THE PROPOSAL: You’ve been seeing each other for a while. Maybe things started out with a certain intensity. Maybe you just sort of fell into it. Either way, your credit union has a relationship – in fact, many relationships – with its members. This story is about making those relationships better.
What’s in it for you? With engagement comes greater customer loyalty. Employee satisfaction. More successful up selling and cross-selling – and with this, more revenue, greater profitability and maybe even the coveted PFI (primary financial institution) status. It’s easy to romanticize member engagement, but it’s also a practical issue. Without positive engagement, your members may lose interest or even drift away.
THIS THING CALLED LOVE
Admittedly, it can be strange to talk about engagement when it comes to financial services. While we’ve all seen touchy-feely ads that depict the warm, glowy feelings people have for their banks, in reality these ads can feel a little icky – particularly when consumers are still skeptical about the banking industry and skittish about the economy.
But if engagement isn’t the equivalent of a soft-focus frolic on the beach, what is it? Ron Shevlin, a senior analyst with Boston-based research and advisory firm Aite Group, says good definitions are hard to find: “I once read a definition of engagement that said, ‘Engagement is turning a prospect on to a brand idea, enhanced by its surrounding context.’ I had to wonder if they had been smoking something suspicious when they wrote that. The language alone is very 1970s, and I’m not sure how this definition helps me.”
Engagement may be hard to define, but everyone wants it. “Engagement just sounds right,” says Shevlin. “It’s like motherhood and apple pie: You can’t really be against it.” But in order to get a practical handle on what engagement is – and how to get there – Shevlin suggests taking an eye-level view of member interaction. Engagement happens (or fails to happen) wherever you encounter your members. Every branch visit, online page view, text message, phone call, promotional mailer and ATM screen shot is a point of contact. And thus, “I’ve come to define engagement as a series of interactions that strengthen a customer’s emotional connection to a company,” says Shevlin.
In 2011, this takes place across multiple channels. While the primary mechanism for engagement used to be person-to-person contact, now the bulk of a member’s interactions may happen remotely. As a result, savvy credit union leaders must consider a wide panorama that encompasses everything from online banking to calls that go out reporting card fraud to service at shared branches belonging to other credit unions. It’s a big picture.
And if that’s not complex enough, Shevlin notes that different people engage in different ways. “In our research, we’ve found there are three main groups of customers,” he says. They are:
- Consumers who value personal contact above all else. These customers have an average age in the mid-50s.
- People who value getting the right guidance and advice. This group tends to be younger and/or have lower-than-average incomes.
- Members who value operational excellence. They want accuracy, speed, convenience – and they want to be left alone. As a rule, this group is off the scales on income and education. They don’t need advice or personal contact. They know what they’re doing and want to be treated as such.
In other words, keeping members happily engaged isn’t a simple proposition. It means doing everything well. It means providing what members actually want and anticipating their individual needs. It means having the courage and initiative to reach out and the discretion to leave people their space when they want it.
LOVE IS ALL
Sound too complicated for the average human? Engagement is a little like love – complex, strange, sometimes exasperating. But, make no mistake: It’s not optional. Engaging with a changing membership – and their rapidly-evolving expectations – is the only way to succeed.
Ryan Zilker, B2B Marketing Manager at CO-OP Financial Services and the brains behind CO-OP’s Growth Initiative Site, believes the changes underfoot in financial services are nothing short of revolutionary. “The disruption we’re seeing in this industry cannot be underestimated,” he says. “When industries go through these kinds of cycles, organizations face a moment of truth. If you look at Kodak, they did not hedge against the growth of digital photography. In a matter of years, digital photography became the standard and Kodak was stuck. The same was true of Blockbuster. They didn’t take video home delivery seriously, and soon Netflix took over the market.” In turn, Netflix has had to adapt to the new popularity of online video, with still-mixed results.
“The takeaway,” says Zilker, “is that successful companies know what their customers want and deliver it – even when customer demand changes dramatically, sometimes even when customers themselves haven’t figured it out.”
What’s changing for credit unions? One aspect is technology, but the greater issue is access. Many of us can still remember a day when depositing a paycheck meant visiting a branch. You took your paper check and your physical self down to the branch before it closed because that was the only way you would have $20 to spend on Friday night. Talk about prehistory.
