These members ain’t loyal: 3 profiles of a member

Membership is supposed to have it’s privileges.  Yet, when it comes to financial services, that isn’t always the case.  Lately I’ve seen a number of credit union advertisements about low auto and home loan rates.  They look like the perfect teasers for expanding their loan portfolios.  Then you find out the rate only applies to new members.

Let’s face it. For the most part, financial services are a commodity.  I can get an account with the same features from any of the banks and credit unions in the area.  If I look hard enough, I can even find lower loan rates than what may be offered at my credit union.

So knowing this, why are most credit unions more concerned with bringing in new members instead of pleasing both new and current members?  Let’s take a look at three member profiles:

1.  Greg is a recent college graduate and a current member of your credit union.  He’s had a checking account since high school and is now looking to buy his first car.  Greg doesn’t qualify for the new low rate auto loan because he’s already a member.

2.  Lisa has been a credit union member for years.  Her family, with one college student, one high schooler, and professional husband have six checking accounts, three savings accounts, two credit cards, a home loan, and two car loans.  They want to get a new car for their college student daughter, but no one in their household can get the low rate because they are all members.

3. Harold isn’t a credit union member.  All of his accounts are at Bank of Disloyalists.  He walks in, opens a savings account and gets the low rate car loan for his new Audi A4.  He keeps $20 in the savings account the five years of the loan and never opens another account.

This example isn’t really that simplified.  In the past, I’ve been Harold.  Now unfortunately, the decision to only allow the best rates for new members could have the adverse effect of ticking off Greg and Lisa so much that they leave the credit union.

It’s this lack of member awareness that can breed disloyal members.  Instead of offering special incentives for only the new members, why not offer it to all members?  Better yet, why not run a small test to see which has better results?

I’m sure you’ve been frustrated when you were denied something special because you weren’t new.  Why put your current members through that?  They’re only as loyal to you as you are to them.

George Pasley

George Pasley

George Pasley is the founder of iMazuma, a web software company based in Charleston, SC. iMazuma specializes in back office automation software and recently launched FS Vendors, an online financial ... Web: www.imazuma.com Details