As deposits slow and the industry becomes increasingly competitive, many financial institutions are focusing on their customer base with efforts aimed at decreasing attrition and expanding their existing relationships. While research has proven that it is less costly to keep existing customers than to attract new ones, the challenge is to uncover the best ways to serve different member segments while recognizing the necessity of concentrating resources to retain more valuable members.
Online members present a particularly desirable but also challenging demographic for credit unions. They tend to have higher incomes, higher account balances, and they use more efficient self-service resources to access their accounts and conduct transactions. But, these members also tend to already use multiple financial service providers, and are more willing to use online tools to move their funds with ease. Many financial institutions are launching new products aimed at the coveted online banking segment.
While credit unions are aware of the importance of this highly profitable segment, the challenge is to respond to their increasing expectations and make them truly feel like valued members. Understanding the loyalty and needs of this segment is a critical step for developing programs and marketing to both retain and expand these relationships. Traditionally, financial institutions have relied on personal interactions at the branch to reinforce value and customer service. There lies the challenge: Can the credit union website help reinforce perceptions of member value to the same extent that "high touch" channels such as the branch or call center can?
Tactics for Building Loyalty with Online Members
For many members, the online branch is the primary way they access the credit union, and special attention should be given to ensuring that the text, images and tools support the same image aspects as the branch. For others, the branch is one of several channels that they use to interact with the credit union and their accounts based on their needs.
"I love your online email communication tool - it is fantastic. I do not reside locally, and find it a very efficient and timely way to communicate with the credit union. I find the staff to be very responsive to my emails. Others find it hard to believe that I would wish to have accounts with a credit union that is out of state, but I prefer you to any credit union I have dealt with here locally. By far, outstanding service, ease of communication via online, or with a simple phone call to your 800#. Thank you."
Ensuring that the web channel offers the same information, promotions, and capabilities as other options can make members feel that they are getting the same level of service regardless of the channel used. Making information easy to find online, such as fee-free ATM locators and branch information can go a long way towards enhancing perceptions regarding customer service and ease of use. It also shows that the credit union understands their needs.
"I had a hard time finding your phone number when I wanted to call you."
"You should put the telephone number for the branch on the page that displays the branches and their address. Having to select an individual branch and the click contact is not intuitive and I don't always get there quickly enough to be satisfied with the current presentation."
Credit unions are also missing out on opportunities to reinforce member value when their online tools don't recognize existing members. Pre-filled loan applications, access to special rates and streamlined processing all help reassure members that the credit union recognizes them and that their time is valued.
"I don't like how the online CD purchase works. It offers me the non-partner rates when I purchase a CD and there is neither explanation or information that would make me confident to believe I'm going to get the partner rate."
Some financial institutions are actively using the web to create a more personalized experience by showing employee contact information and photos for specialized services such as financial planning and loan applications. Online chat is used to add a personal touch to the product research process.
Allowing members with questions to contact a person by name instead of a centralized email address can also help instill confidence in online processes. One emerging trend is enhancing member's abilities to create more personalized screen set-ups, sort information differently and set viewing preferences in online banking in order to make it easier for members to use. Some online banking programs are including more personal finance capabilities such as the ability to categorize expenses and payments and create personalized reports.
The Internet makes it easier for members to research competitive options, and members who don't find detailed information at their credit union website are likely to turn to other online resources instead of waiting to contact the credit union. This increases the likelihood that they will ultimately select another provider.
"I was trying to find information about the new savings plan and could not locate the information. This is very frustrating."
A recent survey of credit union members found that nearly two-thirds of online members who researched a financial product or service in the past year actually obtained a loan or new account, either from their credit union (41% of total surveyed) or another financial institution (15%). These members were asked which resources were most helpful in their search. Those who used another financial institution were less likely to cite the credit union website as helpful and turned to a wider range of resources, including Google searches, other consumer information resources and other financial institution sites.
Undertaking a detailed review of your credit union's website and implementing the tactics above can improve your online members' loyalty to the credit union by reinforcing their view of the value of membership.