Marketing

‘Satisfaction is Worthless, Loyalty is Priceless’

Member loyalty won’t come until your CU far exceeds member satisfaction.

June 21, 2011
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Member satisfaction is worthless, but member loyalty is priceless, Neil Goldman, CEO of Goldman Consulting and Strategy, said Monday afternoon.

“You don’t achieve member loyalty until your credit union far exceeds member satisfaction,” says Goldman. “Satisfaction helps your credit union play defense, but loyalty helps your credit union play offense. Defensive strategies prevent your credit union from shrinking too much during times of adversity, but offensive strategies help your credit union grow during times of prosperity. You need high member-loyalty levels to grow.”

Goldman is a proponent of the Net Promoter Score (NPS) for measuring member loyalty. This research technique categorizes members into “detractors,” “passives,” and “promoters.”

If your credit union has 10% detractors, 10% passives, and 80% promoters, your NPS is 70 (throw out the passives and subtract the detractors from the promoters for your NPS).

“The NPS is kind of like the Fahrenheit temperature gauge,” says Goldman. “If you score 32 or below, your credit union is frozen and dead. If you score in the 50s or 60s, your credit union is tepid and growth will be a struggle. But if you score in the 70s and 80s, your credit union will grow and thrive.”

To ensure growth in the future, Goldman says credit unions must practice operational efficiency, product leadership or distinction, and member intimacy or loyalty.

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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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