As credit unions struggle to increase share growth, many are ignoring the potential of one important member segment, the online member. While many credit unions are aware of the importance of this highly profitable segment, the challenge is to respond to their increasing expectations and make them 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.
The Internet Strategy Consortium, a group of credit unions conducting quarterly online research, set out to investigate online member loyalty using a number of measures to assess loyalty and identify improvements. The data, based on more than 11,000 member survey responses, shows that while many members have a strong loyalty to their credit union, opportunities exist for improving service and expanding member relationships.
Calculating Online Member Loyalty
One measure used in the survey to evaluate online member loyalty is the Satmetrix System Net Promoter rating®, which uses the question “How likely are you to recommend the credit union in the future” to classify respondents as “promoters” (a rating of 9 or 10) “passives” (7 -8) and “detractors” (rating of 0-6). The score is calculated by subtracting the detractors from the promoters. The average Net Promoter® score across credit unions in the Consortium was 45%, with a range of 34% to 56%. While this score is not as high as consumer product companies such as Amazon (73%) or Apple (66%), it is still higher than many banks such as Bank of America (20%) and Wells Fargo (9%).
But the Net Promoter ratings are only part of the story – how can credit unions use these results to actually make meaningful improvements? While we’ll be analyzing this data further in the coming weeks, some early insights can be obtained by looking at the member comments provided in the next question after their likelihood to recommend the credit union: What is the single most important reason for your response?
These member comments are extremely useful for identifying problem areas and illustrating issues to employees. Members who are most likely to recommend the credit union in the future made comments related to the credit union’s superior service, online services, and attention to member’s needs:
“Excellent financial help at my branch on recent auto loan. They gave me help to improve my credit score in the future--they cared about my financial future.”
“Of all the financial institutions including other credit unions, I have found my credit union to be the most accommodating of its customers needs. It is also friendly and flexible in order to make the customer happy. Plus, the rates are better than other institutions, in most cases.”
“I like the fact, that I'm considered an electronic customer so I live in another state and still use this Credit Union for direct deposit, primary checking, savings and many online banking needs. Also, my Credit Union is part of credit union services, so I can go to a partner credit union to take care of any ‘at the facility’ type transactions such as wire transfers and deposits.”
Contrast these comments with some from members who are less than satisfied. They are typically related to service problems, being denied for a loan, and online transaction capabilities.
“Things get done when I call the 1-800 number. The branch is not convenient for me. The one time that I did go, the receptionist wouldn't let me talk to one of the people in the office. She just wanted to help me with my name change, etc. However, there were other questions that I had, and she wanted me to ask her, and she would decide if I could go back there and talk to someone. I did not feel like asking my personal banking questions in front of the reception area. So, even though I had more questions (Roth IRA, car loans, etc), I chose not to ask them because I felt uncomfortable. It was like she was the gatekeeper and I had to have the magical phrase to get to sit in a chair and talk about my financial decisions. On the phone, however, the people are very attentive and answer all of my questions.”
“When we needed a car loan you would not give us one. CitiFinancial did with no problem.”
“The quality of service doesn't "feel" like a five star bank and the online services leave MUCH to be desired when compared to banks such as US Bank. Debit transactions don't show up for many days to weeks at times. US Bank records always seemed to be almost in real time.”
“Too much is done electronically. It is difficult to get answers and talk to a person. When I applied for a loan a couple of years ago I was turned down and received a letter. There was no one to discuss it with, no one to explain the reason for something in my credit report which caused a problem.”
What areas should credit unions be looking to improve?
In addition to the areas mentioned above, further insight can be found in the attribute “recommends products that fit my financial situation.” This measure can be an important differentiator for credit unions looking to position themselves as trusted advisors. But the ratings in this area are surprising – only about half of the members said their credit union was “better than a bank” on this measure. Many said they didn’t know how their credit union compared, and about one-fifth said that their credit union was the same.
While most credit unions have programs in place to educate members and help them understand which products are available, it’s clear that members want guidance in choosing the best option for their financial position. Member comments have shown that many members are unaware of the educational tools that are available. Credit unions should review their educational programs to be sure that they are not only explaining products but helping members in their decision process.
Are you interested in learning more about investigating the loyalty of your online membership? Please contact Denise Senecal by phone (800-446-7453) or by email at email@example.com.
© 2007 Net Promoter is a registered trademark of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.