I’ve been saying for some time now that traditional marketing is dead. Direct mail - dismal responses. Newsletters? Yet we are begging members to go to e-statements. Radio? One word-iPod. TV - 500 channels, 24 hours a day. Which 30 second spot to purchase?
When I put these notions on a slide in a presentation - inevitably marketers get nervous, and someone will courageously ask, “If we don’t do those things, what will we do?” Great question.
My answer: think differently. You need new tools. Net Promoter Score is a great start. Think of it as a cheap and ongoing focus group. Not getting the lift from your promotions? Maybe it’s because compliance is running the member experience. But as a marketer, how can you prove that? By asking the ultimate question, “How likely are you to recommend the credit union to a friend, family member or colleague?”
Redesigning your free checking brochure is not going to do it. Aren’t you sick of trying to make your checking sound “freer?”
“Something your competition is not likely to copy.”
In the world of R & D (rip-off and duplicate) it’s becoming harder and harder to differentiate ourselves from the competition. Credit unions are not as “sharing” as they once were for fear of R & D. But if you did something that your competition is NOT likely to copy - then you should shout it to the world.
Such is the case of Greater Nevada’s newest branch (as seen in CU Journal online):
Members of Greater Nevada CU may be brought back to a different era when they visit the credit union’s newest branch here-with a miniature grain silo as its entrance and the barn-shaped main lobby.
Tucson Old Pueblo Credit Union built a drive-up window for fire trucks! (their founding members)
Umpqua Bank brews their own blend of coffee - the Umpqua Blend.
What is YOUR credit union doing to differentiate themselves from the competition (which now includes other credit unions)?
Sub-prime
Underserved
Courtesy pay.
Pay Day Lending.
I’ve only been with credit unions since 1980. I worked for a teachers credit union, grocery store co-op, government employees and the high tech industry. They had a common bond and joined the credit union to pool their resources so they could get lower rates on loans and higher rates on deposits.
We called them when they were about to bounce a check (courtesy pay).
We encouraged them to apply for a share secured loan for emergencies (pay day lending).
We required a 20% down payment on a new car loan (sub-prime).
We created special savings programs, like the Teachers Depsoit Fund (underserved).
We had no competition.
So, what happened? How did the definitions change so dramatically?
As a follow-up to my blog post AVIS tried harder to lose my business and it HERTZ - this greeted me today at the Minneapolis Airport! The trunk was open, keys in the ignition, map on the seat……
I love getting Hertzed.
PS - Technical difficulties with WordPress. I cannot upload the photo — anyone, anyone???
According to Fred Reichheld, the Loyalty Economics guru, this is what a “bad profit” can do to your business:
Consider those resentful overage and usage fees from your cell phone supplier, or those plans that manipulate you into buying more minutes than you need. These practices generate bad profits. Whenever a customer feels deceived, coerced, or disrespected, then earnings from that customer are bad - they come at the customer’s expense. Bad profits convert customers into detractors who blacken a firm’s reputation and choke off a company’s best opportunity for true growth, the kind of growth that is both profitable and sustainable. The pursuit of bad profits alienates customers and demoralizes employees. Good profits come from satisfied customers who not only provide repeat business but bring new customers to the company.
And this just in…..
WASHINGTON – NCUA and banking regulators today will propose new rules barring certain unfair credit card practices and setting new requirements on overdraft protection programs, including allowing members to opt out of such programs, also known as bounce protection.
The proposal would prohibit a federal credit union from imposing an overdraft protection fee unless the member has specifically agreed to participate, or “opt-in” to the program.
Enough said….
I rented 43 cars from AVIS last year. That’s $6,557.59 of business. I was loyal. I have never forgotten to turn in my keys. Until last Thursday. I took off with the keys! I called Medford from Portland, Oregon (on my way to Seattle) and the agent told me to drop them off in Seattle. And here’s where the problem began.
Seattle assured me that this happens all the time, in fact, I was the third one that day! They simply overnight the keys to Medford. I called on Saturday to confirm. I needed a receipt for the rental to bill my client.
