Designing Your Organization to Create Exceptional Member Experiences

A research event recap from Filene's Centers for Performance and Operational Excellence + Organizational Entrepreneurship

Delivering a great member experience requires a willingness to innovate and learn from mistakes. What happens when credit unions apply design thinking techniques to solve challenges? Whether designing from the inside out (making operational changes, reexamining the employee experience) or the outside in (focusing on a target member segment, taking the member perspective), how can credit unions thrive in an increasingly competitive landscape?

What kind of experience does your organization strive to create for members? 

How about employees? Do those experiences align? In many cases, says Filene Fellow Huggy Rao, they differ wildly. As an example, Rao points to a chain of gas stations that wanted to make customer interactions convenient, fast, and trustworthy. At the same time, employees reported that solving customer problems was difficult, time-consuming, and required a series of approvals that underscored a lack of trust. How then, asks Rao, can companies design their internal (employee) experience to align with their external (customer) experience?

"Sometimes we can actually give very confusing signals. We may think we are customer-facing, but quite honestly what we do is we actually show the customer our backside."

Huggy Rao
Stanford University

Rao calls this the employee value proposition, or “talent brand,” shaped by a series of simple questions: What should employees care about? What should they share with others? And how much can they dare – how much leeway are they given to solve customer problems? To assist in developing the talent brand, Rao offers a framework he calls FARTHER, which breaks down specific elements where organizations can set targets and assess results. Rao recommends benchmarking these results against peers and high performers. For example, he says, Zappos aims to amaze customers and starts by impressing and satisfying new hires. Employees enjoy raises and promotions tied to skill tests, are able to bid for preferred shifts, and work in small teams who actively recognize each other’s accomplishments.

How can credit unions design a great employee experience?

At the University of Michigan Federal Credit Union, UMFCU’s Tiffany Ford explains, leaders “wow” employees with experiences like meals at five-star restaurants. When the organization’s headquarters was under construction, she notes, management made the transitional area so much fun that displaced teams begged to stay permanently. She notes that UMFCU focuses resources on improving the facilities and

Jason Osterhage, Alliant Federal Credit Union, and Tiffany Ford, University of Michigan Federal Credit Union

atmosphere where team members work. Alliant Federal Credit Union’s Jason Osterhage shares that Alliant aims to be: “A great workplace for humans.” He notes that the organization has carefully designed the recruiting and onboarding experiences. “Putting members at the center” sounds good, Osterhage says, but in practice, it requires the right incentives, a framework and language for member interactions, and simplicity around what is sacred and forbidden with respect to the member.

Aligning employee and member experiences can also offer a performance boost. At one point, notes Filene Fellow Dennis Campbell, Commerce Bank was the fastest growing and most profitable bank in the United States. The company achieved this by competing on customer experience, with convenient branch hours and friendly service – paid for by offering the worst rates in every market where they operated. To make the shift to high quality service, Campbell explains, the incoming CEO deliberately hired people with service experience from outside the banking industry and drastically pared down the company’s product offerings so they could succeed. Ultimately, Campbell says, Commerce Bank prospered because the company supported its employees, who then delivered an excellent customer experience. He notes that when companies are clear about where they will compete, it is possible to create clearer human resources policies and more effectively motivate employees.

The call center: designing an employee experience to reduce turnover

Rini Fredette, PSCU, and Lorna Quinn, SchoolsFirst Federal Credit Union

“There’s no one decision you can make that will take this credit union down.” 

Lorna Quinn
SchoolsFirst Federal Credit Union

The last line of credit union defense is the call center, tasked with informing, assisting, calming, and ultimately satisfying members. But since pay is frequently at the bottom of the scale, call centers experience high turnover. How can focusing on the employee experience help credit unions create value – and happier employees?

PSCU’s Rini Fredette says that a positive coaching culture and employee-focused technologies enable their call center agents to tackle 10.5 million calls per year. Because managers spend most of their time coaching, employees are growing and learning – and with three tiers of seniority, they can be promoted and earn raises quickly. An employee password vault, a mobile app for managing schedules, and a forthcoming universal desktop simplify potentially frustrating pieces of the employee experience.

Rini Fredette, Lorna Quinn and Elry Armaza (Filene Research Institute) discuss how meeting member expectations produces greater satisfaction and loyalty – but exceeding them can result in overspending, so credit unions must strike a careful balance.

During a reorganization, SchoolsFirst Federal Credit Union moved all call center escalations to a new team. That team was thrilled, says SchoolsFirst’s Lorna Quinn, because they were given more tools to fix member problems. She says more frequent promotions and the creation of a senior-level agent position helped to lower attrition rates. SchoolsFirst no longer conducts call audits but uses live coaching to help agents improve. To encourage her team to be creative in solving member challenges, Quinn says she reminds them that: “There’s no one decision you can make that will take this credit union down.”

