Members are the lifeblood of your credit union. That’s why CUs pour so much effort into acquiring new ones, with marketing campaigns and promotions designed to get new members to open accounts.
But while member acquisition is crucial to your credit union, there’s something that’s arguably even more critical: member retention. Although it’s important to find new members, you shouldn’t focus all of your efforts there, lest you neglect your responsibility to continually provide remarkable member services and personalized financial solutions.
You’ve probably heard the expression “make new friends but keep the old—one is silver, the other gold.” In the case of credit unions, new members are silver, while existing members are 24 carat gold.
Why should your credit union prioritize member retention over member acquisition? Let me count the ways…
It costs more to acquire new members than to retain existing ones
This is a big one: keeping credit union members loyal and satisfied is a lot cheaper than generating new members.
You’ve probably heard that it costs five times as much to acquire a new customer as it costs to keep an existing one. While credit union membership is a little different from customer loyalty, it’s still true that member retention is far more cost-effective than member acquisition. CU member retention has also become more financially vital as big banks and new fintech “disruptors” muscle their way into other areas of the financial and banking industry.
In short, building lasting relationships with your members and inspiring loyalty is more important than ever.
Member churn can kill your credit union
Your members are an investment. And it’s important to nurture and grow that investment by catering to members’ needs and building mutually beneficial relationships that stand the test of time.
While some churn is inevitable, too much can destroy your credit union and make it impossible to carry on. That’s why one of the biggest mistakes that any credit union (or, really, any company) can make is to become complacent.
Don’t take any members for granted and assume that they’ll stick around forever. Focus on satisfying members and giving them reasons to remain loyal. The more that you invest in members, the more that they will invest in you (more on that below…)
Long-term members invest more in your credit union
The longer you retain a member, the more opportunities you have for additional investments. The next time a satisfied member needs money for an auto repair, a family vacation, or bill consolidation, they’ll turn to their trusted credit union to find financing.
For non-financial businesses, just a 5% increase in customer retention rates can lead to a 25% to 95% increase in the company’s revenues. While financial institutions are unique from other companies, it’s still been shown that returning members will invest more in your credit union. Loyal, satisfied members will keep coming back, which provides a huge return on investment for your credit union.
Retention rate is a reflection of member satisfaction
There are many metrics you can use to gauge member satisfaction. By using a CU member experience management solution like Sogolytics, you can gather important member feedback, including Net Promoter Scores and Member Satisfaction Scores alongwith insights through Key Driver Analytics and Text Analytics.
In addition to those important metrics, your member retention rate is one of the simplest, clearest measures of member satisfaction. After all, satisfied members tend to stick around, while unsatisfied members tend to take their business elsewhere. Of course, people may leave their credit union for reasons that are unrelated to satisfaction (such as relocating and choosing a different regional financial institution), but –
Retained members can become advocates for your credit union
This is where member retention can actually fuel member acquisition.
If you delight your members, not only will they stick around, they’ll tell their friends and family members all about it! The next time someone asks them where they bank, they’ll recommend your credit union. If they get married, they might convince their partner to open a joint checking account. And when their children are old enough, they’ll help the kids open up their first savings account at your credit union.
Top ways to improve your CU’s member retention
At the core of member retention and engagement is member satisfaction. So here are some steps you can take to ensure your credit union gains a competitive advantage by increasing your retention rate:
- Go digital
The world has shifted online, have you? Ensure you have a digital interface on top of your branch locations—and make sure it’s up to date. Having a website just for the sake of having a website is no longer enough. In order to inspire trust, you need a website that looks the part!
- Keep up with technology
It’s not enough just to be online. Incorporate technology and automation where possible to make it easier for your members to resolve queries and take quick action.
- Personalize offerings
We’ve become used to a world where everything we see and interact with is uniquely tailored to our interest—and now, we expect it. So implement technology to better understand member actions and preferences, so you can provide offerings that match your members’ interests.
- Ask for feedback—and act on it!
The best way to meet member expectations is to simply ask. Reach out to your members for feedback, analyze responses, and be sure to take action.
The bottom line?
Member retention can create generational credit union members. And generational credit union members are the foundation for long-running credit unions that become fixtures of their communities.
In future installments of this series on member retention, we’ll examine the main causes of member churn, provide more tips on how to retain existing members, and even go “beyond retention” with advice on expanding your appeal to new members.
In the meantime, do you want to get serious about member retention as well as acquisition? Sogolytics is a holistic member experience management solution that can help you do both. Want to learn more? Get started today with a free demo.