,
will require world-class member service that sets you apart from competitors
who may be offering financial services products that are otherwise similar to
Credit unions should consider five key strategies for building brand differentiation
and customer loyalty:
1) Implementing Service Level Management
2) Effectively Managing Brand, Customer, and Contact Center Resources
3) Knowing Your Customers Through Effective Information Management
4) Implementing Communications Channel Consistency
5) Letting Your Service Be Your Brand
Credit unions can use these strategies to deliver member service that builds
the brand equity and market differentiation needed in an increasingly crowded
and commoditized marketplace. Let’s look at the strategic initiatives
in more detail:
Member Acquisition and Retention With Service Level Management
Credit unions that want to survive and thrive in today’s converging financial
services marketplace must maximize the quality of every interaction with their
members and prospective members, regardless of the means chosen for the interaction
(e.g., face-to-face visit to a teller, phone call to a telephone banking center,
or an interaction over the Web). Smart systems can support enhanced member interactions,
providing up-to-date information on the specific member, the member’s
transaction history, and feedback on service level targets and performance.
Effective Brand, Member & Contact Center Resource Management
Rich member service can make your institution “the one I remember”
and “the one I want to do business with.” Brand equity and market
differentiation are built by providing superior member service through improved
real-time management of customer service resources.
Knowing Your Members Through Effective Information Management
Providing access to member contact and transaction histories is essential to
delivering superior member service. Having key information at the fingertips
of member service personnel signals to the membes or prospects that they are
valued, and that the institution cares enough not to make them repeat information
unnecessarily. Efficient service builds your brand equity by equating “member-centricity”
and your institution in the minds of your members and prospects.
Creating Market Differentiation Through Communications Channel Consistency
Maintaining consistency of message, offering, and member service across your
service delivery channels is key to successfully differentiating yourself from
your peers. To insure this consistency across channels you need systems that
ensure message and delivery consistency and provide a universal customer view.
Let Your Service Be Your Brand
Finally, your end goal should be to make your member service experience so attractive
that your products and services essentially “sell themselves” through
your reputation for “member attentiveness” and superior member service
offerings. As noted by A. T. Kearney and the Tower Group, many financial services
offerings are similar, so the quality of your service is the key to standing
out from your competitors.
Truly, “letting your service be your brand” is the shortest and
most effective path to brand equity in the minds of members and prospects. Differentiation
based on member service will provide you with the surest means of acquiring
and retaining members.
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