Since the challenge of attracting new members is largely one of getting people to change institutions, the question arises, why do people switch? There are two basic reasons: major life changes (moving, marriage, divorce, new job, etc.) and, in the vast majority of all cases, being pushed away by perceived excessive fees and/or poor service.
Attempts to attract consumers who don't fall into one of these two categories by offering money or gifts for opening a new account usually prove futile. People open accounts just to receive the incentive, only to close them later.
The reality is that most people don't seek new financial relationships. It is easier to find members who had a life change or were "pushed away."
For most consumers who seek a new financial institution, physical convenience remains key. The task is twofold: show potential members not only how they can get their money out of the institution easily with ATMs, branches and alternative access channels, but also how they can easily get their money to the credit union with clear confirmation. Ideas such as ATMs that offer copies of deposited funds with receipt, and offsite capture of checks for immediate transfer to accounts would dramatically lessen the need for branches and address the issue of access.
A recent development suggests the immediate urgency of obtaining new accounts and especially the conduit to all else, checking. When people moved in the past, it typically meant a change in institutions. However, recent focus groups have shown that consumers are starting to retain their financial relationships, even across the country. Quite simply, with online bill pay and debit cards, the location of one's checking account becomes irrelevant.
The bad news is that it will become more difficult to attract members who are moving. The good news is that fewer people will leave the credit union when they move, provided they are not pushed away. Two imperatives then are clear and urgent: (1) obtain checking relationships now because their longevity will increase, and (2) communicate (and demonstrate) that access remains effortless when someone moves.
Neil Goldman is President of Member Research. He can be reached at (310) 643-5910 or by email at ngoldman
