Lending

Want to Boost Loans? Increase Member Loyalty

CUs likely will have negative loan growth in 2010—the first time that’s happened in 30 years.

November 16, 2010
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Exploit member data

Member surveys can help credit unions grow their loan volume. Credit unions should:

  • Conduct surveys to measure members’ loyalty to your credit union, and your share of members’ loans.
  • Determine how member loyalty and loan market share at your credit union stack up against other credit unions’. Are you a leader or are you lagging?
  • Use these findings to identify opportunities and develop strategies for improving your loan service and building stronger member ties.

This is important because members who are “truly loyal” (the highest loyalty level) to their credit union carry outstanding loan balances at their credit union that are nearly 70% higher than less loyal members: $7,749 versus $4,613, according to CUNA’s Credit Union Member Satisfaction, Growth, and Loyalty benchmarking report.

“Truly loyal” members satisfy these requirements:

  • They “definitely would” recommend their credit union to others;
  • They “definitely would” contact their credit union the next time they need a financial product or service; and
  • They choose the credit union as their primary financial institution (PFI).

Member loyalty tends to increase as asset size increases, with the highest loyalty levels found among credit unions with assets of $500 million or more:

Loyalty2

Net Promoter scores

If you monitor member loyalty using the SatMetrix Net Promoter® Score, you can use “promoter group” information in your benchmarking efforts:

NPS2

Credit unions trying to increase their loan volume and build stronger member loyalty should use member surveys to create targeted marketing, operations, staff-performance, and service-delivery strategies.

Informed strategies, based on reliable member-research data, will help you reach your objectives.

JON HALLER is director of corporate and market research for the Credit Union National Association. Contact him at 800-356-9655, ext. 4346. To learn more about how CUNA Research can help you with member surveys, call us at 800-356-9655, ext. 4172, e-mail us, or visit us online.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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