Superior member service has been a constant for credit unions. Throughout my career, credit unions have scored better than the banking industry on satisfaction, friendliness and trust factors. Studies show that outstanding service is a tremendous competitive advantage and produces better member retention and growth.
For the first time consumer satisfaction with banks rate as high as credit unions, according to the 2018 American Customer Satisfaction Index Finance and Insurance Report. Both industries had a score of 81. Alarmingly, closer inspection reveals that credit unions have scored lower than regional and community banks for the last two years.
Overall, in-person service at credit unions is marginally better than banks (89 vs. 88). However, credit unions lag in mobile banking, selection of financial services, clarity of account information, and opening new accounts or making changes to accounts.
The erosion of credit unions’ service superiority over banks coincides with the increased usage of electronic services being the preferred method for consumers to conduct their transactions. Credit unions and banks are not immune to the current retail shift to self-service through technology. A byproduct of this change is the increased commoditization of banking products. It’s hard to imagine another industry that has been impacted as much as credit unions over the last 30 years, beginning with pushing members to use ATMs to the current state where we want members to conduct their transactions and account maintenance on-line. While trying to minimize and control costs, we, in effect, hastened their abandonment of the branches for the internet. The unintended consequences of this transition to electronic service delivery makes for the phenomenon that, while members become more digitally connected to their credit unions their personal relationships are being eliminated.
The impact of commoditization makes it difficult for credit unions to differentiate on in-person service. In order to improve member experience in this environment, leaders must first understand the “member experience”. Simply put, we must examine ourselves from our members’ point of view – both internal and external members.
Richard Branson, founder of The Virgin Group says “Take care of your employees and they’ll take care of your business”. This advice holds true for credit unions, although I like to state it a little differently. It is my belief that if you take care of your internal members, they will take care of the external members who then will take care of the bottom line.
Credit union leaders must be actively engaged with their members – internal and external – to create a member centric environment. Remember our business model is people. Therefore, service standards and policies must provide staff the flexibility needed to address human issues. Rigid procedures kill service and employee engagement. Conversely, a culture built upon the ideals of service rallies employees around the mission, permitting them to resolve member issues with ingenuity and increases the willingness to identify potential credit union solutions (selling) for the member.
This probably sounds idealistic, and it’s surely easier said than done.
Then why go through this exercise?
The payoff can be huge – enhancing the member experience and satisfaction can boost member engagement and increase member loyalty, expand a credit union’s share of wallet, attract new members, and drive overall growth. Gallup research shows that building emotional bonds with customers can net an average of 23% higher per-customer revenue. Other Gallup surveys showed a customer who is “emotionally connected” to a place of business is likely to spend 46% more money than a customer who is merely “satisfied” but not emotionally bonded. Other research indicates that as much as 70% of purchase decisions are made on emotional, not economic, criteria.
As more member contact and interactions transfer to electronic delivery channels, outstanding service, regardless of delivery method is an absolute. The degree of difficulty in providing exceptional service has magnified due to the varied expectations of members, increased competition and the commoditization of our products and services. Meeting the golden rule, “Do Unto Others As I Wish Would Be Done To Me” is no longer enough. Today, outstanding service providers must operate under the Platinum Rule, “Do Unto Me As I Expect”.
Credit unions must ensure they meet the Platinum Rule standard through all delivery channels to flourish. To achieve this, you need to:
• Focus on who you serve and how you serve them.
• Be open about your processes to enhance experience, build trust, and increase understanding.
• Review procedures and eliminate outhouse and folk lore procedures (outdated, unnecessary and/or burdensome processes).
• Provide pertinent and personalized financial advice and/or solutions to members electronically and in-person.
• Ensure that internal silos and the myriad of deployed software solutions do not create obstacles for members.
• Walk that fine line between compliance and service – do not place the onus of compliance on members.
• If a choice between profit and member must be made, choose the member. – We are “People Helping People”.