As you may have seen, Consumer Reports recently published a compelling report on satisfaction levels within financial services, stating 93% of credit union members rated themselves as “highly satisfied” with their CU. Contrasted against a rating of only 69% for the big four banks, this data point is truly an amazing achievement. Furthermore, the report indicated that credit unions achieved some of the highest satisfaction ratings ever recorded.
The report deserves a quick read, but to summarize, Credit Unions receive top marks for personalized service, product mix of low to no fee accounts, higher interest rate savings products, and lower interest rates on loans and credit cards. Also of interest, the report stated an average CU member pays about $71 in fees annually, versus $183 at a big bank.
All this positive news, yet credit unions still struggle to acquire new members, and separate themselves from the big banks. So the question remains: How do credit unions rise above the noise?
This topic is near and dear to our hearts, and a significant challenge for Credit Unions. How does a marketer at a CU deliver the message and ensure it rises above the noise of the big banks, which seemingly possess unlimited funds to spend on marketing?
As a consumer in North America, we are pummeled with thousands of branded messages per day. This saturation has led to an erosion of a consumer’s focus, and more importantly, his and her ability to make an informed purchasing decision. When similar products and services all appear to be advertising the same thing, with little attention devoted to a product’s true differentiation, how does a consumer make a choice?
We believe one under-utilized tactic available to marketers is the empowerment of their customer to tell your story and share their experiences with their friends and family.
We strongly believe that referrals are a significant untapped opportunity for credit union marketers, precisely because of the amazingly high satisfaction rates of members. By virtue of what is called the “birds of a feather” principle, existing members at a credit union are more likely to have similar values, attitudes, interests and behaviours to their friends and family, and therefore more likely to have similar needs when it comes to their services. Thus, working with your members to spread the good word about their satisfaction with your credit union aligns well with the brand ethos that is a core element of most credit unions today.
While many credit unions may have implemented some form of a referral program in the past, the technology, automation and reach of modern programs have dramatically improved in the last year or two. A credit union can implement a program up and running at a low cost, and have the system manage all aspects of the program, from sending and tracking referrals to distributing rewards.
The key – and often missing – piece of a great referral program is consistency. The program must be repeatedly and persistently marketed. This methodology ensures that your members are continually advised of the program’s existence, and where to find it should they want to make a referral.
Often our clients initially believe that a referral program should be run as a short term campaign for a month or two. While promoting a program regularly is important, our results have shown that running a referral program for only 60 days dramatically limits the opportunities that members have to share your credit union with their friends and family. Data from our clients proves that the longer the tenure of a referral program, the better the program performs overall.
Why is this?
In the case of credit unions, one must understand that consumers seek banking alternatives at different times in their personal financial journey. Often something triggers the need to search for a new or alternative financial provider: a new job, a move, a significant purchase, etc. During these times, seeking a lower cost alternative, better rates, or a better experience can all lead a potential new customer.And often, the search begins with that potential customer talking to friends or family.
Because of this initial desire to consult close contacts, placing your credit union’s referral program continually in the mind of your members is critical. Ensuring the program is easily accessible from your online portal, in regular marketing material, and in a mobile optimized page from your website makes it easy for a member to quickly pull out their phone and submit a referral when that conversation arises.
Take advantage of these great satisfaction results. Let your members know. Toot your own horn. Or better yet, let your customers toot it for you!