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

Are you asking your members for input and ideas?

My credit union doesn't ask for my input. In fact, it doesn't ask me for anything other than my username and password. I would imagine this is typical for many credit union members, especially as we move away from personal interactions and towards doing all of our business online.

It's really too bad since one of the attributes credit unions lean on most is a claim of better personal service. This loss of personal interaction puts a lot of distance between you and your credit union members.

If you are looking for a way to reconnect with your members and to find out what they are thinking and needing, you should study this website.

This is some information from Starbucks' top-prize-winning entry in the 2008 Groundswell Awards in the Embracing category.

MyStarbucksIdea.com is the first social media website from Starbucks. Our mission is to help us connect with our customers by co-creating the future of the company with them.

MSI (as it is known to the community) has four components:

Share: Where community members post their Starbucks Idea. Anyone can post an idea.

Vote: The site let's you easily see what other people have suggested and vote on the ideas you agree with. The community decides what's important and what is not.

Discuss: Inline comment streams allow community members to discuss ideas with other customers and about 40 Starbucks Idea Partners from various departments answer questions and provide insights to the discussions.

See: The "Ideas in Action" tab is the proof. Here is where we announce what actions have been taken and have further discussion around top ideas.

These four components provide a ongoing loop of discussion, interaction and, ultimately, action.

MyStarbucksIdea.com is the first true two-way conversation point for customers and the company to interact on a wide scale. We've found that customers very much want to have this conversation.

Traffic to the site has been immense right from the beginning. But the participation rates have been what is truly exciting. We've had nearly 75,000 ideas submitted in less than six months, with many ideas receiving thousands of votes and hundreds of comments.

Some ideas have been surprising to us: the top all-time idea is around having "Great Conversations" at Starbucks. More often, however, it has helped us prioritize our current efforts and initiatives.

From big ideas, like healthier morning and food options and bold coffee discussions, to smaller initiatives such as a "reusable cold cup," in just a few short months My Starbucks Idea has become a major force in helping direct the future of the company.

People sure are passionate about their coffee! Being that credit unions are built on co-operative principles, I think something like this could work wonders for a credit union that is really open to member participation.

What do you think?

Tim

Guest post: It's about the spinach, stupid. And the carts. And pretty much everything else

(Or what credit unions can learn from the mind of a disgruntled big box shopper.)

Dear SuperDuperBigMart [and credit union professionals],

When your new store [read: branch] opened near my house a few months back, I deliberately stayed away for a while. About three days to be exact. Finally the lure of cheap toilet paper [read: free chequing] became irresistible.

But the line. Oh sweet-mother-of-smiley-faces, the line. It. Could. Not. Have. Moved. Slower.

And the bag of spinach I picked up was already expired. Kind of weird since you just opened. [read: What? You’re out of envelopes at the ATM?]

Then there were the carts [read: brochures and other marketing paraphrenalia] scattered everywhere. Carts crying out for some sort of cart corral, if not a full-fledged cart jockey or two.

Today, I went back. Again, the parking lot was a mess. No one greeted me when I walked in the door [read: I thought it was about relationships?]. You didn’t have what I wanted [read: practical financial advice] and the items you did have, didn’t have any price on them [read: weren’t priced right].

When it was time to check out, you only had one cashier open [read: wicket]. No problem, I thought. I’ll use the self-checkout [read: profit-maximizing, expense-minimizing ATM]. But the technology worked against me. Finally, it stopped working altogether.

"Please wait for employee assistance!" it kept announcing in its loud, electronic voice. So I waited. And waited. And waited some more. But no one came to help. They walked right by. I just stood there helpless with my juice boxes and my garbage bags [read: U.S. cheques and other transactions].

Finally, I left my cheap toilet paper [read: free chequing account] in the cart and high tailed it out of there—‘cause seriously, I don’t have time to be ignored, no matter how low your prices are [read: don’t you want my money?!].

