Credit unions place a heavy emphasis on building member satisfaction and loyalty. Yet for many, developing deeper levels of trust and loyalty with their members remains an elusive and perplexing process. This may be because these organizations frequently neglect a critical ingredient–the “heart” or “emotional bond” between the credit union and its employees and members.
This bond, called “engagement,” goes beyond a single moment in time and is defined by the enduring behaviors, attitudes, and the emotional connection, if you will, of your employees and members to your business. Credit unions that understand and manage engagement enjoy several important benefits, such as:
* Higher levels of member loyalty.
* More positive word of mouth referrals.
* Reduced turnover and training costs.
* Greater competitive advantage and increased market share.
So, what is engagement and how can it be measured?
We define engagement as the emotional bond or attachment that your members develop during the repeated and ongoing interactions they have as satisfied and loyal members. When members are engaged with you, they are emotionally connected, passionate about your products and services, and aligned with the purpose and direction of your organization. You can also apply this principal to your employees.
Engaged Members, Engaged Employees
In fact, engaged members start with engaged employees. Your members may be loyal to your brand, but ultimately their engagement level will be based, at least in part, on the service they receive from those that support that brand. Through surveys, Allegiance has found that members/customers begin to form a strong emotional bond or attachment to an organization and its products and services after they experience multiple episodes of helpful and enjoyable service. Helpful service creates enduring member-employee relations and builds real passion and commitment toward the organization.
Under such positive conditions, members feel better informed and knowledgeable about various products and services offered by the credit union. As members become more confident in their customer-company relationship, additional helpful experiences stimulate even stronger and more enduring emotional attachment toward the organization. This is the beginnings of customer engagement.
Over time, exceptional service and learning experiences produce a belief and feeling that the credit union cares about the overall well-being of its members. When this happens, members “buy in” and “relate to” the vision and direction of the organization. They gain a sense of protection and security, and as a result, develop a strong emotional bond. The end result is totally engaged members who identify with and express themselves through the credit union’s products and services, which they purchase and use regularly.
Through the Allegiance Pulse of America survey, for instance, which examines consumers’ experiences with their banks and credit unions, we have been able to segment customers/members into three categories: engaged (35%), disengaged (9%), and swing (56%). Swing consumers are those with the potential to be engaged or disengaged. This group is where the highest opportunity exists for credit unions to increase the number of engaged members and sell more products.
Our survey also found that engaged consumers demonstrate behaviors such as referring other people, buying more products more often, staying longer in a business relationship, and remaining loyal even when faced with poor service or a bad experience. Engaged consumers told others about their good experiences. The survey showed that engaged consumers told 4.1 friends, while swing consumers told only 2.8 friends. Engaged consumers were also more effective at getting people to actually take action (change financial institutions). Engaged people were 23% effective, swing people were 15% effective.
To fully engage both employees and members, credit unions should employ systems that create a two-way dialogue for gathering comments, suggestions, complaints and compliments. Then the organization needs to manage that feedback and act on the results. Research shows that even when a member or employee complains, if the complaint is resolved quickly, the employee or customer will actually be more loyal to the organization.
Surveys To Measure Emotions
In addition to gathering and responding to feedback, regular surveys of a representative sample of employees and members can be used to measure emotions and engagement levels. These can also help the credit union identify things that need to be improved as well as things they do well. This makes members and employees feel their voice is being heard. Specific suggestions from both employees and members can lead to reduced employee turnover and increased member loyalty and engagement.
Please understand this: Being good at engagement is not a secret. It is accomplished with science, combined with best practices and the right technology and consulting solutions. Credit unions that invest in improving employee and member engagement will gain a competitive advantage that is difficult for competitors to duplicate.
Engaged employees and consumers are more than satisfied and more than loyal; they are emotionally connected to a company. For businesses that value and manage engagement and loyalty, it is proven that they also enjoy higher profits and faster growth than those that do not. That is why engagement is one of the most powerful emerging business concepts of the 21st century.
Adam Edmunds is co-founder and CEO of Allegiance.
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