The Big “Great Rates and Service” Lie

By. James Robert Lay, PTP New Media & CU*SWAG

What makes your credit union different and stand out in your community?

Think about it for a moment…

By nature, you may have answered, “great rates and service” make our credit union different.

However, it is safe to say that if your answer was “rates and service,” you are at risk of your credit union becoming quickly irrelevant.

But don’t worry yet. After asking this same question to thousands of credit union leaders around the country, you are in good company as a majority of them have answered with the same response, “rates and service”. When I asked them to ponder this further, many quickly realized this was not a powerful positioning statement, which affirmed the commoditization of financial services.

More importantly, I argue that for many credit unions, “great rates and service” is irrelevant in today’s ever increasing reliance on digital channels.

Let’s take a moment to step into the heart and mind of the consumer (people) to explore how they view your credit union.  Is your service experience, made of up well-defined and continuously revised processes, making it easy for the consumer (people), to get the solution to their pain point (product)?

Is the promise of “great rates and service” a lie in a world of digital channels and touchpoints? Is this positioning even applicable online?* In short, digital must be viewed as more than another check-list item.

“We Offer the Best Rate in Town”

In the days of old, credit unions did have the best rates in town. However, that is no longer the case. Simply look at the rates of what other credit unions and banks are offering. You may often find the rates offered by others in your town are similar, if not better, than yours.

It is also important to no longer look at what other banks and credit unions are offering in your town alone. For many consumers, their “town” is much larger thanks to a simple Google search. They can go online to view and compare rates from financial institutions both locally and nationally.

Your credit union rate may no longer be the best rate in town. Consumers no longer have to look to financial institutions for loans thanks to the rise of peer-to-peer lending, which gives “people helping people” a whole new meaning.

Digital is continuing to disrupt the entire financial market and the way people interact with money. Don’t let failing to prepare for this continued shift be deadly for you credit union.

“We Offer the Best Service in Town”

In my humble opinion, if you have “service” written anywhere in your mission, vision, purpose or value statements, rewrite the statement without the word “service”. Why? Service is not a differentiation point anymore, but rather an expectation for consumers. In today’s human driven economy, your service can’t suck.

Furthermore, like rates, compare your mission, vision, purpose or value statement that mention service with other FIs in your community and you will quickly find this positioning is commoditized.

When we think of credit unions and service, we think of face-to-face human interactions in the branch or over the phone. But as more and more people interact with credit unions through digital channels, is the idea of “offering the best service in town” even relevant, yet alone true?

To begin, “digital service” can be defined as user experience, or more closely defined for credit unions, member experience. As noted before, an experience is nothing more than well thought out processes that are refined and improved over time. Take a look at your digital service through the hearts and minds of consumers with the three, key “service” areas below.

1. How easy is it for consumers to get in touch with a real person online*? Your credit union should be offering live chat. There are no excuses anymore, regardless of your size. If credit unions say they compete on service but have no online live chat, I am confused at how that is service. Take a look at a high performing, online, retail service experience and live chat plays an integral role in communication.

2. How easy is it for people to apply for an loan online*? Just because you have a loan application does not mean that it’s easy to apply for a loan. How long does it take to complete the loan application process from the time the loan application is started to the time that it is funded? Furthermore, can we help set the expectations and requirements for consumers once the loan application is complete, letting them know ahead of time what their next steps are and what documentation they need. Poor service, many times, is often a result of expectations not being met.

3. How easy is it for members to open an account (not “join the credit union”) online*? If credit unions talk about how great their service is, this is one area that truly is conflicted with comparing perception to reality. To begin, do you offer online account opening and funding? If so, you are ahead of the game. If not, take a look at the process required to open an account “online” and how many steps are required “offline”. Now compare that to others in your town, as well as others in the “town” of the entire online world.

If opening an account is the first service experience a consumer has when interacting with your credit union, let’s do everything possible to reduce the friction.  The first experience, opening an account, must be as seamless and easy as possible while setting and exceeding their expectations through digital channels and touchpoints. Otherwise, as consumers explore other options, they will view your “great service” offering as irony which could be deadly for your credit union.

I would love for you to share your thoughts in the comments below about other ways credit unions can break free from competing on “great rates and service” in an ever increasing digitally driven world.

* Online: It is important to remember that online is no longer just the desktop browser but now includes the mobile device, tablet and even TV.

James Robert Lay

James Robert Lay

JAMES ROBERT LAY is one of the world’s leading digital marketing authors, speakers, and advisors for financial brands. As the founder and CEO of the Digital Growth Institute, he ... Web: Details