(Editor's Note: This article was originally published in October 2017 and has recently been updated for accuracy and clarity)
The availability of information and online services is empowering today’s consumers. With access to more purchasing choices in the internet age, consumers are able to make better-informed decisions about the things they invest in—from coffee and pillows to savings accounts and investment options.
Therefore, it’s extremely important for credit unions to be smart in how they acquire and retain members. Customer loyalty can bring major benefits. And thankfully, strategies for boosting customer loyalty aren’t kept secret. Keep reading to learn how to increase credit union member loyalty through technology, staffing, and personalized services.
How the top credit unions value their members
To start, members value credit unions primarily for the products they offer. The better a credit union’s products—that is, the more money members can save with them—the more members it’ll attract and retain. That’s step one.
The consumer financial services company Bankrate evaluates the best credit unions in the United States each year. Time and again, credit unions that offer cheap checking accounts and high-interest savings accounts, for example, rank high on Bankrate’s lists.
Here are the credit unions that topped Bankrate’s list in 2020:
- Alliant Credit Union
- Star One Credit Union
- Boeing Employees Credit Union
- Quorum Federal Credit Union
- Pentagon Federal Credit Union
Offering affordable accounts and paying high interest rates are certainly ways credit unions can seek recognition. But there are also other ways for credit unions to differentiate themselves and earn loyal members.
Why should credit unions show that they value their members?
Credit unions boost retention and customer lifetime value (CLV) when they go the extra mile to show members they care about them. By strengthening relationships with members, particularly through face-to-face interactions, credit unions can increase their CLV.
According to our consumer behavior research from 2018 , 67 percent of consumers will invest more in a service following an in-person interaction. Through in-person interactions, credit unions can prove that they value their members and, in turn, boost their member retention and profitability. How so?
Reaching out to members on the phone, through email, and on social media can save employees time. But they’ll miss golden opportunities to really connect with the people they’re trying to serve. Only when employees meet with members in person will they get a true sense of what members are thinking and feeling in response to service.
In-person meetings facilitate continual two-way feedback. And there’s no better way to cultivate insight into what members need and want.
Why do consumers choose credit unions over banks?
People often choose credit unions because these member-owned financial institutions offer more customized products based on member interests. With credit unions, members have access to conventional banking products such as checking, savings, and money market accounts and loans. And they typically benefit from access to higher rates on savings accounts and lower costs on borrowing.
It’s also important to note that deposits in credit unions can be federally insured. This means that credit union members don’t have to take on any additional financial risk when doing their banking.
What separates the best credit unions from other credit unions?
While it’s certainly true that the best credit unions offer great products and services, they go beyond to stand out: For example, many leverage self-service banking technology for members on the move. But they also build time into their day-to-day operations for in-person customer service to help those who need a little extra guidance.
Self-service banking tech using the Internet of Things to connect mobile devices with banking systems can allow cash automation, mobile check-in, portable tellers, and more. The best credit unions are constantly finding ways to innovate, ensuring they provide the best customer experience possible to build long-term relationships with satisfied members. (More on technology below.)
At their root, the best credit unions are customer centric—they value relationships with their members over anything else.
Consumers are recognizing several credit unions for their impressive new approaches to technology.
How can technology help sustain a customer relationship?
Technology can make member-business interactions efficient and enjoyable. For example, the Arizona-based Hughes Federal Credit Union has demonstrated how one particular type of technology, a biometric system replacing the need for passwords, can improve members’ banking experiences while also improving employee productivity.
Rich Griesser, the vice president of information technology at Hughes, explains how this new technology functions: “It works below the surface of the skin, reading the vascular signature of the palm, which is unique to each person and replaces the need for manually entering usernames and passwords.”
He also notes that this technology eliminates some of the problems that members commonly have while trying to log on to secure systems. These problems include forgotten passwords in need of reset and insecure passwords, which expose security holes in customer data protection.
