More so than other financial institutions, credit unions’ health depends on the choices made by consumers who use their products and services.
Whereas banks can solicit supplemental capital freely, engage in speculative real estate deals, concentrate their holdings in business lending, and generally have greater wherewithal to take part more readily in loan participations and derivatives, the factors of regulation and philosophy focus credit unions’ business strategy on serving individuals.
So, what could be more crucial than understanding the needs, values, desires and behaviors of your target audience?
And what could be more pivotal than recognizing the characteristics that define that target audience, so as to concentrate your organizational energy toward serving existing and potential members with those traits
The information age has empowered credit unions and other consumer-facing organizations to solve those riddles with facts as opposed to suppositions. In recent years, as thorough data analysis and review has been validated as standard operating practice when making decisions of any magnitude, investments in customer analytics platforms has grown by leaps and bounds.
These organizations have recognized a positive return on that investment because of member/customer analytics’ ability to create operational and marketing efficiencies while also identifying or affirming growth opportunities.
Member/Customer analytics’ impact manifests itself primarily in two respects: improving the member experience, and shaping the very nature of that membership. Those ambitions interlock, in that you shape your strategy to incentivize and reward behaviors that breed the qualities you desire — greater engagement and loyalty.
By this point, data analysis has identified the precise revenue from, and cost of, every activity and transaction within your organization, as well as the progression of consumers through your various products and services. No number should be a mystery, no forecast a product of anecdotal guesswork.
This information is crucial, because one of credit unions’ central missions is to provide affordable and honest financial services to the masses, which heightens the need for efficiency — not just operationally, but also in member acquisition and retention efforts.
To achieve the best return on investment from those efforts, use customer analytics to answer these two questions:
- Which member demographic groups and behaviors produce the highest levels of engagement, loyalty and longevity?
- What types of members are most likely to become ambassadors for your credit union, drawing like-minded friends, acquaintances, business associates and family members?
Acquiring, onboarding, nurturing and retaining members consumes staff and financial resources. Churn — especially high and frequent churn — prevents credit unions from recouping even that initial investment. Higher retention rates means that sales and marketing expenses decrease relative to sales.
And what is the best retention tool available? High-quality service.
In the new world, that term applies to not just face-to-face interactions, but also to the range and accessibility of your product and service offerings, the frequency and caliber of your communications, and the ease of use of your digital platforms.
Critically assess your organization’s service competencies by asking questions such as:
- Do you offer a full range of channels in which you can communicate with your members? Do you know which channel each of them prefers?
- Do you personalize offers for members based on predictive analysis?
- Are you missing out on touchpoints because of poorly placed ATMs?
- Have you reaped the benefits of the new geotargeting ad tool you offer?
- Have you noticed a particular point of friction on your website or app where consumers decide to not submit a loan application?
These are the types of questions that customer analytics can answer, enabling you to continually improve the member experience, achieve an optimal membership composition, and in turn, bolster your bottom line.