Growth Strategies for Credit Unions

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Presented this at the Credit Union Association of New York's Annual Meeting.

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Growth Strategies for Credit Unions

  1. 1. Growth Strategies: Retention is the New Acquisition Your presenter: Denise Wymore
  2. 2. When the going gets tough....
  3. 3. When the going gets tough.... The tough don’t cut back on marketing!!!
  4. 4. But you should take this opportunity to STOP doing what doesn’t work....
  5. 5. “We need to go after...”
  6. 6. “We need to go after...”
  7. 7. "Stalking" is defined as repeated and persistent unwanted communications and/or approaches that produce fear in the victim. The stalker may use such means as telephone calls, letters, e-mail, graffiti and placing notices in the media.
  8. 8. "Stalking" is defined as repeated and persistent unwanted communications and/or approaches that produce fear in the victim. The stalker may use such means as telephone calls, letters, e-mail, graffiti and placing notices in the media. (a.k.a. Marketing)
  9. 9. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  10. 10. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  11. 11. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  12. 12. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  13. 13. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  14. 14. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  15. 15. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  16. 16. Marketing Media Timeline: 1990 2009 1924 1941 1704 1984 1876 1681
  17. 17. Stalking....
  18. 18. Stalking....
  19. 19. Stalking....
  20. 20. Stalking
  21. 21. Stalking
  22. 22. Stalking Talking
  23. 23. Stalking:
  24. 24. Stalking:
  25. 25. Stalking:
  26. 26. Stalking: Talking
  27. 27. Stalking
  28. 28. Stalking
  29. 29. Stalking Talking
  30. 30. Stalking
  31. 31. Stalking
  32. 32. Stalking
  33. 33. Stalking Talking
  34. 34. Stalking
  35. 35. Stalking
  36. 36. Stalking Talking
  37. 37. The price tag for all this stalking?
  38. 38. The price tag for all this stalking? $250.00 per new member*
  39. 39. The price tag for all this stalking? $250.00 per new member* *Sheshunoff - it costs community financial institutions approximately $250-$275 to acquire a new member/customer
  40. 40. The PFI myth. . .
  41. 41. The PFI myth. . . The average customer has 1.56 - 2.2 relationships with their PFI
  42. 42. The PFI myth. . . The average customer has 1.56 - 2.2 relationships with their PFI Typical households have as many as 8 different financial service providers.
  43. 43. The PFI myth. . . The average customer has 1.56 - 2.2 relationships with their PFI Typical households have as many as 8 different financial service providers. First year attrition rates are as high as 25%!
  44. 44. loyal vs. satisfied
  45. 45. loyal vs. satisfied
  46. 46. loyal vs. satisfied
  47. 47. Banking is an errand. I get in, I get out, no one gets hurt... ...I am satisfied.
  48. 48. We asked the wrong question:
  49. 49. We asked the wrong question: On a scale from 1 - 7: How satisfied are you with the credit union? Comments:
  50. 50. Loyal members do three things:
  51. 51. Loyal members do three things: 1. Buy more from you. (repeat business) 2. Market for you! (tell their friends/co-workers) 3. Tell you how to improve your business (“I’ve been a member since....”)
  52. 52. Instead of “going after” your members let’s try listening to them.
  53. 53. Instead of “going after” your members let’s try listening to them. By asking the ultimate question....
  54. 54. Net Promoter asks the “ultimate” question:
  55. 55. Net Promoter asks the “ultimate” question: WHY did you answer the way you did? "On a scale from 0 - 10... How likely is it that you would recommend the Credit Union to a friend, family member or colleague?"
  56. 56. “You can’t grow a business unless you treat people so well that they come back and bring their friends.” - Fred Reichheld, The Ultimate Question
  57. 57. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  58. 58. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth Detractors = 0-6 Unhappy customers trapped in a bad relationship *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  59. 59. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth Passives = 7-8 Satisfied but can be easily wooed by the competition Detractors = 0-6 Unhappy customers trapped in a bad relationship *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  60. 60. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth Promoters = 9-10 Loyal enthusiasts who keep buying and urge their friends to do the same Passives = 7-8 Satisfied but can be easily wooed by the competition Detractors = 0-6 Unhappy customers trapped in a bad relationship *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  61. 61. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth P - D = NPS *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  62. 62. Net Promoter Score Sheet* GOAL: protect profits by protecting our word of mouth P - D = NPS *Source: The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld
  63. 63. NPS Leaders in the US Average American company sputters along at 20%
  64. 64. NPS Leaders in the US USAA = 82% Average American company sputters along at 20%
  65. 65. NPS Leaders in the US USAA = 82% Average American company sputters along at 20%
  66. 66. NPS Leaders in the US USAA = 82% COSTCO = 79% Average American company sputters along at 20%
  67. 67. NPS Leaders in the US USAA = 82% COSTCO = 79% Apple = 79% Average American company sputters along at 20%
  68. 68. NPS leaders do crazy things:
  69. 69. NPS leaders do crazy things: 1. Pay their people too much. 2. Fire customers. 3. Pay employees to quit. 4. Don’t try to appeal to everyone. 5. Charge the most in their category.
  70. 70. COSTCO and NPS
  71. 71. COSTCO and NPS Score = 79% 45 million members. Sales per store are almost twice of nearest competitor Wal-Mart’s SAM’S CLUB Very little money spent on advertising. Low turnover and long tenure boost productivity, reduces costs.
