October 5, 2012
What is the message that will help consumers to appreciate the credit union difference and become members? After they join, what convinces them to make credit unions their primary financial institutions (PFI) and then turns them into net promoters who will recruit friends and family to join?
Dr. Neil Goldman took a deep dive into consumer research in the closing general session at the Northwest Credit Union Association’s (NWCUA) Convention in Vancouver, Wash.
“Checking is the conduit, the key to the PFI,” Goldman said in his high-energy presentation. “Without checking, we’re invisible.”
However, Goldman called basic checking “maintenance” and said “enhancement” is the key to growing membership and loyalty. If credit unions decide to start charging for checking accounts—which may be a financial necessity soon—they will need to offer qualities that differentiate their accounts from bank checking accounts.
Goldman, the senior partner at Goldman Consulting and Strategy, was commissioned by the NWCUA to conduct the consumer research in the second quarter of 2012. Nearly 900 consumers in Oregon and Washington responded to the survey. A healthy mix of credit union members and bank customers were included.
While conducting the NWCUA’s survey, Goldman was doing concurrent focus groups for CO-OP Financial Services (CO-OP). For that project, Goldman captured Florida consumers’ thoughts on camera. A credit union awareness problem was evident.
“Aren’t most of them seedy?” one focus group member asked.
As unnerving as watching the video was for some convention attendees, the survey results were more scathing for banks. Northwest consumers assigned banks with a disturbing Net Promoter Score (NPS) of -17.
“I’ve been doing this research for years,” said Goldman, who has consulted credit unions in 49 states. “I have never seen a difference like this—64 points difference between banks and credit unions.” However, he likened net promoter scores to the temperature outdoors and said credit unions’ NPS of 49 is still too cool.
“If you want organic growth, it has to be warm—bordering on hot.”
Banks behaving badly has opened a lane on the “PFI Highway,” according to the research results. But Goldman believes the banks will figure out their mistakes, and at that point, credit unions will have to be ahead offering “value enhancement.”
Goldman recommended a nine-point action plan, which, if followed, will not only get credit unions up the “on-ramp” but into the fast lane.
The strategies include:
- Build awareness
- Address the hassle and transition fears
- Target the triggers pushing consumers away from banks
- Offer on-ramp solutions to the “PFI Highway”
- Address convenience
- Go mobile
- Market key benefits
- Focus and targeting
- Embrace enhancement
Goldman’s detailed findings are available to NWCUA members. Contact Lynn Heider, vice president of public relations and communications: firstname.lastname@example.org.