Have you ever tried to call AVIS on the week-end? You’d think that an airport rental car agency would pretty much be around-the-clock. Nope. Not if you need - are you ready for this - CUSTOMER SERVICE! They only work from 9 to 5 Monday thru Friday. They’re available 24/7 if you need to rent a car. If you have a problem, you gotta wait until Monday. So I did.
The Medford office also doesn’t pick up their phone on the week-ends but rather gives you a nice little message saying they are busy helping another customer.
This morning I called Medford - no answer. I called again, and again….and finally called the Customer Service line and explained that Medford won’t pick up their phone. They suggested I call Seattle. Seattle picked up the phone but said that THEY can’t close the contract - only Medford can. At the end of the call he admitted that he COULD do it, but he’d get in BIG trouble.
I now called the main toll free AVIS number just for fun. My own version of Russian Roulette. This guy came up with a whole new reason why he couldn’t close the contract. We have to wait for the keys. What? How will we KNOW when Medford gets the keys?? I need to call Medford.
Then I had this great idea - I’ll call the Medford Hertz. They are literally feet away from the employees at AVIS that don’t answer their phone. Here’s a gigantic moment of truth. All the marketing, planning, budgeting, positioning, pricing does not matter - will Hertz pick up their phone?
A nice young lady did just that. Wow. I was giddy. I explained that I really needed to talk to a person right next door, at their competitor, AVIS, and could she lean over the rail and simply ask them to please PICK UP THEIR PHONE!! She suggested I leave my number and that they should call me.
She delivered my message and AVIS Medford DID call me right back.
When I explained to her how frustrating it is that THEY DON’T ANSWER THE PHONE, she clued me in. You see, I was pressing option “4″ (customer service), they rarely answer that BUT, they almost always answer option “2″ the LOST AND FOUND option. Good to know for the future.
But then she dropped this new bombshell on me. IF Seattle doesn’t get the keys to Medford I could face “rekeying” charges. “How much is that?” I asked. “Well, let’s see” she pondered, “You rented a Chevy Malibu, we’ll have to go to the dealer and have them reprogram and re-key…..I have no idea.”
I thanked her for her help.
I just became a Hertz #1 Gold Club member. Took me about 3 minutes to sign up online and print my temporary Gold Card.
Hertz, if you are reading this - your Medford employee, Carol, made you tons of money today.
Thanks for answering the phone.
Can you imagine if every credit union measured ROA with a different ruler? Credit unions know that achieving a 100 bp ROA is good. You can have a lower one if you manage risk well. Net worth is another measure of safety and soundness that we all measure exactly the same way. If we didn’t we’d be in trouble.
But when it comes to measuring the REAL business we are in - serving the member - we do it sporadically (if at all) there is no credit union standard, we’ve never tied it to growth - we simply don’t have any reliable data. Consequently, financial measures rule the organization. They become our filter for all decision making.
The author of Loyalty Rules, The Loyalty Effect and his most recent, The Ultimate Question puts it best:
“A lot of companies survey customers once or twice a year and they average the numbers across all products and locations. First of all, satisfaction is not the right metric. Secondly, how can an average score once or twice a year be sufficient? Imagine that you only looked at profits averaged across all your product lines only once a year. How good would you be at managing profits? That’s how good you will be at managing loyalty.” - Fred Reichheld
When I first read about the Net Promoter Score (NPS), I was giddy. Here is a metric that is simple to use but packs a powerful punch in terms of data. Reliable data. NPS is a measure of the relationship between your member and your brand that is predictive of growth.
Diana Dkystra will be substantiating that statement at the FORUM Symposium later this year. She’s been measuring her brand with NPS for over three years. ROA no longer drives her decision making - it’s the member.
Many credit unions have used the NPS tool - however there is not a standard methodology (like ROA) that has been adopted. Until now.
Addison Avenue Credit Union, AmericaFirst Credit Union, Baxter Credit Union, BECU, Educators Credit Union (in Racine, Wisconsin), and San Francisco Fire Credit Union announced today the formation of the Member Loyalty Group, L.L.C. - a Credit Union Service Organization (CUSO) created to implement a standardized member-loyalty metric for credit unions nationwide.
