MADISON, Wis. (2/4/10)--Credit unions need to capitalize on consumer angst, update delivery channels and sharpen their value proposition for non-members, especially young members, according to a new report from the Filene Research Institute.
The report is titled, "Customer Experience and Credit Union Opportunities: A Collaboration with McKinsey and Company." Filene collaborated with McKinsey research to conduct qualitative interviews with 31 credit unions about why credit unions command stellar member loyalty and how they can leverage that loyalty.
Making existing credit union members more satisfied is very difficult, and probably the wrong goal, says the McKinsey surveys. Consumers consistently identify credit unions as trusted financial providers, loyalty doesn't translate automatically into increased wallet share or membership growth, Filene said.
The report identifies several challenges credit unions face:
- While consumer perceptions of credit unions are demonstrably better than those of community and national banks, credit union loan market share is flat or has declined over the past five years;
- Consumers age 18- to 34-years old trust banks more than credit unions;
- Between 40% and 60% of employees in the banking sector are ill-suited for directly serving customers or members; and
- Branch managers are the most important link in good or bad customer experience.
Filene also identifies themes for credit unions frustrated by high member satisfaction but low membership growth:
- Credit unions should invest in functional value, such as Web tools and convenient delivery, while building a friendly but assertive sales culture;
- In addition to economizing, healthy credit unions should look to attract high-performing sales and management staff at a discount while the employment market is depressed; and
- Credit unions will earn the biggest satisfaction gains by focusing on members during "moments of truth" fraught moments such account opening and problem resolution when perceptions are most likely to change.
The customer experience survey, on which most of the report is based, draws on 3,900 respondents who offered their views on retail banking. The survey measured satisfaction, asked what matters most for driving satisfaction, and sought to validate the relationship between satisfaction and value creation.