Ten years ago a Starbucks opened next to a coffee shop in Kansas City, Mo. Today, the coffee shop remains, but the Starbucks is closing its doors, according to the New York Times. Reportedly, Starbucks is struggling across the country, facing slowing sales and increased competition. Howard Schultz, who built the chain, has resumed control in an attempt to revive sales. “Mr. Schultz has said he wants to refocus on the ‘customer experience,’ recapturing some of the magic...He said the company’s decision has been ‘too driven’ by improving same-store sales rather than consumer needs...” The Times wrote. “What we hear from consumers more than anything else is, ‘It’s not that I don’t like Starbucks, it’s that they are no longer relevant to me as they used to be because I’ve changed and they haven’t changed with me,’ Schultz was quoted.
Turning to the credit union industry, consider the following scenario: During a recent management team meeting, Carol and Mark were discussing the results of a member focus group and satisfaction survey. One member, an “old timer” with significant deposits, said he “didn’t feel a connection” with the credit union like he once did. While member service has always been an identifying factor where credit unions excelled, both managers began to feel that members were looking at the service they received as a commodity.
The managers wondered if their members placed less value on what they delivered. This idea perplexed them since they spent their careers with the credit union movement, and they reflected back on members they met in the first years of their work. Back then, most members had an affiliation with the sponsor company, which moved its operations to the south in the 1980s. The relations they have with their members changed over the years. Was their credit union adapting to this change?
I recently talked with two executives from a Fortune 100 insurance giant. They both expressed chagrin at the loss of “customer loyalty.” But these executives were not from the old school–they were in their 30s.
When you hear the terms customer experience,” “customer needs,” “customer loyalty,” does it make you think of your own members and their experience, their needs, and their loyalty? Should we at credit unions be asking ourselves: how relevant are we to our members and have we changed with them? Or are we forcing them to change with us? Are we focusing more on revenue and less on our members’ needs? At the heart of this is the foundation of relationships we have with our members, and possibly the relationships we lost and must regain.
Let’s step back and look at member relations and its relevance to the equation and ask ourselves, “Why, back then, did members like us?” For any relationship to work there must be respect from both sides. In the past, members trusted that the service they received was of an acceptable value. It needn’t be more complicated than that. This is the foundation of the relationship. So where have we gone off course? Why are we now viewed as a commodity?
In the banking world, an executive has to please the investor shareholder while trying to keep the customer happy. We don’t have that challenge. All we are doing is keeping our members (our owners) happy and finding a balanced way to do it.
In our national workshop, Partnership for Success, we stress the importance of “Five Success Points” for which every successful credit union must strive. One success point is strong capital, that being financial capital. I would like to expand this to include a new term: “relationship capital.” We must find a balance between strong financial capital and strong relationship capital with our members.
How do we do that? Let’s go back to the Starbucks example. We need to be relevant to their consumer needs first before considering our own. Said another way, consider their financial needs and then find a way to balance our needs for strong financial capital. So how do we find this balance? Start by building bridges with your members. Hold focus groups to discover and fine-tune their needs. What are their hot buttons?
Going back to the “tenets of engagement” (See The Benefits of an Engaged Employee, CU Journal, Nov. 2, 2007), listen and ask; talk with your members and not “to” them. Ask the hard questions: “What do you think of your credit union?” “Do you feel part of the credit union?” “How can we better serve your needs, not ours?” Within the responses lay the keys to our relevance and, most importantly, strong member-relationship capital.
Ron Schmidt is president of CBS Certified Public Accountants, LLC and Credit Union Business Solutions, LLC, Solon, Ohio. He can be reached at rschmidt
