Considering An Expanded Charter? Don't Get The Research Backward
When an institution is considering an expansion beyond its original charter, research is indispensable to determine if the expansion is a wise move. It can help zero in on geographic areas, profile ideal new membership and track the continued satisfaction of core members. Specifically, research can assess perceptual, transactional and behavioral components in four areas.
In expansion to the community at large, awareness surveys assess the extent of name recognition and brand identity among the general public. It's important to track the growth and positive nature of awareness on an annual basis against a quantifiable goal. For example, an institution recently set a 10-year goal that 85% of individuals in the community were to be aware of it and of those individuals, 85% were to think positively of the institution.
Since the success of an expansion depends on gaining new members who will contribute to the institution's growth, profiling research identifies the ideal target of an expansion-e.g., more borrowers or more depositors-against a baseline of current profitable membership.
Since Select Employee Group (SEG) relationships have proven significantly stronger and more profitable than relationships with the community at large, SEG research can identify companies that are not credit union-affiliated whose employees fit the profile desired for expansion.
If increased business results in declining service quality, an expansion can produce a backlash from membership. Institutions that conduct baseline research before an expansion and follow it with continued monitoring of the core members' service experience afterwards to insure high service levels will retain their competitive edge.
Research can be used proactively to determine which markets represent the best awareness and growth opportunities. In our view, one Midwest credit union did it backwards. In an attempt to expand its field of membership outside its city limits, the credit union sat back and waited for adjacent communities to call. That's how they "planned" to choose expansion areas, but the notion "Build it, and they will come" works only in the movies. For better results, let data be your guide and actively decide your future.
Mike Anstead is VP-Sales and Service for Member Research. He can be reached at (310) 643-6753 or by email at manstead