While eliminating these problems, this new technology also reduces the loss of employee productivity associated with these log-on problems. In a win-win situation, the system saves employees time and increases member convenience and security.
As Griesser notes, the biometric system is “fast, secure, and easy to use” and has been “a huge success so far.”
What technology options are credit union members looking for?
Biometric log-ons are just one type of innovative technology that appeals to credit union members. In general, they look to technology that makes banking easier and faster. For this reason, online banking and mobile banking are extremely popular, especially among young members.
Interest in easier and faster service interactions also makes technology that allows members to book service appointments in advance and avoid waiting in line very appealing. Check out this article for more information on why lines, or queues, are an issue for financial services companies and how technology can help reduce them.
It’s vital for credit unions to understand the importance of frontline staff, especially during the introductory phase of new technology. It’s crucial that credit unions train them properly to support every product they offer.
How can credit unions optimally position staff to wow members?
Managing staff at a credit union is challenging. Having the right number of employees at each branch with the appropriate training to meet member demand for depositing checks, applying for loans, withdrawing cash, and more is more complicated than it may initially seem.
Credit unions are looking to make their branches more profitable and efficient. The easiest way to achieve these goals is to implement scheduling and queuing software to better meet the needs of a credit union’s members and employees.
How can credit union staff attract, retain, and grow relationships with younger consumers to strengthen the vitality of member bases?
One important way that credit union staff can attract, retain, and grow relationships with younger consumers is through a queue management system. No one likes long wait times. And for younger consumers—who are accustomed to the speed and efficiency of online interactions—spending a lot of time waiting in line can be particularly unappealing.
Appointment booking empowers credit unions by solving two key problems that just about every financial institution has. The first problem is that everyone goes to their branch around the same time. The second is that branches often don’t have sufficient staff to meet crunch times.
An appointment booking platform provides an easy way to increase staff efficiencies. This is because it allows people to pick convenient times to visit their credit union branches, and it allows branches to optimally schedule staff for member visits.
To learn more on how to make your branches’ operations more profitable and efficient, check out our blog post “6 reasons why your bank needs a scheduling and queuing solution.”
To help build community and loyalty with younger consumers, credit unions can also host bank events, such as educational workshops on home buying, or “shred days,” where members can securely destroy cancelled checks and other private documents. Credit union staff can promote these events on social media, making sure that they are visible to younger consumers.
Why is an efficient staff important to increasing member loyalty?
Members value positive interactions with efficient staff. When members have questions about different financial products and services or their overall financial well-being, they need knowledgeable, trustworthy, and available people who can provide answers. Efficient staff is key to assuring members that their financial well-being is in good hands. And member confidence increases loyalty.
In addition to taking advantage of technology and staffing effectively, credit unions can use personalization to increase member loyalty. Member personalization is the opposite of a one-size-fits-all approach to business. Businesses that embrace personalization work to ensure that they customize interactions with members to meet their specific needs and interests.
What are the most effective member personalization methods for credit unions?
Customer relationship management (CRM) systems are key to member personalization. To provide effective personalized services, credit unions need to ensure that each member’s data is accurate in their CRM databases and integrated with other systems that can make use of it, such as marketing automation systems.
It is crucial that every member-facing employee has access to this data so members don’t have to explain their needs over and over. Providing member service representatives with a quick snapshot of members’ transaction histories can go a long way toward improving member experience and building trust.
Additionally, simple things such as knowing why members are visiting their branches and knowing their names are extremely valuable in effective member personalization.
How can member personalization help your credit union?
Ultimately, member personalization goes hand in hand with efficient staff and innovative technology use to help credit unions build loyalty among members. With happy and loyal members, credit unions can continue to thrive as financial institutions well into the future.
About the author
The JRNI team is made up of product, customer, and technical experts who are focused on driving personalized experiences - for our customers, and for theirs. The JRNI blog enables us to dive into how retail and financial organizations can use personalized experiences to grow profitability, build stronger customer relationships, and drive customer loyalty.
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