Wednesday, December 8, 2010

Strategic Plan #1 – Increase Member Loyalty

CUNA News Now carried a story yesterday titled, Report: Increased loyalty leads to higher loan volume

The article reported findings supporting the fact that member loyalty is directly associated with lending volume. The December 7th article reads, “Credit unions that want to improve their lending volume should look to increasing their member loyalty levels.” It points out that members classified as truly loyal fulfill three characteristics:

“1. They definitely would recommend their credit union to others;
  2. They definitely would contact their credit union the next time 
        they need a financial product or service; and
  3. They choose the credit union as their primary financial institution.”

That third characteristic caught my eye the most; choosing the credit union as the primary financial institution. I’m wondering, what does it take to make the credit union the primary choice?

Suppose you were to survey your members today, what percentage of them would be using your credit union as their primary financial institution? After reading the article, (can’t afford the cost of the full report) it seems to me that including an initiative in one’s strategic business plans for 2011 to increase member loyalty might make good sense.

As for tactical applications, let’s be serious and not fool ourselves. Increasing loyalty requires much more than making donations to local charities or serving cake on member appreciation day. I’m of the opinion that it involves taking the credit union to a whole new level; a whole new experience for both member and staff. 

This means that the credit union must not only be on parity with its chief competitors when it comes to products, services, ease of use and access, low fees and high yield, it also must provide the member with an experience that excels beyond his or her experience of other similar institutions. Let me explain.

When I worked at The Ritz-Carlton, I learned what it means to create an experience, one that, "enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of our guests." For The Ritz-Carlton, guest loyalty was built on guest satisfaction and that satisfaction was delivered, consistently, day in and day out, throughout all the hotels of its chain, worldwide. Satisfaction was not a tactic existing externally of the “Ladies and Gentlemen” forming The Ritz-Carlton team. No, the desire to provide satisfaction and anticipate guest needs existed deep within each of us. We were trained in it. We discussed it every day at line up. It defined our culture. It was our brand. 

If credit unions are serious about increasing member loyalty, perhaps a simple lesson taken from The Ritz-Carlton might prove to be of value as a starting point. How we define our culture and how we express our brand will determine the quality of the experience we wish to give our members.

While I believe we already have all the ingredients to take credit unions to the next level, I wonder if we’re ready to let go so we might rediscover the common culture and brand we all share, the same one to which Filene himself was so impassioned.

1 comment:

  1. Volume of customer may translate to actual returns but you have to be selective when it comes to approval and sufficient cash flow cycle as well.