ORLANDO, Fla. - There’s been a tremendous power shift and the more quickly credit unions can adapt to that shift, the better off they will be.
“We have moved from ‘caveat emptor’ to ‘caveat venditor,’” said Neil Goldman of Member Research during his session at CU Journal’s Grow Show. “The power has moved to the consumer, at least in terms of how to reach them.”
The result: what used to work doesn’t anymore. Case in point: AOL. While credit unions have been struggling to grow its membership, AOL has made the case for why willy nilly growth can actually hurt you instead of help you.
When AOL first began, its mission was to bring the Internet to everyone, but just as they were on the brink of fulfilling that mission, something went awry, Goldman said. “In 2005, AOL lost 300 members per hour,” he related. “It’s like a string of pearls. You must tie a knot in the end of the string or the pearls fall right off as fast as you can string them on.”
Why did AOL lost those members? Because the company kept offering special deals to new members while not offering any special value to its existing members, Goldman explained. “Marketing isn’t about campaigns, it’s about relationship building,” he advised.
This is especially true when you consider which of the three sources of distinction is really the only opportunity for credit unions. The first two–operational excellence and product leadership aren’t strong opportunities for credit unions because of the commoditization of financial services. The third one–customer intimacy–offers a real chance to differentiate credit unions, Goldman suggested.
That’s why the Net Promoter Score–a measurement of how likely someone is to refer a friend, relative or co-worker to you–is so important, he added. But credit unions may want to start not with their members, but their employees, and ask how likely they would be to refer someone else to work for the credit union.
