Member Feedback Important, Yet It's Use
Isn't Growing

By Jon Haller
Director of Market Research, CUNA

Despite growing competition for members' financial services business over the past few years, credit unions are no more likely than they were in 1995 to obtain feedback from their members regarding their perceptions of the credit union, their use of other providers' services and their reasons for taking their business elsewhere.

According to a market-research needs-assessment survey conducted by CUNA Research, 58% of credit unions with assets of $10 million or more had conducted a member survey in the previous four years—virtually unchanged from the 57% figure recorded in a similar 1995 study.

While the use of member surveys increases as asset size increases, one in three credit unions with assets of $50 million to $200 million had not conducted studies during the previous four-year period.

The study also shows that credit unions are now more likely to outsource their surveys than they were in 1995. It goes on to reveal that while about 35% of credit unions with assets of under $50 million that had done a survey turned to an outside vendor to conduct the project (i.e., they did not do the survey in-house), the figure rises dramatically as asset size increases, reaching nearly 90% among those with assets of over $200 million.

What do credit unions look for when deciding which supplier to use for their survey? Of 16 different factors listed, price is the number one consideration, followed by the vendor's survey research expertise, credit union expertise, and ability to provide recommendations based on the survey findings.

Secondary decision factors include whether the credit union can customize the questionnaire to suit their needs; getting a written analysis on how the attitudes and behaviors differ among members in the various age groups, income groups, etc.; how long it takes for the project to be completed; and whether the credit union's findings can be compared/benchmarked against others' results.

Identifying the credit union's strengths, areas needing improvement and opportunities to attract more of members' business clearly serve as the leading reasons for conducting a member survey.

Looking for an additional benefit? Enter the "target-marketing matrix" —a matrix of financial services and the types of members (grouped by the combination of age and household income) who are most and least likely to be using and/or seeking each service (anywhere). The credit union's marketing materials for any given product are then sent only to those members who are the best prospects.

Armed with this information, credit unions save money on postage and printing, are able to better craft and target their marketing messages, and improve their marketing efficiency —all contributing to an improved "bottom line." Staff's workload will also be reduced, since they won't have to sort through countless inquiries and applications from members who clearly don't qualify.

Most leading credit union research suppliers provide such a matrix, based on the financial behaviors of the credit union's own membership, as a standard part of their survey reports.

Consumers no longer hesitate to move their business away from financial institutions unable or, worse yet, unwilling to meet their needs. Members' service-related expectations are increasing and any credit union set on conducting "business as usual" runs the all-too-real risk of losing their members' business to more aggressive, customer-driven competitors.

Also, in these times of shrinking financial spreads in credit unions, increased marketing efficiency takes on greater importance.

A member survey will give you the information you need to ensure that your credit union is best meeting your members' needs, and improve your bottom line.

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