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?!

Help Your Credit Union Stand Out from the Crowd – Part 1: Member Loyalty

  by Amy Neale

In response to CUNA’s Member and Nonmember Survey Results, we thought we’d address three distinct ways you can help your credit union stand out from the competition. To do each section justice, we’re delivering it to you over a three-part blog series. Welcome to Part 1.

Member Loyalty

Now is the time to focus on rewarding member loyalty – when it’s at its highest national level in years. CUNA’s Member and Nonmember Survey shows that nearly 60% of members say their credit union is their primary financial institution (PFI). That’s up from 42% in 2009. Banks as a PFI have shrunk from 56% in 2009 to 38% today.

And with 57% of members “extremely likely” to recommend their credit unions to others, don’t you want to give them even more reasons to recommend you to their friends and family? The right member loyalty program can help accomplish that.  

Rewards

People like to do business with organizations that treat them well. While credit unions tend to inherently treat their members well, you need something to set you apart. That differentiation can come in the form of a member rewards or loyalty program.

When you hear “rewards program,” chances are you think of a credit card rewards program – and you’re not alone. Rewards point consultant Brian Kelly discovered in a study that 73% of Americans are enrolled in either a credit card rewards program or frequent traveler program.

While your credit union may have a successful credit card rewards program, it might be time to think above and beyond points when it comes to rewarding your members. It might be time to think of rewarding member engagement as well as credit card usage. This member engagement can come in the form of growing your credit union’s auto loan volume, wallet share and membership.

Does your member loyalty program help your credit union achieve these goals? Adding to or changing your rewards program could do just that. In addition to credit card rewards programs, there are programs out there that help members save. In this tight economy, it’s a surefire way to show your members that you’re putting their interests first. Can you think of a better way to grow member loyalty and help your credit union stand out from the competition?

Invest in America is an award-winning membership enhancement program from CU Solutions Group that can help your credit union grow. Click here to learn more.

Gaining the Competitive Advantage for Your Credit Union - Part 3: The Ultimate Reward

 by Amy Neale

Below is Part 3 of a four-part series we've done on Gaining the Competitive Advantage for Your Credit Union.

Does your credit union’s member rewards program begin and end with points earned for using its credit card? Time to think bigger than the competition. From your grocery store and pharmacy to big box chains, everyone is offering their customers rewards far beyond points.

Instead of offering your members a contingency-based program – they have to spend to earn – why not offer them a program that rewards them just for being a member? A program like this could boost your member loyalty while enabling your credit union to tie its core products to the rewards.

A good example of this idea in action is CU Solutions Group’s member discount program Invest in America (IIA). In a 2012 survey, participating credit unions were most satisfied with these IIA benefits: the ability to offer member discounts (80%), earning additional non-interest-income (69%) and increasing value of membership (68%).

The program that IIA participating credit unions were most satisfied with? The Sprint Credit Union Member Discount, which has 1,806 participating credit unions and has saved members more than $244 million since it began. 

So, you can set your credit union apart by offering your members and business members discounts on their wireless service, all while earning incentives for your credit union – just for promoting the discount to your members. A win-win for everyone!

The Link Between Credit Union Employee and Member Loyalty

by Joyce Campbell

“I love the services my credit union provides, but I really dislike dealing with Susan. She doesn’t seem to care at all about my accounts, or her job for that matter. I’ve even considered moving my accounts because it makes me think this may not be a good place to do business if she is so unhappy working here!”

Have you ever heard feedback similar to this from a member, or perhaps you’ve said something comparable when you receive poor service from a business? I think most would agree that loyalty to a business is greatly influenced by the level of service received from employees of that business. Although most managers understand that engaged employees lead to a better customer experience, only 15% report significantly helping in that area according to a survey by Temkin Group.¹

Engaged employees exhibit qualities of loyal employees, similar to those of loyal credit union members. These qualities include:

• Powers of “connection” – Employees want to feel connected to their employer, which includes intellectual, emotional, and personal connections. When these types of connections exist, loyalty to the credit union is strengthened along with the desire to perform at or above expected levels. Employee and member loyalty is strengthened when they have this power of connection with their credit unions.
   
• Satisfaction of benefits – Just as our members want (and expect) competitive products from the credit union, satisfaction with benefits influence employee feelings of credit union loyalty. These benefits don’t have to be costly. In fact, voluntary perks such as non-medical benefits have been found to drive employee loyalty to an organization.²

• Two-way traffic – The expectation of loyalty is that it will be reciprocal. Recent studies indicate that a “loyalty gap” – the perception of loyalty between the employee and employer – has increased in the past three years representing a widening disconnect. This disconnect, if not narrowed, could create disengagement and loss of productivity within an organization. Loyalty can be increased by having career conversations with employees through mutual discussions of meaningful reasons to stay with the credit union. Similarly, conversations with our members regarding their future needs and how we can assist with those will increase their loyalty to your credit union as well.

Loyalty, on the surface, may seem to be simple to achieve. That’s true, as long as you keep the above qualities in check for both the employees of your credit union and the members you serve.

¹Temkin Group, a market research and consulting firm
² 10th Annual MetLife Study of Employee Benefit Trends

Related Services: HR Consulting Services, Incentease, Compease, Performance Pro

Meaningful Discounts = Increased Credit Union Member Loyalty

by Van Barker

Credit union branches have historically been a “go-to source” for meaningful discounts on items such as movie or theme park tickets. These discounts created the tangible benefit of increased branch traffic and the equally important intangible benefit of increased member loyalty. Over time, the combination of credit unions’ high level of service, competitive rates and delighters such as member discounts helped the credit union movement establish loyalty and trust as clear competitive advantages over larger financial institutions.

The growth of e-commerce and online banking makes it imperative that credit unions expand their discount programs beyond local, in-branch offers. Specifically, developing a cohesive and well designed “member discounts page” on your credit union’s website will effectively increase your member loyalty, website traffic and cross-selling opportunities for core products. In fact, findings from Kelton Research revealed that 85% of members would like more discount offers from their credit union and 37% of members would increase credit union usage due to the availability of discounts.

The Invest in America team has helped hundreds of credit unions provide meaningful member discounts by providing a full range of turnkey programs with free marketing collateral and web design that include discounts from trusted U.S.-based companies like GM, Sprint, Dell and Intuit. To learn more and easily increase member loyalty, please feel free to contact us at investinamerica@cusolutionsgroup.com.

Related Services:  Invest in America, Credit Union Member Discount from GM, Sprint Credit Union Member Discount, Dell Discount, Tax Services Discount