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Delivering an exceptional experience to members might require operational changes. Here, expert practitioners describe several ideas for how that might take shape.

Measuring to improve the member experience

"Everything went as easy as you could possibly hope for. It's easy to build anxiety and BECU squashed it every step of the way." 

Lorraine Stewart, BECU, shares feedback from one BECU member after a mortgage process overhaul

When Lorraine Stewart joined the team at BECU, the mortgage business was, as she puts it, “on fire.” Application volume was high, members complained about long waits with no updates, and staff morale had plummeted. It was clear that BECU needed to make radical changes, but the organization was so slammed by high volume that there was no time to course-correct.

This was actually the perfect moment for BECU to step back and examine their member experience, says Member Loyalty Group’s Michelle Bloedorn. To address problems, an organization needs many types of listening posts, she notes, including surveys, frontline employees, web intercepts, social media, and operational data. Rather than relying on one key metric, she explains, each should be viewed as a window into a different piece of the member experience. Popular measures include customer satisfaction surveys (CSAT), Net Promoter Score (NPS), and ease of use (CES), as well as driver measures. Bloedorn says that organizations can use root cause 

analysis to weave these metrics together into a complete narrative. Ultimately, she notes, the scores don’t matter as much as the action that an organization takes in order to improve.

Michelle Bloedorn, Member Loyalty Group

At BECU, Stewart says, the first step was an extended listening period to pinpoint specific challenges and areas of friction. Then the organization undertook major changes, including the reorganization of the mortgage group with clear roles and responsibilities. Stewart also initiated a full update of mortgage policies and procedures, redesigned trainings for mortgage group employees, and standardized BECU’s handling of electronic documents, which had frustrated underwriters. Member communication improved when BECU started providing loan processors – who had previously been hesitant to contact members – with scripts for difficult conversations. The mortgage group focused heavily on individual NPS as an incentive goal, and leaders reviewed results daily. The result? From 2013 to 2019, Stewart reports, BECU’s mortgage overall NPS rose 81%, and their purchase NPS grew by an astonishing 181%.

Operational transparency – people value what they can see

As consumers increasingly interact with financial service providers through digital platforms, banks are closing the gap on credit unions when it comes to customer satisfaction. One way to cross the digital divide, says Filene Fellow Dennis Campbell, is through operational transparency – showing members the work that takes place behind the scenes of complex processes. Campbell explains that when members are unable to see the effort that employees are making to bring them great service, it diminishes how they perceive the value of that service. But when that work becomes visible, customer loyalty, satisfaction, and value perceptions increase. “It turns out to be the case in almost any industry,” Campbell says, “…that when we can create that transparency, people's perceptions of value actually go up, even when nothing about the service operation has changed.” For example, when Domino’s introduced a pizza tracker that allowed customers to follow their order as it was prepared, cooked, packaged, and delivered, customer satisfaction rose dramatically.

Dennis Campbell, Harvard Business School

“If we can actually show people the work, perceptions of value go up.”

Dennis Campbell
Harvard Business SChool

For credit unions, operational transparency might look like text message updates on the status of a loan application, a feature which Harvard Business School PhD candidate Michelle Shell has been testing. She found that approved applicants were more likely to actually close on a loan when text messages contained an employee’s phone number – a touch of human contact that decreased applicants’ anxiety. But she warns that applicants who received messages without the phone number were actually slightly less likely to close on their loan than the control group, suggesting that operational transparency can increase member anxiety when it reminds them that their credit score is being pulled.

Campbell notes that, while operational transparency has consistently been shown to increase customer loyalty and satisfaction, forthcoming research from Filene did not show a link to performance improvement for credit unions – likely because very few organizations have adopted it as a strategy. This would suggest an opportunity for more credit unions to conduct pilots, he says.

Investing in UX design pays dividends

“Focusing can be risky. But it also can be rewarding when you're delivering a solution that is focused on the needs of a particular persona.”

Cindy McGinness

Everyone has encountered poor user experience (UX) design, says PSCU’s Cindy McGinness – situations where a process or an online form leaves a user thinking: “Wow, that was dumb.” Sometimes users are the experts, she adds. To prevent frustrating experiences, PSCU conducts research into member needs and challenges and analyzes the results using human-centered design techniques. Testing for user experience during the design process eliminates rework and ultimately saves money, McGinness points out – noting that 50% of a developer’s salary is spent on fixing errors that good UX design could have prevented. She recommends that credit unions make research and analysis an ongoing process, and stay curious about what a process looks like from the member perspective.

