When it comes to your members, you know more than you realize. Thanks to modern data archive and member resource management systems, there is now little shortage of customer information-both individually and in aggregate.
The challenge is no longer what a credit union knows about its members; the challenge has become how to access that information, incorporate it in real-time, and respond to it with each transaction.
Across industries, consumers expect personalized attention. For example, savvy restauranteurs understand the importance of knowing their regular diners' names, food allergies, or favorite bottle of wine. Fund-raisers know which hot-button issues generate contributions, and customize their appeals to maximize response.
Credit unions have likewise taken a more personal approach to their members' banking. Tellers are encouraged to recognize clients and greet them by name. Credit offers are customized to meet the specific situation of each borrower. Increasingly, specific information about each member is used to better respond to each transaction. In fact, credit unions frequently cite superior member management as a key differentiator when attracting new members and retaining current ones.
The Unfortunate Disconnect
Front-office employees often have qualitative information that can enhance strategic decisions and should be included in back-end data systems. Conversely, detailed member data needs to be instantly available when making a member-facing product decision. Unfortunately, there remains a disconnect between the front-line personnel handling transactions and the back-office information repositories where member data is stored. Credit unions must bridge this gap if they are to develop an effective member-centric strategy.
Designing and implementing a member-centric strategy increases loyalty while at the same time ensuring uniformity to deposit product offers, lending decisions or discretionary fee waivers. When effectively deployed, these strategies not only help understand why a member may be asking for an exception-to match a competitor's offer for example-but also documents these decisions into future back-office decision processes.
Building A Member-Centric Strategy
A member-centric strategy is not simply providing good customer service; it requires planning to manage the many sources of data and increasing number of transaction points. This means taking a holistic look at member strategies and ensuring that each transaction process serves the common goal. While each transaction-regardless of where it originates-should be personalized for the individual expectations of the member, it should also serve the business goals of increasing revenue, reducing member attrition and improving the member's experience.
Use a four-part approach: Plan the strategy; Set an adoption timetable (including a pilot; Measure customer feedback and acceptance; Quantify the results.
This first step toward a holistic member-centric approach is to have a strategy. Quantify all existing information available about each member, whether from internal systems of record, or external data sources and ensure that this information is readily available whenever required. This information should include critical qualitative input from member-facing staff.
Let's look at an example: While traveling on vacation, Joe Eyesaver buys three pairs of sunglasses (one for himself, his wife and his daughter). Unfortunately, Joe's credit card issuer declines the transaction, citing triggers of fraudulent behavior. (People usually only buy sunglasses one pair at a time.) Generally this might be a good fraud prevention strategy to prevent unnecessary losses, but this purchase is anything but fraudulent. In fact, when Joe calls his CU he is quick to point out to the call center rep that he used the same credit card to purchase his airplane tickets to the location city where he was making the purchase.
Achieving A Measurable Impact
Unfortunately, in most cases this qualitative member feedback will never be integrated into proactive member strategies. However, the credit union that does so will have achieved a measurable impact on member experience and lifetime value.
Strategies should allow for insights from member-facing employees. Actively engaging member-facing staff to align strategy designs with practical, real-world experience will improve adoption, better satisfy members, and meet objectives. This collaborative approach ensures complete adoption from member-facing representatives and measurable member experience improvements that are quantified by improved member retention and new member acquisitions.
Starting with a pilot project, launch the rollout. This should include mechanisms to adjust the strategy and update data as the project advances. Next, measure member response, both in terms-of reactions to changes in member service levels, as well as any changes to responses to product offers. Finally, keep a scorecard; measure the results as they apply to the credit union's long-term goals.
Establishing objective measures of success is critical to ensuring the piloted strategy meets financial hurdles without creating attrition with existing members. Establishing clear metrics for success and accurately monitoring metrics ensures consistent outcomes.
Credit unions that successfully implement holistic, member-centric strategies immediately improve operating efficiency. The resulting member treatment strategies are easy to understand and apply consistently across the credit union, resulting in improved member service scores as members come to appreciate the value of their relationship.
Investing in member-centric strategies can ensure a CU's long-term competitiveness by differentiating the organization from its competitors and by training employees to proactively pay attention to what is most important to the best members.
Returns on investing in superior member-centric strategies can exceed 20% the first year of implementation. These results can be compounded in subsequent years due to repeat business, new member referrals and member loyalty.
John Taylor is a Senior Business Consultant with Experian's Global Consulting Practice.