Since then, we’ve grown accustomed to ATMs. We’ve adopted online banking. We want to check our account balances on our smartphones, or be able to use our texting capabilities to access our accounts by ATM. We want to call our credit union at 3 a.m. We want instantaneous fraud detection. We want to make deposits by phone and, as soon as possible, we want a wealth of payment, financial management, loan application and member service options available to us via every medium possible – in person, by phone, via the Internet, maybe even telepathically. Did we mention that security is an issue?
The problem for credit unions is that consumers don’t want all this innovation in the fullness of time. They want it now.
Before you can deploy any campaign to increase engagement, you must be ready to provide your members with what they want. Prepare yourself: Expectations are high.
CLOSE, SO FAR
Of course, the flipside of access is remoteness. When members can reach you from anywhere, they spend less time with you. That’s an intuitive challenge, but it’s not necessarily a problem.
According to a global survey by Adobe and Gallup, customers who are extremely satisfied with their bank’s website are seven times more likely to be engaged with their bank, compared with customers who are less satisfied with their web experience. And customers who use three or more website features (online billpay, customer support, financial calculators and so on) tend to be more engaged with their banks than those who use fewer features.
Put another way, remote access doesn’t have to leave members feeling remote. In fact, members recount, over and over, how elated they are to deposit checks using an iPhone or apply for a loan in their pajamas. These interactions aren’t innately less personal. In some ways, they’re more familiar than a typical branch visit.
Kelley Donovan, national sales director for myCUsurvey, an Emeryville, Calif.-based firm that helps credit unions assess member satisfaction, takes this notion a step further. “Because your members experience your credit union through many channels, it may make sense to ask them how satisfied they are with each of those experiences,” she says. MyCUsurvey studies are designed to elicit both general satisfaction ratings and specific information – such as which products and services members would like to see.
“The response (from credit unions about MyCUsurvey’s studies) has been that they’re learning things about their members that they didn’t know,” says Donovan. “Our parent company, PinPoint Research, is a leader in survey design. And we’ve worked with people in the credit union industry to design surveys that will provide the most objective, useful information. But there’s also a value in simply asking members for their input. That alone creates engagement.”
BRINGING THEM IN
Donovan’s point raises another. Providing your members with multiple access options can dilute their personal contact with you. But that doesn’t mean it’s not possible – and maybe even wise – to initiate contact yourself.
Like, how? Tim Bosiacki, CEO of TruStone Financial Federal Credit Union in Plymouth, Minn., had a flash of inspiration one day. What if, in conjunction with their annual shareholder meeting, TruStone invited a handful of members to spend the day learning about the credit union? He floated the idea to Katie Grindeland, Manager, Marketing, who put the event together with enthusiasm – and a little uncertainty.
“We had never done anything like this before,” says Grindeland. “None of us were sure what the response would be. Because our original charter was teachers, I thought we might get retired teachers who had time to spend six hours with us on a work day.”
Instead, the nine members selected came from a cross-section of TruStone’s membership. The most veteran had been a member for 52 years; the most junior had been banking there for less than a year. The group met with everyone from the finance department to loss mitigation to the CEO. They lunched with board members and asked plenty of questions. “At one point,” says Bosiacki, “one member said to me, ‘You know, I thought everything happened at the branch. I had no idea you had a headquarters where these things were handled.’”
Did spending the day with nine members change the course of TruStone’s history? Probably not. Considering their total membership exceeds 57,000, nine members are a minute minority. Still, the day was significant, both for the members who participated and TruStone’s staff, who got to show their hospitality, strut their stuff and ask real members about their perspectives. “I think there was a pride of ownership for our employees,” says Bosiacki. “We were happy they got that opportunity.”
TruStone’s Member Workshop was just part of an ongoing initiative to be transparent, engaging and relevant to members. Other efforts include the School Express Supply Drive, which in August 2011 collected thousands of school supplies and raised $7,600 in monetary donations for underprivileged schools. Adding a human touch to your everyday business probably shouldn’t be your first priority. Being a powerhouse financial services provider certainly comes first. But humanity goes a long way toward differentiating an organization. It creates value that transcends dollars and cents.
MADE FOR EACH OTHER
There are a million ways to reach your members. You should be considering all of them. Does your member call center place outbound calls to offer loans? Does the home page of your website advertise your best products?
