I was at a Chapter meeting recently and overheard someone talking about their “misery” ratio. That’s a new one, so I asked him what he meant by “misery.”
He said it was based on the macro economic term coined by Arthur Okun to describe the misery index during a time of inflation. It was the sum of the inflation and the unemployment rates. The most “miserable” time was the early 80’s. When I started my career in credit unions coincidentally. The credit union version is the sum of charge-off ratio and delinquency. If you’re less than 1, you’re doing well. I guess.
I was teaching a smart bunch of credit union folks Marketing (Brand and Reputation) at SRCUS this past week-end, and asked them if they had heard of the Misery Ratio. No one had and I saw many people writing it down. Probably going to go back to their CEO and/or CFO and make sure they start calculating their misery score – yet one more peer comparison that keeps us staring at our naval rather than being aware of what might be truly miserable in the credit union, the member experience. I asked the class how many measured and managed member service with the same vigor as they measure loan quality. Not a single hand went up.
Then I asked how many do any kind of member surveys at all – about half the hands went up. Most of those, however did do Net Promoter Score, which I still believe, if done properly, is the best indicator of the member experience and your real reputation. But what about the rest of them?
I asked, them if they knew their Yelp! Score? Many had never looked (which is understandable since no one in my class was in marketing) and a couple of folks had never heard of Yelp!. Just for fun I said, “Let’s look up credit unions in Atlanta”. A very large one made the top three. With a total of 42 reviews and an average score of 1 1/2 stars. Yikes! I won’t say which credit union this is, even though that information is readily available on the World Wide Web (which of course is my point). A student in my class worked at this credit union and admitted many of the complaints were valid. They made some bad pricing decisions (it happens) and they’ve had turnover (who hasn’t) but why are we not giving this the same amount of attention?
That Yelp score is just one of your misery scores. Your members may be telling the entire world just how miserable it is to do business with you. There was no reply on line from anyone at this credit union. The student from the CU had no knowledge if anyone was “managing” it. Now I knew I was onto something.
The real problem with managing the member experience is that NO ONE on staff is a MEMBER! And by that I mean, when you work where your account is, you don’t have to use the channels members use to get that errand done.
To make my point, I asked the class if anyone has ever called their credit union. I mean, why would they? Which is the problem. So I asked for a volunteer, someone who felt pretty confident that there “recording” was delightful, even on the week-end. Of course no one wanted me to do this. In the true spirit of my Catholic education, when getting no takers, I called on the person that was clearly looking at the floor and trying to avoid eye contact.
First I Googled the credit union (like a member would) to see if I could find their website. It came right up. Good. Then I opened the website to see how easy it was to find a phone number, it was bold in the upper right hand corner, nice touch. Then of course, the ultimate moment of truth, I dialed the number. After a few rings, the usual message, “Thank you for calling X credit union, for loans press 1, member services press 2, and so on. I asked the class which number I should choose, in unison they said number 5 – which was the “hope for a human” because the recording said “For all other inquiries, press 5.” Five it is. It rang and rang and rang and finally we got someone’s voicemail. “You have reached the desk of X, I’m currently away, you may leave me a message or if you want to talk to someone immediately press…..wait for it……five.”
The best part about this impromptu activity, the recording was from the desk of the student in my room. She had absolutely no idea this was happening. And on a week-end. Their recording should obviously change to say they are closed and what the business hours are, etc.
Before we keep adding indexes and ratios and more peer data to our “widgets” we need to take a moment to reflect on what business we are really in. ANYONE can do a loan, and many Fintech companies are doing it better and faster and sexier than we are. This new Misery score scares me. Don’t we have enough “scores” keeping us from taking risks? We no longer talk to our members, here their stories, we merely “score their credit history” and make a pass/fail decision in most instances.
What gets measured, gets managed, if all we continue to measure is risk and financial performance and ignore the member experience – the ground truth of the organization – we will profitably go out of business.