BOCA RATON, Fla.-Put a group of people in a room and ask them about their banking relationships, and a fountain of angry complaints begins flowing. Yet most of those people never close those accounts or move to a credit union.
The reason, said one person, is that those "push" reasons are seldom stronger than the "pull" a CU may offer, particularly for consumers unaware of the CU option at all.
But there is a lane wide open to credit unions on what Neil Goldman calls "the PFI Highway," even if there are potholes. Goldman, a well-known researcher for CUs who heads his own firm, noted that judging from research on consumer attitudes alone, CU lobbies should be jammed with former bank customers. But there are reasons that's not the case, he told CO-OP Financial Services' THINK 12 Conference.
"Why aren't we seeing bank growth of 10% or 20%?" asked Goldman. "Because there is a significant difference between loyalty, which is what Net Promoter Score measures, and satisfaction. We have noticed consumers have high pain thresholds and low expectations. Banking is a maintenance activity. This is a reality check. We do everything important that the consumer wants, and what are we left with? Satisfaction only. We haven't wowed them in any way. That doesn't give us the business. How recently have you talked about your dry cleaner with your friends and family? That is a maintenance activity, too."
Lane blockages in the open lane on that PFI Highway were demonstrated in video of a focus group Goldman conducted in Palm Beach County, Fla., just prior to the THINK meeting. Consumers were critical of their banks, but also expressed great confusion over credit unions, saying they didn't know of any, that the concept of membership seems "snobby," and that you have to be in a labor union to join.
What CUs Must Do
Goldman said reseearch shows 60% of consumers are, at best, uncertain about credit unions.
To address those barriers, Goldman said CUs need: Better marketing, and perhaps even a national signage symbol; better Switch Kits that address the "emotions" involved with leaving another FI; to better target the reasons people move FIs, which are primarily lifestyle changes; to become better at selling; and stronger appeals to the reasons people say they select FIs, including low fee or free checking, technology and convenient locations/ATMs (people don't differentiate between the two, he said).
"When we see results we are not thrilled with, it's either an operational issue or it's a marketing/perception issue. We are competitive, but the consumer just doesn't know it. We have to do maintenance well, but it's not enough. We have to offer enhancements."