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Deliver where it counts and deliberately underperform where it doesn’t

In contrast to every other domestic airline in the United States, Southwest Airlines has been profitable for an astounding 46 years. The company succeeds, says Filene Fellow Dennis Campbell, by making tradeoffs – eschewing amenities, perks, and convenient routes for low prices and friendly service. Because Southwest knows what their target customer cares about, they can deliver where it counts and deliberately underperform where it doesn’t.

"It's very hard to serve multiple customer segments with one operating model; very hard to be all things to all people with one operating model."
Dennis Campbell, Harvard Business School

It’s not just Southwest, Campbell says – focused companies across industries tend to outperform their peers. And in order to know where to focus, a company must know who their target customer is. Research has shown, he explains, that 96% of differences in CSAT are solely attributable to variability among customers. Compatibility is a strong predictor of customer satisfaction and loyalty, while dissatisfied customers impose more costs on the company and generate less revenue.

Member compatibility, then, is something that credit unions should proactively manage. Forthcoming research from Filene shows that credit unions with greater member compatibility have higher member satisfaction, as well as higher asset growth and loans to assets ratio. Campbell notes that it may be difficult for credit unions to define their target member, since many organizations have broadened their fields of membership. But to increase member satisfaction, it is essential to understand who the credit union is best positioned to serve. Focusing on a narrow member base doesn't mean that a credit union doesn’t serve anyone else, Campbell notes. But when trade-offs need to be made, an organization should choose where to allocate resources based on what their primary member cares about.

“What our research shows is that… the more you can attract compatible customers, the more you can repel incompatible customers, the better performance is on a number of dimensions." 

Dennis Campbell
Harvard Business School

How can credit unions manage member compatibility? Campbell suggests four potential approaches:

  • Centralized reduction – strategically restrict the field of membership, either through specific product offerings, narrow membership requirements, or a limited location.
  • Decentralized reduction – empower members to self-select into or out of the credit union by clearly communicating the tradeoffs the organization has chosen to make.
  • Centralized accommodation – align the operating model to accommodate the needs and behaviors of several specific target members; develop multiple focused service models tied by a layer of shared services.
  • Decentralized accommodation – empower employees to deviate from the standard model of service in order to better serve member with diverse needs and behaviors. (This approach puts a lot of strain on the corporate culture.)

Credit unions with multiple primary members can design multiple offerings or service on-ramps, Campbell suggests. And, he adds, if there are atypical operating segments – members whose behavior or CSAT levels are significantly different from other segments – they might need an off-ramp. Alternatively, there could be an opportunity for the organization to serve them differently.

What does member compatibility look like in practice?

Credit unions vary when it comes to addressing member compatibility. Some maintain a narrow field of membership, while others must decide where to focus within a broader membership base:

The goal of American Airlines Federal Credit Union is: “We take care of the American Airlines family,” says AAFCU’s Sean Gaven. One of the organization’s strengths is being able to explain members’ unique financial needs to underwriters, he says – for example, airline pilots have a mandatory retirement age of 65. Because members are constantly in transit, the organization must effectively balance a workplace convenient branch network and digital environment, Gaven notes, focusing resources toward superior mobile and web access to complement the physical branch network.

Gene Foley, Harvard University Employees Credit Union, Chris Schell, Summit Credit Union, Lakshmi Subramanian, UNFCU, Ken Dryfhout, BCU, and Sean Gaven, American Airlines Federal Credit Union

Panelists answer questions from attendees on member compatibility, marketing and managing fields of membership.

The Harvard Employees Credit Union has chosen not to open their field of membership, says HECU’s Gene Foley, instead deciding to dig deeper within the life of the university and hospitals they serve. In the wake of the financial crisis, the organization pared down their product set and focused on filling gaps in the competitive Boston financial services market. These include offering student loans and supporting Harvard employees in obtaining housing through on-the-spot mortgages and rent loans.

With members in diverse regions, the United Nations Federal Credit Union is dedicated to providing creative, need-driven solutions, says UNFCU’s Lakshmi Subramanian, so they use data to approach new products and services with critical mass in mind. Serving UN employees and their families, the organization tailors its product offerings to the unique needs of global members, such as international home loans and remittances. Subramanian says their driving question is: “What are we best at, and how can we continue doing it better?”

Panelists answer questions from attendees on member compatibility, marketing and managing fields of membership.

Chris Schell, Summit Credit Union, shares how Summit Credit Union found success focusing on a target member persona.

