When considering service and sales performance — whether it’s front office or back office — the key is consistency. While averages are necessary as overall performance indicators for the credit union, averages are not what members actually experience. Instead, they experience a range of both highs and lows in the institution’s performance.
As a result of specific experiences within the span of those two points, members form opinions and make important decisions about their relationship with the institution. When underwhelmed by their experiences, one increasingly common decision they may make is to simply switch financial institutions.
In the US, 43% of banking customers have already switched or are planning to switch their main bank and 40% of these individuals state poor service as the main reason for doing so.
It’s a beautiful thing if a credit union is on the receiving end of a switch, but unless the new institution can consistently deliver engaging service with very little span between the highs and lows, these same individuals are likely to switch again. So how can credit unions mitigate these service gaps, hedge attrition, and avoid having members leave the institution as quickly as they come in?
Nearly fifteen years ago, CUNA held town meetings across the country to learn why people chose to do business with a credit union given all of the other banking choices available. The one unifying thread throughout the focus groups was that members valued these institutions for their “personal, friendly, caring service.”
Members’ expectations haven’t changed much since then. The main difference is that now, if they don’t receive the treatment they expect, they’re willing to take action.
Understanding The Needs Of Switchers
No credit union is entirely immune to these behaviors, especially if members feel that the service doesn’t consistently meet their expectations over time. So what does it take to keep current members where they are and attract new ones who will stay with you for the long haul?
Recent research of 50,000 financial consumers by Ernst & Young uncovered exactly the type of behaviors that these individuals expect. Respondents shared that their financial institution must:
Personalize service to them
Be willing to serve them
This doesn’t sound too complicated, until you consider the complexity of a typical financial organization — with potentially hundreds of member-facing personnel, delivering thousands of transactions across multiple branches and channels month after month. Each of these many moving pieces must be directed toward one common objective: to deliver consistent, engaging service so that members feel the credit union knows them and is personalizing its efforts to support their needs.
J.D. Power and Associates 2011 Retail Banking Satisfaction StudySM Note: Multiple responses were allowed. Responses of less than 8% are not shown.
A Three-Fold Tipping Point For Credit Unions
Credit unions should want to keep the gap between their service strategies and those of the competition far and wide. But that’s sometimes easier said than done. For example, the American Customer Satisfaction Index — a widely adopted tool for tracking customer satisfaction trends across multiple industries — has revealed startling trends in overall ratings for credit union service quality.
Source: American Customer Satisfaction Index™(ACSI) 2009-2012) Support EXP Client Service Leaders – Based on a joint study with Callahan & Associates and Support EXP | Support Financial Resources
Notice the three-fold tipping point in the illustration, including:
A decline in 2012 credit union member satisfaction
A narrowing gap between credit unions and their banking counterparts in 2012, as for-profit institutions experience an uptick in customer satisfaction.
Historical inconsistencies in member satisfaction over time
According to these indicators, some cooperatives are currently at risk of losing their competitive advantage by surrendering the very things that consumers are actually demanding most.
A Move From Lagging Indicators To Leading Indicators
To counteract this trend, credit unions need to identify the right ways to track and plot their service strategy and ensure that each move brings them more in line with their membership, not the competition.
For example, in the EXPerience to Results Model, the specific benchmarks applied (called the Right Measurement & Metrics) actually wrap around the entire organization model, which helps move the credit union toward achieving retained, repeated, and referred business (a.k.a the Right Results).
Rather than providing lagging indicators, the EXPerience to Results Model measures a credit union’s service performance as it’s occurring – in a live environment and at the behavioral level. This is where true performance optimization and transformation becomes a reality.
Source: EXPerience to Results Model
The ability of staff to engage members in such a way that they stay longer with the organization, buy more from it, and tell others about it is one of the main differentiators of successful credit unions from their for-profit peers.
Source: Ongoing research Support EXP Client Service Leaders – Based on a joint study with Callahan & Associates and Support EXP | Support Financial Resources
Once your institution knows what members want to consistently experience, you should invest in specific strategies to treat them in a personal, knowing, and willing-to-serve manner. This includes creating the right structures, developing the right people, and establishing actionable, forward-looking tools at a behavioral level to inform your efforts.
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More About The Author
Rhonda Sheets, co-author of the EXPerience to Results Model, has trained nearly 5,000 managers and executives in the core aspects of organizational alignment to customer experience objectives. For the past 25 years her organization has measured over 500,000 service and sales experiences in the live financial service environment worldwide. She can be reached at firstname.lastname@example.org
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