Stop drinking the kool-aid and beat your competition
Nine and a half times out of ten when I ask an employee at a financial institution why they’re better than the competition, they tell me it’s because their service is better. “We give great service”, “We’re nicer”, “Our members love us” – they stop short of saying they’re better looking but the message is clear that they think they’re service level is superior and, therefore, their members will never take their business elsewhere.
Further, in a survey we conduct with clients, the following question is asked: Our credit union offers products and services that are superior to our competition. The scores are always very high. That’s good news, right? Well, then we ask: We get up-to-date information on how our products and services compare to the competition. Sadly, the scores are always extremely low.
That’s what I call “drinking the kool-aid”. Far too many credit unions think they’re better than the competition but make little or no effort to find out for sure. Worse, they’re making strategic decisions based on their assumptions rather than investing in the necessary research to clearly and definitively identify their competitive advantage. How can you say you’re better than the competition if you never compare yourself to the competition?
Many credit unions have achieved a high level of past success without having to worry too much about the competition. As long as they opened their doors on time each morning and offered a highly competitive price on loans and CDs, they made money. Members would rarely attrite and the business kept rolling in. The only time competition became a concern is when someone else offered a rate special.
Today, members (and especially, potential members!) are tempted every day by competition and it’s no longer just the rate leaders we need to worry about. Members are tempted by those that offer enticing new and better products; those that provide the ultimate in convenience; and, yes, those that are new, fresh, and hip (does anyone beside me still use that word?). The “face” of banking isn’t changing … it has already changed! Has your credit union changed its face?
There are three vital steps to re-facing your organization:
- Change the culture of your staff
It’s no longer acceptable to just react to member’s needs. You need to be proactive and anticipate member needs (current and future). That means having people and processes that allow you to change the dynamic of every member interaction to maximize the experience. The profile of your employees needs to change so that empathy, friendliness, approachability, and forward-thinking become the attributes with the greatest priority. This change starts at the very top and permeates throughout the entire credit union.
- Look through your member’s eyes
When you assess that “experience”, look at it from the member’s perspective, not yours. Stop doing things the same way you’ve always done them! Challenge every single process to see if you can do it more efficiently so as to provide a desirable experience for your members. Remember, they don’t care what your limitations are – they want you to conduct their business in the most positive manner possible. And don’t assume you know how they feel about you – ask them as frequently as you can.
- Compare yourself to the competition
First, identify exactly who your competition is and, then, specifically how you stack-up against each one. Compare products, convenience, price, experience, and people. Be brutally honest when you look in the mirror. If your baby is ugly, admit it’s ugly and deploy strategies to beautify it. Get your people involved in the process; this isn’t just a Marketing initiative, everyone has skin in the game. Expect branch managers and their staff to shop the competition in their markets, share the information, and develop local strategies to improve. Finally, make this an on-going process.
Recently, we asked four senior leaders at a small credit union: Considering all the competition out there, why would someone choose to become a member at your credit union? As you might imagine, each of the four presented four distinctly different and unverified answers. They presented their opinions, not facts. They had each taken a big gulp of the kool-aid!
When you identify your short-comings, be quick and nimble in responding to them. The time for urgency is now! Every day you wait is a day your competition is gaining ground or extending their lead. Remember: the competition is coming hard after the same members you need to keep. They don’t want the ones that are costing you money; they want the ones that are making you the most money. They will also prevent you from attracting those critical younger members that every credit union needs for future viability and survival.
The message is plain: stop drinking the kool-aid and make the necessary changes to beat the competition today! My firm would be happy to share with you best practices in assessing your current competitive position and ways to make sure your baby stops being ugly. Please contact us at www.fi-strategies.com/about/contact-us.
