Glen Urban's book, "Don't Just Relate-Advocate! A Blueprint for Profit in the Era of Customer Power" (Wharton School Publishing), argues that today, consumers are all powerful in the business/consumer relationship. The Internet has given them access to information, choice and simplified direct transactions. In that environment, it's not enough to be responsive; the imperative is to be proactive.
But simple proactivity, such as calling a member to inquire about suspicious credit card activity, has come to be expected from financial institutions. What I like to call "altruistic proactivity" goes beyond preventing a negative experience. It means advocating on behalf of the member. By being altruistic, the institution may lose temporarily, but in the long run it will benefit from increased loyalty.
Actions such as these earn trust and respect:
* Call members who are about to overdraw their account. Suggest solutions.
* Offer a lower interest rate on a loan or an easy transfer from an ARM to a fixed-rate mortgage.
* Do it for them and they will come. E.g., set up online bill pay for members; offer incentives for referrals, to both the new and the current member; transfer a member's account from another institution with minimal paperwork, including setting up their automatic deposits and payments and making sure they go through.
* Alert members to special promotions in which they would definitely be interested.
* Suggest members with significant regular share balances move to money markets or CDs for higher rates.
* The imperative for altruistic proactivity is amplified with users of business services for whom time truly is money. Calling business owners when their balance is low and when funds are needed to avoid overdrafts, for example, is the minimum demonstration of a caring attitude.
Consumers expect no mistakes from financial institutions. What they don't expect is for the institution to go out of its way to benefit them. Exceeding expectations through altruistic proactivity is about becoming visible in a positive way to create loyal advocates for the CU.
Neil Goldman is President of Member Research. He can be reached at 310-643-5910 or by email at ngoldman<at>memberresearch.com.