How To Effectively Use Research Before And After A Credit Union Merger

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In 1988, there were more than 18,000 credit unions nationwide. Today the number is under 10,000. Economies of scale, technology and greater demands for varied products and services have made it difficult for smaller credit unions to compete. Therefore, like businesses in many other market sectors, they choose to survive by merging with larger institutions.

Pre- and post-merger research can help ensure that merged-in members are retained and well served by the new organization. Research before a merger can uncover the unique challenges or "FUDs" - fears, uncertainties and doubts - of members whose institution is about to merge. Members' FUDs make them wonder how things are going to change and how their rates, fees, conveniences and financial habits will be affected. If members' concerns are known before the merger, communications can be tailored to address their FUDs and products and services developed to ensure they stay with the new organization.

Post-merger research then allows trending to learn if the new institution has done well by those members or, if not, what must be done to ensure retention. The research also reveals these members' unique needs, as distinct from membership at large, so the institution can continue to market to them as individuals.

The fact is people rarely change financial institutions unless they are pushed away. This happens when they are dissatisfied, primarily due to increased fees or diminished service quality. However, members may also close their accounts as a result of life-changing situations, such as moving or getting married or divorced. A merger qualifies as such a life-changing situation. The formation of a larger, more competitive organization is an opportunity to gain new business. Don't miss out by pushing members away. Research their needs, and serve them-and your credit union-well.

Neil Goldman is President of Member Research. For more information, please call (310) 643-5910 or send email to ngold1

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