IRVINE, Calif. — The marketing advantage credit unions have enjoyed over banks during the recession could be slipping away.
The perception of CUs being the most trusted financial is apparently not as great today, according to Member Research, which suggests now may be the time for credit unions to focus more attention on keeping members who have joined after their flight from banks.
Member Research came to that conclusion after completing extensive research with credit union members nationwide and speaking with its CU clients. A telltale sign is the drop this year in CUs' Net Promoter Score (NPS) - the well-known benchmark of customer loyalty. Member Research reported that while credit unions' NPS is still excellent at 78%, that number dropped from a 2008 high of 83.1%, based on research the company conducted the past two years.
"We are already seeing credit unions' trust advantage drop off a bit because all of the negative press about banks is pretty much residing," said Mike Anstead, SVP-sales and service at Member Research. "With trust being the driver in the flight from banks, now credit unions are looking at how they keep what they have, so these new members don't start moving it out."
Member Research is working with credit unions nationwide to help them determine the products, services, or image changes that may need to be made to stem a potential outflow of members. Neil Goldman, Member Research senior partner, advises that credit unions create an "exceptional member experience, one that is both relevant and distinct to the member. We have seen over the years that 'build it and they will come' did not work with community-chartered credit unions. You don't just open the doors and members come in - that didn't happen because credit unions probably didn't provide brand value distinction."
The core growth issues CUs wrestle with have not changed, Goldman insisted. "We still have convenience challenges, rate sensitivity, and competition from the Internet. Trying to be the low-cost provider is virtually impossible today, so we are left with what is the value distinction we can offer. That is where the Net Promoter Score and similar advocacy indexes can help."
While Member Research's latest NPS findings were derived by interviewing more than 100,000 members, Goldman urged CUs to look at their own results. The key is not so much the score, but if the score has changed, and what's driving the score, he said. "For positive change to occur and NPS scores to improve, the drivers of member responses - the reasons for their ratings - must be tracked and acted on. It's the underlying drivers of an NPS score, and the credit union's response to them that matter most."
Member Research has learned service levels, access and convenience, problem resolution, fees and rates are some of the key reasons why members promote the credit union or speak poorly about it. "The key is to understand the specifics of each for your credit union," Goldman said.
Satmetrix, in conjunction with Fred Reichheld of Bain & Company, co-developed the NPS to measure customer loyalty across hundreds of organizations. Companies obtain their NPS by asking customers a single question on a 0-to-10 rating scale: "How likely is it that you would recommend our company to a friend or colleague?"
