Cultivating Truly Loyal Members

“The only thing of real importance that leaders do is to create and manage culture.” 
(Edgar Schein, professor MIT Sloan School of Management) 

On average, only 22% of  credit union members are “truly loyal” to their credit union. “Truly Loyal” means they choose your credit union as their primary financial institution, recommend the credit union to others, and contact the credit union the next time they need a financial product or service. These members are proven to use more products and services than those who only meet one or two of the “truly loyal” criteria. And true loyalists are three times more likely to have actually recommended your credit union than members who don’t meet all three criteria.

SO, HOW DO YOU CULTIVATE TRULY LOYAL MEMBERS?

In this business, the price of admission includes a couple of key factors: competitive loan rates, minimal service charges or fees, broad range of services and high quality of service. While you may not be able to make significant changes to the first three, the last factor is within your immediate control. Service quality depends on the performance of your staff. The performance of your staff is directly impacted by the mindset and environment as a whole: your internal culture.

Come back next week  to learn more about how internal culture can help improve membership and employee retention...

The Good News... and The Bad News...

THE GOOD NEWS... 

The number of credit union members in the U.S. has increased byalmost 4.5 million over the past three years, thanks in part to the well-publicized bad behavior of banks.

THE SO-SO NEWS.... 

 Only 33% of all U.S. adults are credit union members.

THE BAD NEWS... 

About 8% of members leave their credit union each year.

According to a recent CUNA study, if fewer than 20% of your members have joined within the past four years, your growth may not be sufficient to outpace your attrition or to see any gains in product usage. To strengthen your credit union, you not only need to focus on attracting new members – it’s also crucial to find ways to improve retention and increase share of wallet among existing members. That means finding a way to increase the number of members who are loyal to your credit union. This is where internal culture comes in.

Stay tuned… 

Principle #7: Cooperation Among Cooperatives

The last of the 7 Cooperative Principles for Credit Unions is the principle of cooperation among cooperatives.
Not sure what exactly a cooperative is?  You’re not alone, and you might be surprised how many organizations you interact with are actually cooperatives.

A cooperative (or co-op for short) is a business that belongs to the people who have organized to provide themselves with the goods and services they need. For example, a farmers’ market is considered an agricultural cooperative: farmers organize a place where they can share the cost of making their produce available for public sale, and each participant benefits from the opportunity. In the case of a credit union, each member participates by putting money into the credit union so that they can also have the opportunity to take additional money out in loans or use other financial services.

Some cooperatives you might be familiar with include Dairy Farmers of America, Ace Hardware, and Ocean Spray.  Many electric power providers are also cooperatives.
As cooperative organizations, credit unions look for opportunities to partner with other cooperatives to better serve members.   Does your credit union partner with other credit unions (such as shared branching) or other cooperatives?  Spread the word!

Throughout this series, we’ve discussed each of the 7 Cooperative Principles for Credit Unions in order to help you identify opportunities to strengthen your credit union’s unique internal culture. Help your employees understand all seven principles and how your individual credit union supports them both internally and externally.  You may just find that suddenly your members are becoming more knowledgeable as well.

Principle #6: Concern for Community

The sixth of the 7 Cooperative Principles for Credit Unions is the principle of concern for community.
In addition to focusing on member needs, credit unions are committed to the sustainable development of their local communities.  This not only means providing a stable local financial resource, it also means undertaking non-financial initiatives to help the community.  Examples include holding fundraisers for a local charity, supporting literacy efforts in neighborhood schools, sponsoring teams to participate in races or other events that support various types of medical research or support, and pitching in to clean up the local community.

Many credit unions are already good at getting employees involved. Is concern for community already part of your internal culture? Then look for ways to get members involved too for a common sense of pride.

It seems like a lot of credit unions are hesitant to talk much to members or the public about their community involvement.  Credit unions by nature tend to be humble.  While humility is an excellent quality, so is sharing – particularly if you share what your credit union is doing in such a way that it inspires others to get involved too.  This presents a twofold benefit: increasing support for the charitable effort, and solidifying your credit union’s brand identity within your community. People tend to do more business with organizations they like, so encourage your employees to share all the likeable things your credit union is doing.