Feb 01 2010

Customer Experience and Credit Union Opportunities: A Collaboration with McKinsey & Company

Report  
Number  
203

Credit unions are rightly famous for putting members first and keeping them happy. For continued growth, happy may not be the right focus.

Mark Meyer
Mark Meyer
President + CEO
Filene Research Institute
Ben Rogers
Managing Director, Research
Report Number 203

Executive Summary

“Credit unions seem to be like the guy who’s best friends with every girl in school but can’t get a date.”

Every high school has a Tom. He’s a decent student, and he’ll attend an OK college. He’s on the cross-country team but finishes most races out of the top 10. His pants are a few years past the going style. Tom is earnest and sincere, and actually pretty fun once you get to know him. His sincerity has won him the confidence of many of the girls. But Tom has one big hang-up. When it comes to serious dating, Tom always strikes out. He can get a date to the dance, but long-term, steady relationships are where he falls short. Every girl likes Tom well enough, but none of them will commit to him. Credit unions are like Tom.

What is the research about?

This report, a collaboration between the Filene Research Institute and global consultancy McKinsey & Company, explores the mystery of Tom:

  • Why do consumers consistently give credit unions their highest satisfaction scores and yet take their business elsewhere?
  • And, just as importantly, what can credit unions do about it?

McKinsey relies on regular, proprietary surveys of consumers to inform its advice on a broad range of industries—from grocery stores to airlines, and from hotels to Internet service providers. The 2009 customer experience survey on which most of the report is based draws on 3,900 respondents who offered their views on retail banking. The survey measures satisfaction, asks what matters most for driving satisfaction, and seeks to validate the relationship between satisfaction and value creation.

What are the credit union implications?

Credit unions should treat member satisfaction and improved member experience as means to an end—never as ends in themselves. The right satisfaction-driven goals will be different for every credit union, but they should include concerns about long-term viability, market share growth, wallet-share growth, and sustainable profitability. Member satisfaction efforts that do not consider ROI inflate expenses. With margins thin, and likely to remain so for the foreseeable future, credit unions can’t afford satisfaction at all costs.