I recently facilitated a two-day planning session for a credit union, and before the meeting began, the CEO shared his primary goal with me. “If we don’t accomplish anything else in 2020,” he said, “we need to grow membership.” With this goal in mind, he was eager to discuss strategies that would bring in new members. However, as we reviewed the credit union’s most recent data, we noticed how many members they were losing and realized we needed to back up.
Depending on variables like marketing tactics and market size, the average cost of acquiring a new credit union member ranges from $400 to $700. To achieve their desired growth metrics, this credit union would need to add 750 members a month. But considering more than 350 accounts were closing each month, the CEO and I agreed that the credit union needed to improve member retention before spending money to attract new members.
Although it’s almost impossible to control factors like charge-offs and member deaths, we identified plenty of areas that could stop the bleeding. Finding ways to keep current members made more sense than figuring out how to replace them month after month. After all, if the credit union was planning to spend money to bring in new members, we wanted to make sure they’d stick around instead of leaving a few months after joining. We needed to shut the back door before opening the front door.
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