Callahan & Associates' analyst Lydia Cole is outlining crucial ratios for marketing managers in a four-part series. Below is a description of the accounts per member, from Part 2 in the series. The leader table that follows lists the states with the top accounts per member in the second quarter of 2012, according to FirstLook data of more than 6,900 credit unions reporting. Final second quarter data is expected August 30.
Accounts Per Member
The number of accounts per member – loans and deposits – is driven primarily by the credit union’s business plan but also by its field of membership. A credit union that offers a full array of financial services and has allocated the resources required to deliver those services should have a much higher account-to-member ratio. Credit unions can use a four-step business plan to do this. The first component of this strategy includes developing products and services that meet member needs such as checking accounts, a variety of investment-type deposit products, credit cards, and real estate loans. The second component of this strategy includes developing a variety of delivery channels that fit the field of membership. Examples include the appropriate number of branches, a call center that processes loans, and online systems that provide both transaction and deposit and loan account processing.
The third component of the strategy includes competitive pricing strategies and the fourth component of the strategy is developing a sales culture that is effective at both deposit and loan products. Credit unions that want to provide niche or limited services to members will need to continually monitor the membership for validation of the strategy and be aware of competitive forces that could copy the strategy. Credit unions that do not have a strategy to routinely purge dormant or single-service inactive accounts will likely also have a low account to member ratio.
How to calculate: (Number of loan accounts + number of share accounts) / total members = number of accounts per member.