Technology has changed how your members engage (and disengage) with your credit union

Consumers’ primary concern is whether they are getting the products and services they pay for. The financial services industry has a particularly big challenge, consumer’s perceptions of this sector took a big hit after the 2008 financial crash. Consumer disinterest turned to dislike, and the distance created by ATMs and online or mobile banking suits many consumers.

Of the new entrants to the market, many have only ever really known their financial institutions digitally—that is, remotely. They are adults now and are rapidly building up families and money of their own. What this generation expects from a financial services provider is different. And, if you are seeing your members less and less, how will you ever know?

For them, the convenience of having someone to talk to about opening an account is not convenient at all. They would rather do it on their own, online or on their phones. When they do talk to you, it is that way too – as, and when, they want, privately or publicly, online or via a mobile app.

Additionally, these new consumers are driving change wherever they go. They are teaching their parents and changing how “banking” is done. No longer an errand, banking is now a phone function. Online penetration is close to 90% and smart phone penetration is getting there too, so it isn’t a “generational thing” at all. Fewer than half of all consumers now visit a branch at least once a month.

And if they decide to “walk away” without giving you their new business, chances are you won’t even know they were considering your services.

Many satisfaction and loyalty measurement programs were originally designed with the laudable goal of managing the interaction your branch staff have with your members. You may have already guessed the point, with less in-branch and more varieties of interactions, the satisfaction and loyalty measurement game has already changed!

Satisfaction on the rise, or is it?

While the Milken Institute reports that 85% of all transactions are now digital, satisfaction rates are climbing. Here are two important reasons:

• Some people enjoy their financial services relationships and love dropping into the local branch. These people are pushing up the in-branch ratings. Everyone else is conducting their financial business online.
• But it’s not just satisfaction with in-branch visits that are climbing. Those consumers using online channels are happier too. Consumers are enjoying the fact that technology reduces the need for in-branch visits and in-person interactions, plus it saves valuable time.

A smile can win the day, so can showing you are trying hard. But are your higher scores showing you are actually winning them over online? The members you serve no longer have to see you or talk to you. They don’t have to ask you their questions because they have plenty of other options for advice, information, and the services you offer. They go quickly, quietly, and sometimes quite spontaneously.

Disruption is a boon to some, a nuisance to others, and the death-knell to the purists and traditionalists. Your members have embraced the online and mobile revolution and it affects what they expect from you. When things are changing, trying harder and doing more of the tried-and-true is no recipe for success.

Marble halls and mahogany counters—or slick, sleek modern spaces—are symbols of strength and vigor of a bygone era. The challenge today is how to evoke and communicate new images of performance, permanence, and security.

You do have to deliver functionality, but it might not be enough on its own. Digital banking could put 35% of traditional banks’ market share up for grabs by 2020 in North America, according to Accenture Research. Apple Pay apparently already supports cards representing almost 90% of the U.S. credit card purchasing volume. The question may soon be: “What [’s in your] wallet?”

This revolution drives the need for new tools to track and measure member engagement, tools that are designed around the new order of retail financial services. What matters today is the context of the engagement you have with your members and the population at large.

“Satisfaction” measures a critical symptom, but just as critical are the expectations, needs, and perceptions. A stagnant marketplace may raise your “loyalty” scores. Your growth may lower them. Loyal members are forgiving and their strong loyalty may lead you to ignore flaws that prevent you from growing and flourishing. Exciting new products increase consumers’ willingness to recommend, but don’t guarantee their stickiness. What drives people to connect so powerfully they feel, cherish, and gladly celebrate the reciprocity that comes from working with you?

This is the context that new member engagement tools need operate in. An example is the SEA Score™ from Informa Research Services. It provides key performance indicators and a strategic assessment in the form of a ratio reflecting your relative abilities to service and energize your members and to attract new business.

The value equation is at the heart of members’ assessments of what they pay you for. Are you meeting their needs? Do they think you are? Consumers’ readiness to return, reuse, commit to you, and to support and promote you takes a certain level of “energy.” If they see the value, consumers will go out of their way. When they make an emotional investment, it creates a commitment, and they are less likely to back away, are happy to be seen promoting, will defend more eagerly, and will more readily support.

When consumers are seizing opportunities to not engage with you, financial service providers who do not measure consumer engagement have no way of knowing their members are losing this connection with them. Nor do they know if their “invisible salesforce” is losing its energy.

Relationships are built on the attitudes and intentions people have based on a combination of expectation and experience. Nothing stays the same. Certainly not member expectations. Are your members ready to dump you for the next best thing?