On a deeper level, are you serving your members fully? In a recent conversation with Los Angeles Firemen’s Credit Union CEO Michael Mastro, we were impressed by the number of discrete services LAFCU offers. In addition to its full slate of traditional banking services, LAFCU is adding mobile banking and an online financial management tool. They offer insurance services tailored to the needs of firefighters, business lending and consulting (because firefighters often start side businesses), financial planning with special expertise in pension programs – and they had focus groups underway to find out what other products and services their members might like.
To find out more about how LAFCU’s programs are benefitting the credit union, check out “Eternal Revenue Services” in the pages that follow. To understand how LAFCU’s lineup of services benefits members, just consider the life of the average firefighter. Everything LAFCU does demonstrates its commitment to serving its members. It’s recognition of the highest order: A financial institution that’s built to suit.
Can every credit union do the same? It remains to be seen. If Shevlin has any standard advice, it’s this:
- Understand your market. “The notion that you can be all things to all people hasn’t worked very well. The more targeted your efforts, the more impact they’ll have,” he says.
- Be a resource. “Gen Y is hungry for advice and guidance and, if you look at what’s missing from the marketplace today, it’s good objective advice.”
- Go mobile. “I don’t think credit unions large or small can stay out of this area. It’s absolutely game changing.”
Finally, accept – just accept! – that whatever truths you uncover today won’t be news tomorrow. The past few years have brought about unprecedented change in the financial services industry. But the changes aren’t going to stop here. That’s why it’s more important than ever to keep an ear to the ground and maintain alliances that will help you meet tomorrow’s challenges. Whether by talking to members, colleagues, staffers or vendors, you’ll need all the intelligence you can get. In business, as in any fruitful partnership, communication is all.
Sidebar: Consumers Are Moving Their Money
Contrary to what we may believe, consumers are not unwilling to move their money to a new financial institution – at least if results of the J.D. Powers and Associates 2011 U.S. Retail Bank New Account Study are to be believed. This year’s study showed that 8.7 percent of consumers indicated having switched their primary banking institution in the past year, up from 7.7 percent in 2010. That’s good news and bad news for the nation’s credit unions, who might like to court new members but don’t like losing existing ones. What motivates people to make the switch?
- Change in life circumstances.
- Fees and rates.
- Unmet expectations.
- Poor service.
Sidebar: What Did They THINK?
The speakers at THINK 11 had a lot to say about getting members engaged. Click here to find out:
- What Brett King thinks your credit union needs to keep members plugged in.
- Why Jeanne Bliss believes members should love – not like – you.
- How Susan Packard spins innovation into a unified brand.
- Where Porter Gale makes the biggest social media splash.
Sidebar: Generation Y Loves In-Branch Service
Wait, what? According to a benchmark survey of credit union members by myCUsurvey, Generation Y (born between 1975-95) appreciates the great in-branch service they get at credit unions. The survey showed more younger members visiting the branch weekly than any other demographic. Moreover, 72.4 percent described their in-branch experience as “excellent.”
“We know it’s surprising, and not what we typically hear about Gen Y,” says Kelly Donovan, National Sales Director, myCUsurvey. “We don’t think it means Gen Y isn’t interested in mobile banking and other convenience-oriented services. But they want and like in-branch service as well.”
Sidebar: The Tools of Engagement
Need a few ideas for turning up the passion?
- Mobile banking. If you’ve never called your cell phone provider, desperate to negotiate an international data plan because you can’t imagine walking foreign streets without your iPhone GPS, then you don’t know what love is. It sounds remote, but mobile banking is all about intimacy. Wherever your members go, you go with them.
- Rewards programs. Big card issuers are cutting back on rewards programs. That spells opportunity for credit unions that are willing and able to step up.
- Incentives. According to J.D. Power, only 43 percent of customers who purchased an additional banking product in the past year did so at their primary bank. Of the 57 percent that went elsewhere, the leading incentive was a promotional gift card. iTunes, anyone?
- Beefed-Up Branching. Members still want branch access close to home (and work and wherever else they happen to be). How to leverage your presence without straining your resources? Consider shared branching – all the more since CO-OP and FSCC are combining operations (see page 4) and soon-to-be available CO-OP NextGen ATMs (see page 18).
- Consistent identity. Consumers feel more connected to your brand when that brand is consistent in its look and feel. Service should also be consistent across all channels. One area that’s often overlooked is ATM visuals, which can do a lot to convey what your credit union has to offer. “Every time members encounter your credit union, you have an opportunity to make an emotional connection,” says Ryan Zilker, B2B Marketing Manager, CO-OP.