Marketing

CUs Must Speak With One Voice to a New Generation

Large banks are in a much better position to deliver on technology.

October 19, 2012
KEYWORDS bank , banks , customer , service
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Earlier this year, I spoke at CUNA’s CEO Roundtable in San Francisco. It was interesting to hear the thoughts and opinions of some of the most influential CEOs from America’s credit unions.

To put things into context: I do not bank with a credit union, I’m a Gen X consumer, and I own and operate the personal-finance property MyBankTracker.com.

Based on this perspective, my research, and observations at the Roundtable, I’ve come to two conclusions:

1.  Credit unions aren’t capitalizing on a fundamental shift in the nature of customer service. Gen Y consumers are as likely to consider a credit union or a community bank as they are a large bank, according to an Aite Group and Bancvue study. For Gen Y, customer service no longer is king—it’s third to technology and convenience.

If you ask anyone what separates a credit union from a bank, they’ll likely say “customer service” and “trust.” But credit unions might be losing these advantages. Technology has changed what customer service means. It’s no longer enough to have friendly tellers at convenient locations.

In 2012, great technology is great customer service. And large banks actually are in a much better position to deliver on technology.

So how do credit unions win here? By evolving their definition of service to focus more on helping members manage their financial lives—whatever the tool or format.

Credit unions always have positioned themselves as trustworthy. But the prepaid debit market is changing what “trust” means.

Banks and credit card issuers are stepping into the prepaid space. For the first time, large banks are seen as leaders in bringing transparency to a sneaky-fee market. Banks and credit card giants are the good guys in the prepaid space. And by playing that role, they’re building trust with an entire generation.

2.  The credit union movement doesn’t do enough “team campaigning” across the industry. During the Roundtable, I heard more debates on whether a national branding campaign for credit unions was needed than on any other topic.

I concluded from those discussions that any such campaign is far from reality. While a national campaign might be a lost cause, regional branding is feasible. National events like Bank Transfer Day are one of a kind, and can’t be relied on to happen often, if ever again. (Banks are getting smarter and learning from their mistakes.)

Instead, credit unions should use their strongest attribute—an older, wiser generation of consumers who think highly of their credit unions. Credit unions will have more success if they act on the classic theory that it’s easier to grow relationships with existing members.

To do this, credit unions can work to increase their referral performance scores (RPS)—the percentage of primary financial institution (PFI) members who refer friends and family to the credit union multiplied by the percentage of referrers who grow their own relationships (by increasing account balances and/or adding new accounts).

While 47% of credit union PFI members refer friends and family, compared with 32% for large banks, large banks’ RPS is 381, compared with credit unions’ 353, according to the Aite/Bancvue study.

The credit union movement is in a vulnerable position—quite different from what most thought at the peak of the Occupy Wall Street movement. Credit unions have failed to adopt the technologies young consumers require, while banks are, at long last, answering those tech­nology demands.

More important, credit unions have failed to find a way to get their unified message to the majority of U.S. consumers.

ALEX MATJANEC is the co-founder/media and communications manager for MyBankTracker.com.

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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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