What Gets Measured, Gets, Done: The following article is one of six that, as part of Credit Union Journal's ongoing series on growth, takes a look at measurement metrics. The other articles can be found in the related links box on the right.
ST. LOUIS — Measuring branch performance requires looking outside the walls of the credit union as well as inside, says one design and implementation firm that recommends monitoring business results at nearby bank branches.
Paul Sumner, VP of consulting at NewGround, advises credit unions to make sure they have their finger on the pulse of their competitors, "and understand what they are doing."
Sumner suggested regularly visiting the FDIC website to check bank branch performance in the category credit unions look at closely to gauge branch success — deposit growth. "These are your competitors and you have the advantage of being able to see how they are doing at the branch level," Sumner pointed out. "It allows you to size up your competitors and see how you are stacking up in terms of the overall market."
To dig a little deeper, Sumner suggested credit unions measure growth in the number of accounts per member. "So you are not just looking at overall asset growth, but you are also looking at what you are doing with the members you have."
Increases in walletshare speak to the effectiveness of the front line staff, asserted Sumner, and the ability not only to address members' needs-which makes it wise to track front-line turnover rates at each branch. "That is something that is a really good indicator of how effectively a branch is going to be able to compete in the long run," offered Sumner. "Members' ability to stop in and see someone they trust — someone they trust to give them an informed opinion about a specific product or service-is very important today. The tighter you can keep your staff the better you will be able to grow accounts per member and your overall asset base."
CUs that want to take branch metrics a step further are seeking direct feedback on member satisfaction, and not just through traditional surveys. "It's through tools they have at their disposal," Sumner pointed out. "For example, their websites. We have an increasing number of clients who are enabling real-time chat and other website means to seek out member comments. They want to get real anecdotal evidence of either good or bad member experiences and take action quickly to make sure the good experiences are repeated and the bad ones are not."
Credit unions may be focusing more closely on metrics since timelines for new branches to become profitable are tightening, according to Sumner. "Whereas in the past, many credit unions set five years as the time in which a branch would become profitable, now many have cut that to three."
With profitability windows shrinking, CUs are also scrutinizing data on potential new markets. "They are proceeding very cautiously, from an analytical perspective, and making sure they can distinguish between good and great site locations, so they can build a business case for getting to profitability as quickly as possible."
Typical data: proximity to their current membership, competitive density, population growth trends, and demographics. "Increasingly credit unions are looking at psychographics, as well," shared Sumner. "It's not enough to say that I am trying to find the 20-somethings and cater toward the younger market. There are many different financial behaviors among the younger demographic depending on their personal situations — are they just graduating from college or have they started a family and need to buy a home? Credit unions want to more finely identify the target members and go after them."