Madison-based Summit Credit Union actually originated as the “credit union for people without the opportunity to join a credit union,” says Summit’s Chris Schell, and they have found success by focusing on a target persona within a broad field of membership – primarily Madison and Milwaukee area residents. Summit targets female heads of household, whom Schell describes as “the on-ramp to the entire family,” and has built their value proposition around financial education.

As a credit union that exclusively partners with employers, BCU considers their core member to be “corporate America,” explains BCU’s Ken Dryfhout. BCU made their first foray outside the healthcare industry when they took on Target Credit Union in 2011, and they have continued to diversify. Dryfhout says that the process of choosing corporate partners is a little like dating – it takes time and dedication and requires a strong culture fit. He adds that diversity among partners strengthens BCU and helps the organization weather economic swings.

Next steps for credit unions

Campbell offers an exercise for credit unions that want to increase member compatibility:

  • Identify your target member or members. What are the attributes that define good service for them? Be as specific as possible, as features like “convenience,” “price,” and “service quality” are multi-faceted.
  • Leaders should put themselves in the member's place and rank the attributes from most to least important.
  • Once everyone has agreed on a ranking, Campbell says, the next step is to provide an honest assessment of the organization’s performance in regard to those attributes.
  • After assessing performance vs. member priorities, consider whether there are there opportunities to better show members how the organization is delivering in the areas they care about. What about opportunities to shift resources away from low priorities and toward higher priority attributes?

Prioritizing the attributes of good service will be hard, Campbell notes, but the process of surfacing disagreement and getting consensus is valuable. The exercise can be validated with member surveys, but don’t ask members to simply rank their priorities – it’s more effective to ask them to choose between a series of two things. Finally, think about your competitors: where are the segments where your organization can actually compete?

One of the most valuable sources of information about the member experience is, of course, members themselves, in focus groups or other forums where they can speak candidly about their experiences. At this event, three members of local credit unions generously agreed to take part in a lively panel discussion.

Credit union members sound off

"I don't go into the branch very often; most of my interaction is with my app. But I want to feel like I'm dealing with somebody who cares about me. That's one of my problems with the banks… you walk in… I feel like they're just waiting for you to finish what you're doing and get out the door. But every time I have to deal with DCU… I feel like I'm the only one they're dealing with.”
Credit Union member

The three panelists report being happy with the checking, savings, and loans they receive through their credit unions, but they also maintain a relationship with other financial service providers. Panelists agree that they would check with their credit union when shopping for a new product or service but would also shop around for rates. Price is a key factor, but they would be willing to pay slightly more to stay within the credit union. “If it's anywhere close, I'm sticking with my [credit union],” says one panelist. “I want it on one screen; I want to log in, I want everything right there. It's just easier."

"I mean, it sounds good to be co-owner… but I actually don't feel like I own anything when it comes to the credit union." 
Credit Union member 
from the Member Panel

Members want to feel like the credit union cares about them. A panelist says that he appreciates the focused attention when he interacts with his credit union: “I feel like I'm the only one they're dealing with.” But all three panelists emphasize that they don’t feel like co-owners, due to a lack of tangible benefits. “I don’t feel like I own anything,” explains another panelist. Contrasting his credit union membership to his REI membership, the panelist J notes that, “if my membership benefit, being a part owner, meant I saved a quarter of a percent? That would be awesome! But I'm not.” When it comes to the good work that credit unions do in their communities, panelists said they wished they knew more about it – and would be happy to get involved with fundraising or charity efforts.

The panelists explain that they use different channels for specific purposes – the branch is only for major transactions, while the website is useful for “financial days” during which they pay bills and balance budgets. They use the mobile app for everything else and insist that the app must be simple, functional, and able to show all of a user’s accounts in one place. While panelists generally feel comfortable seeking help through chat, they would never ask for help with their accounts over social media. If they have to call the credit union, they would much rather receive a scheduled call back than wait on hold.

Above all, panelists note, credit unions should avoid creating situations that are embarrassing (declining charges while a member is traveling), frustrating (understaffing branches at lunchtime), or inconvenient (requiring PIN changes to take place in a branch).

Understanding the experience of financial vulnerability

U.S. households are vulnerable to financial shocks, says Commonwealth’s Brian Gilmore, noting that 41% of Americans would be unable to come up with $400 in an emergency. Saving money can be lonely and stressful, Gilmore notes – especially considering the lack of products that meet consumers’ needs. A fun way to rebrand the experience of saving, he says, is prize-linked savings – programs in which savers earn the chance to win cash prizes for making deposits. This, Gilmore says, converts the stress and sacrifice of saving into a feeling of reward, possibility, and suspense, and it comes at no financial risk to consumers.

