Are Your Members Merely Satisfied or Truly Loyal?

Bank customers aren’t unhappy, but they’d switch institutions with the right incentive, according to a Harris Interactive survey released December 2010. Among surveyed consumers, 41% say their bank offers adequate service for their financial needs.

 But among those satisfied customers, about 20% say they’d switch banks with the right incentive. And 5% already are dissatisfied enough to be looking or willing to look for a new financial institution. 

This finding shows that satisfaction and loyalty are distinct concepts, notes CUNA’s 2011-2012 Survey of Potential Members. Satisfied customers, or members, don’t necessarily make loyal ones who continue to bring more business.

These survey findings have implications for credit union membership growth efforts. And knowing the data can be helpful as you cross-sell services to members and potential members.

The survey also indicates the customer loyalty payoff for banks is minor, based on certain comparisons between “truly loyal” customers, or promoters, and other customers. But it can be a big boost for credit unions.

For banks, comparing the two groups of their customers who are not credit union members shows that among truly loyal nonmembers:

• 93% have checking accounts at their banks, but 94% of other nonmember customers also have them.
• 37% have bank loans, while 45% of other nonmember customers have bank loans.
• The average loan balance is $13,540, outstripped by an average loan balance of $16,269 for other nonmembers.
• The average number of balance-carrying products and services with the bank is 2.5—barely more than other nonmembers’ average of 2.4 products and services.

These figures raise doubts about whether banks benefit much from their truly loyal promoters.

Credit unions, on the other hand, fare much better in reaping rewards from their truly loyal members compared with other members, according to the survey.

Among truly loyal members:

• 75% have credit union checking accounts, compared with 58% among other members.
• 42% have credit union loans, compared with 30% among other members.
• The average loan balance is $7,111, compared with $5,099 for other members.
• The average number of balance-carrying credit union products and services is 2.7, compared with 2.3 for other members.

Loyalty matters at credit unions. As you work with members to meet their financial needs, remember that their relationships with you can make a big difference in their loyalty, and your credit union’s bottom line.

This article first appeared in Front Line Newsletter.