Credit unions wage a constant marketing battle against other financial institutions. Every day, members receive incentives from other banks and credit unions, enticing them to transfer their checking accounts, mortgages or business loans. With only a limited number of prospective members, credit unions need to prevent existing clients from being wooed away by attractive offers.
Most credit unions have a major advantage over retail banks in terms of their ability to provide a higher level of personalized customer service. In theory, members should be made to feel like a valuable part of the credit union family. One way to ensure this level of membership satisfaction is through relevant, timely communication, which allows members to feel more involved and connected with the credit union. Direct mail communications or e-mails can include "letters from the president" or explain key initiatives within the credit union. These pieces can also cover local branch changes or community and member events.
While general communications are important to member satisfaction, offers for additional services are critical for upselling existing members. Bad contact data impacts a credit unions ability to make these offers and expand member relationships. According to a 2009 Experian QAS survey, only 47% of financial institutions have a documented data quality strategy. Allowing contact data to go bad hinders communication efforts, and ultimately hurt the bottom line. Credit unions are negatively impacted by bad data in three main areas:
Areas Of Impact
• Operating Budget: Every time a piece is incorrectly mailed, the credit union wastes valuable operation dollars on a mailing that will never reach the member. In addition, extra mail expenses are incurred every time a piece needs to be re-sent.
• Staff Time: Often, when a statement or e-mail is bounced back, staff must re-process returned communications to prevent additional documents from being sent back in the future, pulling staff away from other important tasks.
• Member Service: If a credit union is unable to contact members in a timely fashion, service needs may not be met. If a statement does not arrive, the member may call member service upset, or worse, they may leave the credit union for another institution out of frustration.
While these complications may seem like a part of everyday business, they can be drastically reduced or avoided all together. To ensure the accuracy of data, credit unions can take a few simple steps that will ultimately make a big difference to the bottom line. These include:
Steps CUs Can Take
• Identify specific areas where bad data accumulates: By tracing returned correspondence back to its source, CUs can change processes to reduce or eliminate bad data.
• Do regular database check ups: Bulk-processing data can help ensure that contact information continues to have standardized formats and inaccurate information can be flagged.
• Remove duplicate records: If the same member is receiving a communication multiple times, it could cause frustration or distress around the CU's protection of member information. CUs can eliminate duplicates by running standardized member information through de-duplication software. The software will recognize common elements and identify potential matches for review.
• Compare files against the National Change of Address: Members often forget to notify the CU when they move. Credit unions should run their files against the national change of address file, which tracks the old address and forwarding address for up to two years. Credit unions can access this file through a USPS service called NCOA. The software is purchased, leased, or developed by an NCOA licensee. By running a member database against the file, credit unions can reach out to members who have reported a move and verify updated contact information. This will improve mailings and enhance a member's perception of the credit union.
While many credit unions acknowledge they need to proactively stay in touch with members, they are not able to do it because of bad contact data. To stay efficient and effective with outreach efforts, credit unions need to improve member contact data and ensure the accuracy of communications.
These steps are a low-cost method for improving contact data that can easily be implemented by any database administrator in a short amount of time. These techniques will help credit unions improve the delivery of communications and ultimately increase the opportunity for long term, profitable relationships with members.
Joel Curry is COO with Experian QAS, Boston