Brian Gilmore, Commonwealth

Financial institutions can implement prize-linked savings through a variety of savings vehicles, and the concept works – since piloting their first program with partners in 2009, Commonwealth has seen 92,000 accountholders save $195 million. On average, Gilmore says, that’s a savings of $2,315 per person, most of whom are financially vulnerable.

Non-traditional workers are another population with unique financial needs, says Commonwealth’s Keyarash Jahanian. When Commonwealth surveyed and interviewed workers nationwide, they learned that all financially vulnerable workers feel pressure regardless of job situation, but non-traditional workers are far more likely to use alternate financial services, struggle with income volatility, and lack health insurance and retirement savings.

Keyarashan Jahanian, Commonwealth

Attendees leverage best practices to tackle the new financial services challenges in the 21st century.

Credit unions looking to serve non-traditional workers need to understand how they think about their work, Jahanian observes. Commonwealth’s research found that people don’t categorize themselves as “gig workers” or “temp workers” – they talk about the nature of the work they do, like “I drive for ride-share companies” or “I work in customer service and find work through temp agencies.” These workers also describe their financial situation in terms of their aspirations and hopes for the future, he says, so credit unions marketing to non-traditional workers should do the same, rather than focusing on risks or challenges. 

Many non-traditional jobs fail to provide financial security, Jahanian notes, but they fulfill other needs – for example, work-life balance, a sense of pride in one’s work, flexibility, and independence. Ultimately, Jahanian notes, people deserve the privilege of choice when it comes to employment. Credit unions have an opportunity to better serve non-traditional workers by helping to insulate them from income volatility while recognizing that the meaningful nature of their work is an attractive trade-off.

Supporting high-stakes decision-making

Self-service has raised the level of customer involvement in the production process, says Harvard Business School PhD candidate Michelle Shell. That may seem efficient, but it may actually drive up service costs in the short term by leading to higher demand of traditional service 

“Just adding the possibility of touch can improve the trajectory of these long-term service relationships."
Michelle Shell
Harvard Business School

"Just operating in an emotional service setting can result in penalties for companies... that come from the emotion that customers feel." 

Michelle Shell
Harvard Business School

channels. This is because the high stakes, ambiguity, and information asymmetry of making financial decisions raises anxiety, she explains, and anxious people want reassurance from other humans. She warns that, because financial self-service forces people into anxious situations without human contact, it can lead to lower customer satisfaction and trust.

Based on her research, Shell says, simply adding an invitation to connect to a human has an offsetting positive effect that can break the link between anxiety and dissatisfaction. She adds that credit unions need service design that considers emotional variation in order to manage high anxiety situations.

Michelle Shell discusses self-service technology.

"When we're deploying self-service technologies into these spaces - into these emotional service settings or anxiety-filled service settings - we may actually be putting anxious customers (members in your case) in situations where they're being asked to make decisions, really important decisions, at a time when they're least able to do so. And so we've got to think about the design of self-service technologies..."
Michelle Shell, Harvard Business School

Member-centered service design

Designing high-quality financial services requires tapping into collective wisdom – the knowledge that is shared across a variety of stakeholders within a community. For credit unions, that could mean including members in the design process, says design firm Foossa’s Lee-Sean Huang, noting that design thinking begins with empathy. Done well, he says, good service design returns value for both members and financial service providers.

David Reed and Lee-Sean Huang of Foossa

Foossa together with Parsons School of Design, partnered with the city of New York to improve uptake of a free tax preparation program, called VITA, and increase client retention at a financial counseling program. To reshape VITA’s marketing and engagement strategy, says Foossa’s David Reed, the design team created collateral to guide the co-design process, including a deck of challenge cards that inspired and focused conversations among groups of people with varying levels of prior knowledge and comfort speaking up. Tools like these reduce “blank slate anxiety,”Reed says, as do templates in which people are encouraged to sketch, even when they don’t think they have good drawing skills. It can take years to move from sketches to prototypes and then final products, he notes, but the process is worth it.

After Foossa used findings from their design process to make changes to the city’s financial counseling program, the average number of sessions per client rose steadily.

Attendees practice crafting a creative brief to structure effective design collaborations.

Credit unions can use design tools to improve the member journey, Huang says – but don’t think in terms of the various departments in your organization. Instead, focus on the props (debit cards, mobile app), people (tellers, call center agents), and processes (loan applications, technical problems) that members will encounter. Reed encourages credit unions to “create multiple on-ramps for processing inbound information.” Organizations tend to rely on only a few standard feedback methods, he notes, but there are a variety of ways that a credit union can learn from members. What might your organization be missing?

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