Why Member Retention May Be the Key for Your Credit Union

Happy Small Business Week! Okay, credit unions aren’t technically small businesses, but they are next door neighbors. Small Business Week has been around since 1963 to recognize the critical contributions of America’s entrepreneurs and nearly 28,000 small business owners.

Even though credit unions are considered not-for-profit organizations rather than businesses, most run their day-to-day operations similarly to a small business. That includes the need to focus on member/customer acquisition and retention. 

A recent study by BIA/Kelsey and Manta surveyed nearly 1,000 small business owners (SBOs) and discovered that they spend more than half of their time and budget on retaining current customers. Why? Because it can cost up to ten times more to acquire a new customer and repeat customers spend 67% more than a new one. Study results show that 61% of SBOs generate over 51% of their annual revenue from repeat customers and 62% of them spend most of their annual marketing budget on customer retention. That’s a stark contrast to the same study a year ago with only 6% spending more than half their budget on retention.

Additional reasons to focus on current members/customers? The study further showed that current customers are easier to up-sell and cross-sell and they’re more likely to refer friends and family to a business by word-of-mouth, online reviews and social media sites. 

Reaching Loyal Members

If your credit union is willing to think like a small business, then it can learn a lot from this study. We already know that credit union members are some of the most loyal customers around. Here are some ideas on how to reach them:

• Reward loyalty – Whether you create your own rewards program or sign up for an established one like Invest in America, rewards should go beyond credit cards.
• Relationship discounts – Have a member that’s had a checking and savings account for years and want to get their auto loan business? Reward them for it by offering them a rate discount. This is just one of many other ways you can build on established member relationships.
• Use your data – Mine your member data to uncover valuable cross-selling opportunities.  
• Get your staff on board – None of your efforts will mean a thing unless your members are informed of what your member retention strategy is and how they can help. Carve out time in your staff meetings to review tactics or hold staff contests to make member retention fun. You can also offer specialized staff training to get everyone on the same page.  
•  Tap into social media – Stay on top of what’s being said – negative and positive – on social media sites about your credit union. Make sure to monitor, comment and engage whenever you can. If your credit union hasn’t already dived into the social media world, now’s the time to do it. Remember, it all begins with a solid social media strategy.
• Keep current – When it comes to technology, it’s easy to fall behind. If your credit union doesn’t already have a mobile site or app to reach its mobile members, don’t worry. A website redesign using responsive design can accomplish all that and more. 

Whether you use one or all of the above ideas, it will be worth your while. Member retention is an affordable and effective way to grow wallet share at your credit union. Plus, you’ll be keeping your current members happy – and what credit union doesn’t want to do that?!