Mar 29 2007

A Fresh Approach to Measuring Member Loyalty

Is your credit union relevant? Is your credit union providing value to its members? Dr. Laura Brooks, PhD, of Satmetrix Systems evaluates what drives satisfaction of the consumer experience in, A Fresh Approach to Measuring Member Loyalty.

Dr. Brooks employs a new metric called the Net Promoter Score® (NPS), a method that attempts to predict organizational growth and customer retention. Net Promoter is a simple yet elegant tool to measure consumer loyalty that is gaining recognition as a way to manage customer experience and profit growth. This report provides your credit union with a primer on the NPS metric and will catalog the preliminary statistics we found while measuring the NPS of seventeen credit unions and nearly 40,000 members. The study’s key findings include:

  • The survey response rate reached almost 13%, compared with an average of 3% to 5% for most consumer research studies.
  • Credit unions scored an overall NPS of 54.3% (67.7% promoters and 13.4% detractors).
  • The highest credit union NPS was 79.1%, and the lowest was 19.6%.
  • Credit unions’ overall NPS score exceeded that of other retail banking outlets.
  • Some characteristics of promoters are:
    1. Likely to see the credit union as their primary financial services provider.
    2. Have a good overall experience with their credit union and indicate that it exceeds their expectations in multiple areas.
    3. Have been using their credit union for a significant amount of time.
  • The drivers of NPS in credit unions are fairly intuitive: overall product/service quality, overall value, and customer service/support experience.
  • High NPS correlated with high credit union asset growth, high membership growth, and high loan growth