Newsflash: Credit unions losing favor with young consumers!

This press releases from MyCUSurvey.com caught my eye this week. 

MyCUsurvey.com National Member Research Reveals Credit Unions Have Less Appeal for Young

The latest survey revealed a direct correlation between the age of credit union members and customer satisfaction. According to the findings, there is a 30 point difference in satisfaction ratings between older members (over age 65), and younger members (under age 30); older members are just more satisfied with their credit unions.

Great, so in addition to the fact that credit unions are having extreme difficulty attracting new young members, we now know that they are doing a poor job at satisfying those young members that they do have. So, what to do about it? The founder of the study, Dr. Jack Bieda, offers this advice:

“The convenience of web and mobile banking and other trends are undermining credit union member satisfaction. It’s clear that credit unions need to find a way to attract younger members and get members to visit their branches for a more personalized banking experience in order to cement the member relationship.”

I agree that credit unions need to find a way to attract younger members, but thinking that getting them to visit a branch will do the trick is exactly the opposite of what young people want. What they want is "the convenience of the web and mobile" that most credit unions simply don't have!

This advice is like telling the record stores of a decade ago that the best way to combat digital downloads is to get young people into their stores. Or advising the newspaper industry that the best way to combat Craiglist is to find a way to sell more classified print ads.

How about advising credit unions to become better at web and mobile banking?

Tim

Thing 15: Measure something other than satisfaction

September is 30 things I would implement or consider implementing at my credit union if I was a credit union leader.

Thing 15 of 30: Measure something other than satisfaction

The credit union industry loves its member satisfaction surveys. Stats like "95% of our members are satisfied with our credit union" make for great pull quotes in the annual report, but they don't do much to propel your credit union forward. All you have to do is look at the plateaued member-growth numbers to see this fact.

At my fictitious credit union we would concentrate on measuring something else. But to be honest, I am still unsure of what! I am certainly not a research expert, so my first step would be to really explore alternatives to the standard annual long-form member satisfaction survey.

Looking beyond the satisfaction survey, there are two main options to consider.

1. Measure loyalty
   The Net Promoter Score (NPS) is growing in popularity. Denise Wymore has been an advocate of NPS and championed getting the Member Loyalty Group off the ground. From Denise's blog, "I am very passionate about loyalty. And many of you know that I’m a Kool-aid drinking Fred Reichheld NPS purist! That’s why it’s so important that credit unions develop a standard methodology for calculating their relationship Net Promoter Score. The Member Loyalty Group has done just that. The beautiful thing about NPS is its simplicity. Fred Reichheld intended the survey tool to be open source, meaning anyone can do it. You don’t have to hire a statistician to calculate the score. Simply ask a random sample of your members the ultimate question: 'How likely is it that you would recommend the credit union to a friend, family member or co-worker?' on a scale of 0–10. Those that score your credit union a 9 or a 10 are fiercely loyal promoters. They will do three things for you:
   
   1. Buy more from you
   2. Market for you
   3. Tell you how to improve their credit union
    
   Number 3 is done by asking the simple follow-up question 'Why did you answer the way you did?'"
2. Measure member advocacy
   Ron Shevlin, a senior research analyst from the Aite Group has this recommendation for credit unions, "Measure customer advocacy (not referral intention). It's a lot more important for credit unions to be perceived as doing what's right for their members than worrying about whether members intend to refer them to family and friends. Why? Because members that think their credit union is an advocate for them will refer them. And referral intention isn't nearly as important as referral behavior."

Denise and Ron are two of my favorite people who just happen to have very different opinions on what credit unions should be measuring. I have heard both arguments on a number of occasions and I do see the merit in both approaches. As a credit union leader, I would make a point of really understanding my options, deciding on the best fit for our credit union and then diligently stick to a standard measurement system over time.

Tim