In recent years, financial pressures coupled with an attractive business model has led to rapid growth in the credit union industry. In fact, in the first three quarters of 2020 alone, credit union membership grew 2.8%, reflecting 3.37 million new members.
While this growth is good news for credit unions in general, it doesn’t automatically equate to growth for individual organizations. On the contrary, credit unions must create effective member services and marketing strategies to ensure they’re earning the business of as many of these newcomers as possible.
Here are a few suggestions for ways that credit unions can build up their member base.
The first thing to do is make sure that your business model is putting the right amount of emphasis on your customers. This may seem obvious for decentralized credit unions, as their nonprofit status naturally draws the attention away from the profit-focused attitude of banks.
However, you want to ensure that as an organization your credit union is also reflecting this member-centric attitude. In an era where digital banking is king, this must be done deliberately.
Look for ways to maintain (or in some cases reintroduce) a sense of personal touch to the otherwise remote and disconnected activity of online banking. Provide responsive member services through online communication channels like live chat. Train your personnel to prioritize personalization and relationship development.
However you go about it, you always want to put an emphasis on the members themselves. If you can do that, you’ll stand out in an automated and disconnected financial industry.
Credit union members are part-owners of their financial institutions. This gives them an automatic sense of responsibility that doesn’t come with a traditional bank.
This inclusive business structure has led many credit unions to invest heavily in becoming a resource for their members and local community members. This is often presented in the form of teaching financial literacy.
Organizations should use this factor to make their unions more attractive to potential clientele. You can do this by creating high-quality, targeted resources that can help address the ongoing financial literacy crisis.
Create educational content. Develop user-friendly financial tools and products. By doing this, you show that you’re actively invested in improving the skills of your members — and by extension, enhancing your collective ownership.
Most companies tend toward a taller organizational hierarchy. As leadership creates more levels of management over one another, it leads to a complex and slow business process.
Credit unions have the ability to bypass this through their organic tendency toward a flat organizational hierarchy. The nonprofit aspect means there is little to no need to create additional levels of leadership beyond basic management requirements.
While this is a natural orientation of the credit union model, though, it doesn’t always mean the reality is as decentralized as might be desired. Credit unions must fight to maintain a flat structure over time.
Companies that can do so can cultivate empowered employees that can build relationships and provide quick answers for clients — both of which are factors that tend to attract and retain members.
Building a member base is more than just attracting more individuals toward your brand. If you want your credit union to build a solid foundation of members, you also need to invest in retaining the consumers who are already patronizing your company.
You can increase credit union member loyalty in several different ways, such as utilizing the latest fintech to make their experience seamless and user-friendly. Honing in on things like personalization and education is also a good idea.
“Showing that you value your existing members doesn’t just develop loyalty. It boosts their member lifetime value.”
Showing that you value your existing members doesn’t just develop loyalty. It boosts their member lifetime value. This is important to remember. You don’t want to work hard to get a new member in the door only to have them move on to a competitor a year or two later because they had an unsatisfactory experience.
As with all areas of the financial industry, leadership is a key element in successfully leading a credit union. You want the best decision-makers in place to help create and execute strategies geared toward building a stronger, larger, more loyal member base for your organization.
At Stanton Chase’s Los Angeles office, we’re used to pairing elite executives with the companies where they fit best. We understand the unique needs of a credit union and are ready to walk with you through the executive hiring process to ensure that you end up with the best leaders to guide your marketing and brand-building efforts for the foreseeable future.
About the Authors:
Peter Deragon is the Managing Director of Stanton Chase Los Angeles, and as Global Practice Leader of the Supply Chain, Logistics, and Transportation Practice Group, Peter is also active in the CFO Practice Group and financial services, where he started his career.
Bill Brewer is the Director of Stanton Chase Los Angeles and is the leader of Stanton Chase North America Human Resources Practice Group. He is also a member of the Stanton Chase Diversity and Inclusion Practice Group and Board Services Practice Group.