The CUSO has partnered with Satmetrix, the company that developed the NPS (with Fred Reichheld), to first implement Satmetrix’s member-loyalty services. And in a few months will offer those services to all credit unions in the country, large and small.
The Member Loyalty Group’s six founding organizations have all been using the Net Promoter Score (NPS) metric to measure member loyalty for several years.
These credit unions were concerned, however, that the NPS was not being used in the same way by all of them. So they banded together to form a CUSO that would partner with Satmetrix, the company that developed the NPS, to first implement Satmetrix’s member-loyalty services within their organizations and then offer those services to all credit unions in the country, large and small.
Michelle Bloedorn, former VP Sales and Service for Baxter Credit Union has been named Executive Director of the CUSO. “Our number one priority is to develop THE standard metric for NPS. Many credit unions are using the NPS survey tool, but the methodology is not the same,” says Bloedorn. “Like ROA, we need to measure our member loyalty with the same ruler. The bottom-line has been the only measure of success and yet loyalty is what made credit unions grow. If your members cannot refer you, you will have a tough time growing in this increasingly competitive market.”
I am so excited for credit unions, and for our members to have this data.
Stay tuned……
I was in Sedona, Arizona this past week-end to speak for the CEOs and Board Chairs of some of the largest and most innovative cooperatives in the world.
No, not BECU or Navy Fed - Florida’s Natural, Blue Diamond Almonds, and the Dairy Farmers of America (just to name a few). I was asked to share my knowledge of Net Promoter Score (NPS) at the Graduate Institute of Cooperative Leadership.
I spent weeks researching agricultural cooperatives and constantly experienced deja vous. It was like reading the history of credit unions all over again.
One of the co-ops in the room was 98 years old. They struggle with the need to merge to create economies of scale. They are riddled with regulation. Oh, and they have to deal with the economy AND the weather. I have a deep respect for farming.
The one thing that stood out for me at this conference, was how many times they mentioned their member. The farmer. It was always a part of their language. Their cause. At the end of the day, how does this benefit the farmer?
Most credit union conferences today tend to focus on the products, the risk of our business, the need to improve margins. All important things - but it struck me - we are nothing without our member. Our members created us. And when we stop being loyal to that fact (to them) they will stop being loyal to us.
That’s why I’ve become so passionate about the Net Promoter Score (NPS). It’s the measure of member loyalty that predicts growth by asking a simple question, “How likely are you to recommend us to your friends, family and co-workers?”
Loyalty and word-of-mouth grew credit unions for the first 50 years. Our members marketed FOR us. Because we could not quantify the ROI on that - we ignored the essential ingredient in that process - the members have to be at the center of your decision-making. And not by “guessing” what they need or relying solely on “anecdotal” reference. NPS is a discipline, like accounting, that puts the voice of the member on the balance sheet, where it belongs.
I am rejuvenated after spending the week-end with these co-ops. I know we have some nay-sayers out there when it comes to NPS. So I invite you to attend the FORUM Symposium in October of this year where you will get to hear the incredible story of how Diana Dkystra used NPS to grow a super loyal base of members at San Francisco Fire.
……or why I bought TiVo to avoid moments like this. I was watching Extreme Makeover Home Edition last night in my kitchen (the TiVo is in the living room). Have you ever watched that? OMG, this poor family was literally living in a chicken coop turned shack and the mom and all three daughters suffered from this horrible disease but that didn’t stop them from helping others with the same affliction and I’m sobbing at the end of this show and vowing to support all the generous supporters products…..and then they cut to a commercial.
Jessica Alba walks into the room and says,
“Do you know what you want? I do. I want a foundation to match my skin.”
It’s a promo for Revlon’s new Custom Creations. So you no longer have to suffer with make-up lines!!! Aaarrrrgggghhhhhhhh!! Are you KIDDING me? How could Revlon hope to not piss off everyone paying attention. There ARE bigger problems in the world than models not being happy with their flawless looks.
Whew - that felt good.
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