If everyone’s a superhero, no one’s a superhero
Should all members be treated equally?
Seth Godin, an acclaimed American author, blogger and business strategist, has repeatedly stood by the mantra “Treat different customers differently if you want them to remember you.” Many managers make the mistake of insisting that all members should be treated the same, or similarly stated, that all members should be treated the best. In the words of Syndrome (aka the villain in Disney’s The Incredibles): “when everyone is super, no one will be.” If you are striving to treat all members the best every time, not only is it unrealistic and exhausting your resources, the perception becomes your best is normal, and when certain situations demand even more than your normal, you simply can’t out-better your best.
So how should your credit union treat all members differently? The experts aren’t suggesting you treat only a few members well and the rest you ignore. What they are saying is that different members may warrant different treatment at different times. The key is defining the factors and attributes of a member that demand these different levels of member service. Is the decision based solely on pure revenue the member brings to your bottom line? Or is it the length of time with your credit union that determines their level of support? How does a member’s community status as a leader/blogger/media member play into the services they receive? Godin contends that the only way you can treat different members differently is if you understand that their values (and their value to you) vary.
Profitability. The Pareto principle commonly referred to as the 80/20 rule, contends that for many events, roughly 80% of the effects come from 20% of the causes. In practice at credit unions, it is used widely in marketing and member service strategy as a theory for understanding the impact of different members on your credit union overall. In essence, the idea is one-fifth of your members are responsible for four-fifths of profitability. While rarely are the numbers exact across all credit unions nationwide, it is likely that your top 20% of members are responsible for a much larger proportion of your revenue, either directly with their own accounts and services, or indirectly through their referrals as evangelists to your brand. Arm your MSRs with the member information they need to make informed decisions. Some core processors have a member profitability graph which staff can view to know how much money the credit union makes off of any given member. This can be key information to know how much you can bend for a member and the greater good i.e. refund a $20 late fee because you earn $500 in interest income from the member every year.
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