But then I thought maybe I should tell someone about my terrible, no-good, very bad day(s), so I logged onto your website. I used all 150 allowed words to tell you my story and then you sent me this—or rather, your computer did:

PLEASE DO NOT RESPOND TO THIS E-MAIL
Please be advised that your email has been sent to the Customer Relations Department. You will receive a response in the shortest possible time. We thank you for visiting www.SuperDuperBigMart.com. We look forward to serving you on your next visit. Thank you.

Pardon me? The shortest possible time? By whose assessment? Not mine, obviously, or you would have responded by now. How about an actual service promise?

Making matters worse, I also read this on your website:

SuperDuperBigMart is committed to giving Canadians the best shopping experience in the marketplace by delivering everyday low prices, exceptional customer service, top-quality merchandise, and extensive community involvement, philanthropy and corporate social responsibility. SuperDuperBigMart has repeatedly listed among the 50 Best Companies to Work for in Canada, as published in Report on Business Magazine.

You know. I’ve always wondered what makes people go postal [read: bank?]. And now I know. Thank you, SuperDuperBigMart, for reminding me there’s more to being super than just having 'SuperDuper' in your name.

Oh, and if you’re thinking of calling me today, please note I’ll be out re-buying all the things I tried to buy at your store yesterday, this time with my three-year-old in tow. [read: Where is Mount Lehman Credit Union anyway?]

Signed,

Some crazy lady in Surrey

Colleen

About our guest blogger: Colleen Pepper is a freelance writer and editor specializing in the credit union industry since 2001. Colleen writes radio spots, campaign collateral and more serious things like annual reports, brochures and newsletters. This week a client asked her to write a letter telling members their account manager died, demonstrating that she can do funny and funerals—although whether a letter is the right choice for the latter is a blog in itself. Colleen has a B.A. in Communications and History from Trinity Western University. In her spare time, she is a mom and aspiring mystery shopper. She’s recently discovered how much she hates SuperDuperBigMart—or at least the sparkly, brand new one by her house.

BarCampBankSeattle: What I learned in session 1

Like I said in yesterday's post, I attended day one of BarCampBankSeattle. In retrospect, this gathering makes all of the one-way, sit-in-the-audience listen-to-the-smart-person-on-the-stage sessions that I have attended seem so positively old-school. Did I mention the event only cost $35 and included four meals! It has definitely struck a cord—all the bloggers that attended are feverishly posting their thoughts about what a positive event it was.

Before it all mushes together in my head I will attempt to summarize my learnings from day 1. There is a Wiki being put together at the BarCampBankSeattle website that will capture everyone's take on all of the sessions.

Session 1 was a discussion on loyalty economics and the net promoter score led by Denise Wymore. Based on the theories put forth in the Ultimate Question by Fred Reichheld, Denise believes strongly that the traditional annual member satisfaction survey used by most credit unions are worthless and are actually working against the credit union movement. Credit unions are very proud of their 80% to 90% satisfaction rates yet wonder why their member numbers are stagnant. Without real information to impact real change, credit unions don't improve with this information.

She proposes a new monthly survey with two questions: 1) On a scale of 1–10, how likely are you to recommend the credit union to a friend or family member? and 2) Why?

Here's the scale

• Customers rating 9–10 are called promoters
• Customers rating 7–8 are called neutral
• Customer rating 0–6 are called detractors

The difference between the percentage of a company's promoters and detractors is the Net Promoter Score (NPS). For example, if 50% of a company's customers respond with a 9 or 10, and 30% respond 0–6, the company's NPS would be 20%.

To put it in perspective, Harley Davidson has a NPS of 81%, whereas the average credit union is at 50%.

Denise's big question to the group was can software be developed to sift through and analyze and make sense of a massive database of why answers? There are huge enterprise solutions out there, but nothing for the small credit union. Sounds like a great opportunity for a software company to contact Denise and get the ball rolling!

To sum up:

• Marketing is dead (her opinion not mine!)
• Word of mouth is it
• We are in the experience business but we don't talk about it
• What your organization measures is what it values

I was very impressed with Denise. If your credit union is looking for a culture consultant who gets it, check out her website.

I'll continue to make sense of my notes and memory over the next couple of days!

Tim