The biggest threat to your customer experience initiatives?

Your credit union’s traditional thinking and behavior.

A recent presentation, and recent experiences, reminded me of the biggest obstacle facing Credit Union leaders who hope to improve their competitiveness by adding customer experience (CX) initiatives to their organizations’ efforts. That obstacle?  Traditional thinking and behavior; or, in other words, continuing to do the same thing but expecting a different outcome. More specifically, Credit Unions must stop acting incrementally and must overcome the inside-out perspective that undervalue members’ wants and needs, and underestimates the speed at which competitors are moving, and the competitive impact.

I recently participated in a presentation focused on the threat to Credit Unions brought on by three significant drivers – digital technologies that empower consumers, non-FI companies that have shown consumers what empowerment looks like, and a growing group of consumers demanding of Credit Unions the level of service they get from the world’s leading “connected commerce” companies, companies such as Amazon and Netflix.  The common thread through these three significant trends is “customer empowerment.”

It was argued that customer experience management (CXM) is the most important response Credit Union leaders can make to combat the threat posed by these disruptive forces.  But, I thought, Credit Unions will only be successful, truly successful, if they challenge their traditional ways of doing things.

Credit Union members now want what they get elsewhere.

The time has come for Credit Unions to move aggressively to make CXM “the critical next step” in their organizational evolution.  Why?  Because consumers have come to expect, through their interaction with leading connected companies such as Amazon and Netflix, that they be able to do business via mobile friendly options, absent channel and process friction; receive personal, customized service experiences; and engage in hassle free exchanges, using easy to understand services.

Pricing and product quality are no longer the path to competitive differentiation.  Nor is member service, as we traditionally think of it, the answer to how best to compete.  Face it, we work in a commodity business, and member experience, how members engage with your Credit Union at all points of presence, via all services, must now be the focus of your efforts.  Not “a focus” but “the focus.”

CX is the next critical step to success, but only if you clear a path for it.

The CX challenge, even when you accept and adopt the belief in CX, rests in realizing that your past successes in member service, or lending, or financial management may be impediments to successful adoption of CX.  Why?  Because traditional thinking about what a Credit Union does for its members, and how it should be organized to do it, creates barriers to change and dilutes the impact of your CX efforts. As well, Credit Unions are largely risk-averse organizations that employ people who tend toward incremental change and go out of their way not to make mistakes.  We focus on traditional metrics and financial statement viability.  But now we must do more, differently.  Now is not the time to act traditionally.  Now is the time to act disruptively.

Traditional Credit Union behavior dilutes the impact of CX efforts and puts you farther behind.

Netflix disrupted the video rental business and sent Blockbuster to the garbage heap of history by delivering videos through online order and “direct to home” delivery.  It was a game changer.  But, they didn’t stop there.  When streaming became viable, they disrupted their own business and delivery model and moved to an online order and delivery model.  They disrupted their business in order to succeed; and they haven’t stopped.  One could write at length about the details and the impact, but it’s enough to point out “they didn’t apply old thinking to new problems.” This is the lesson Credit Unions must learn.

Recent experiences with Credit Unions have shown me the need for Credit Union leaders to change their ways.  I watched as Credit Union people worked to initiate CX efforts toward listening to members and improving service.  But, in each and every case, people were focused on slow, careful, incremental tasks with long project timelines.  There was understanding amongst them that something had to change, and that new competitors and members’ demands must be addressed; but, the thinking they did and the actions they took were traditional, not transformational.  They weren’t looking to change.  They were looking to respond.  That’s not going to work.

To catch up and compete Credit Unions must tackle the big stuff.

To successfully close the experience gap between what your members get from others versus what they get from you, you must act aggressively.  There is no time to waste.  While your staff ponders, plans, acts with caution, uses internal resources only (guaranteeing an inside-out view), you fall further behind what your competitors are doing and what your members are seeking.  Your members don’t care about your plans.  They care about your actions.  And when they don’t get from you what they seek, they don’t wait for you, and they don’t accept the answer that “it’s coming.”  They go elsewhere.

To defeat the CX threat, Credit Union leaders must move now to effect transformational change across their organizations.  Better defined missions focused on improving member well-being need to be bolstered by strategies that drive you from commoditized service delivery to genuine value creation.  And your organizations must be built to overcome product, service and operational silos. Data must drive your discussions and your decision-making.  The member perspective must come first.  And your organizational culture must nurture and promote employee engagement that makes it happen.

The future for Credit Unions can be bright.  But first, Credit Union leaders must heed the strategic advice offered long ago by Peter Drucker to “slough off the past.”

Greg Crandell

Greg Crandell

Greg Crandell provides strategy, market planning, business development, and management consulting to financial technology firms and their clients – Credit Unions and Banks. For more years than he wishes to admit, ... Web: Details