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.
If member growth is a key metric your credit union is struggling with, spend some time answering these questions:
- How many members are you losing each month? If members are leaving in high numbers, your membership is likely aging or you’re not serving them well.
- Why are you losing these members? Have you surveyed those who are closing their accounts to see why they are leaving? When it comes to problem-solving, perspective is everything. You may not like the answers you receive, but you need to understand the problem before you try to find a solution.
- Can you save these members before they leave? Is your frontline asking questions and trying to address problems proactively? Dissatisfied members often have misconceptions about products and services. In many cases, your team can clarify these misunderstandings before they grow into larger issues.
If your core allows you to access data easily, you can look for a few warning signs that may indicate members at risk. These signs include:
- Member is no longer logging into online banking
- Payroll direct deposit is no longer evident
- Credit card activity stops
- Billpay activity declines by 25% or more
These may seem like basic metrics, but if you scoured the data to see how many members fit the above actions, how many would you find? And more importantly, do you have a proactive plan in place to reach out to those people? If not, the sooner you develop that plan, the sooner you’ll be able to solidify your member base.
As you create your strategic marketing plan for 2020, make your first goal to retain more of your existing members. If you notice members are leaving, find out why. When you uncover the reasons, use your available data to identify members who fit the same profile. Then create a proactive plan for reaching out to those members and finding ways to keep them from leaving. Once your retention plan is in place, then you can move on to inviting new members. When you can keep the members you have and attract the new members you want, you’ll set the stage for sustainable growth.
“Your most unhappy customers are your greatest source of learning.”
From strat plans to rebrands, YMC President and CEO, Bo, is passionate about helping financial institutions come up with a winning formula. If you’re ready to go beyond the SWOT, you can email him at email@example.com.
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