Member Loyalty Bolstered by Superior Service Experiences

In you members' minds, it's hard to stand out from other financial services competitors. Here are five key strategies for building brand equity and customer loyalty.


Acquiring and Retaining New Members Through Brand Recognition and Market Differentiation

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 point out,

“…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, p. 1.
***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 yours.

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.



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.

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Nov. 15, 2004


  • Great job adding the 5 ways to succeed!
  • I'd like to see more articles on this subject.
  • No substance, just concepts - need case-study info with examples ...
  • Great job adding the 5 ways to succeed!
  • Would like to see more articles like this. Keep it up.
  • I am really intersted in the strategies for building brand differentiation. Please send more info on why it is important to "Let Your Service Be Your Brand". Also, why is branding your logo important to get new members and what kind of logo is best?
  • I love the aspect of letting service be your brand. The level of service excellence should speak for itself thru clearly defining ourselves from local competitors.
  • sashaNS