  72. 72. Business leaders in all industries are adopting Net Promoter
  73. 73. Business leaders in all industries are Business leaders in all industries are adopting adopting Net Promoter Net Promoter
  74. 74. The Credit Union Average SOURCE: Filene Research Institute and Satmetrix
  75. 75. The Credit Union Average 54.3% SOURCE: Filene Research Institute and Satmetrix
  76. 76. Credit Union Membership in the US 87500 190625 293750 396875 500000 2005 2006 2007 2008 # of New Members Credit unions were beginning to steal members from each other!
  77. 77. Perception vs. Performance Gap
  78. 78. Perception vs. vs. Performance Gap Perception Performance Gap 100% 80% Percent of Companies 60% 80% 8% Companies that Companies believe they whose 40% provide a customers superior agree experience 20% 0% Believers Achievers Source: Bain & Company
  79. 79. The 8% of Achievers Vastly Outperform their Competition
  80. 80. The 8% of Achievers Vastly The 8% of Achievers Vastly Outperform their Outperform their Competition Competition Average annual real revenue growth Average annual real net income growth 20% 19% 10% 9% 8% 15% 6% 10% 4% 3% 5% 2% 2% 0% 0% Non-Achievers Achievers Non-Achievers Achievers Source: Bain & Company
  81. 81. SOURCE: Satmetrix
  82. 82. Unlucky. SOURCE: Satmetrix
  83. 83. The Bank Average “Banking had an average NPS of approximately 15%, with USAA leading at more than 100 points above the sector’s laggard, Citigroup.” SOURCE: Satmetrix - Spring 2009 report
  84. 84. The Bank Average “Banking had an average NPS of approximately 15%, with USAA leading at more than 100 points above the sector’s laggard, Citigroup.” 15% SOURCE: Satmetrix - Spring 2009 report
  85. 85. The Promoter Advantage Loyalty Economics 4000 3000 2000 1000 0 Have referred Will likely stay Promoters Detractors SOURCE: Satmetrix and Filene Research Study - 2007
  86. 86. Loyalty Economics 7% And it’s FREE! 93% Detractors Promoters
  87. 87. “How many friends, family members or colleagues have you referred to the Credit Union in the last 12 months?” 1,045 members responded Loyalty Economics 7% And it’s FREE! 93% Detractors Promoters 1,197 members were referred.
  88. 88. Is there a correlation between NPS and growth in a company? Yes! In a 2003 study based on more than 150,000 customers, we found a very strong correlation between Net Promoter Scores and a company’s growth relative to its competitors. From the airline industry, to retail banks, to delivery services, to personal computers, firms with the best NPS demonstrated superior growth. Companies that have achieved sustainable growth over a ten year period have double the NPS of others.
  89. 89. Is there a correlation between NPS and growth in a company? Yes! In a 2003 study based on more than 150,000 customers, we found a very strong correlation between Net Promoter Scores and a company’s growth relative to its competitors. From the airline industry, to retail banks, to delivery services, to personal computers, firms with the best NPS demonstrated superior growth. Companies that have achieved sustainable growth over a ten year period have double the NPS of others.
  90. 90. Hope is not a strategy. That's also the penalty of expectations. Amazon became the category leader in online retailing because it set new expectations in online shopping, and it almost always meets or exceeds them; its Net Promoter Score ranking is 36 points above the median in its category. Category leaders are cultural leaders in business, sports, non-profits and government. Strategies, behaviors and some lives are modeled on category leaders. It's a perk and a responsibility. It's heady and scary. The cost of reticence is goodwill.
  91. 91. “I believe most CEOs do care--at least strategically-- about having happy users, but wouldn't waste a single synapse actually thinking about specific ways to make it happen.” - Kathy Siera, Creating Passionate Users Blog.
  92. 92. NPS helps you avoid bad profits.
  93. 93. Bank fees growing more numerous and expensive AMY REININK Sun staff writer Published: Sunday, June 10, 2007 at 11:40 a.m. Last Modified: Sunday, June 10, 2007 at 12:00 a.m. The fees kept adding up. First, Sun State Credit Union charged Gainesville resident Karen Soesbe $2 for coming in more than four times a month. Next came the charge for not having her transaction slip ready at the drive-through window. When Soesbe was charged for not using the credit union's telephone banking system, she decided to fight back, sending an angry letter to the credit union's president and filing a formal complaint with the National Credit Union Association. "I was outraged," Soesbe said. "It's not a lot of money. I know that. But to be charged $2 just for not having your bank slip at the drive-through teller just seems wrong." In Soesbe's case, Sun State abandoned the three fees voluntarily. Sun State President and CEO Jim Woodward said the decision was based on exit interviews with members leaving the credit union, and that the move was already in the works when Soesbe complained.
  94. 94. Bad Profits = Profits earned at the expense of a relationship. Good Profit - Bad Profit
  95. 95. Bad Profits = Profits earned at the expense of a relationship. Good Profit - Bad Profit $50 membership fee to COSTCO with rebate at the end of the year on all your purchases.
  96. 96. Bad Profits = Profits earned at the expense of a relationship. Good Profit - Bad Profit $50 membership fee Everything the airlines are doing to COSTCO with today. rebate at the end of Charging for: the year on all your - pillows purchases. - sodas - headsets to watch the movie - checked luggage
  97. 97. Bad Profits = Profits earned at the expense of a relationship. Good Profit - Bad Profit $50 membership fee Everything the airlines are doing to COSTCO with today. rebate at the end of Charging for: the year on all your - pillows purchases. - sodas - headsets to watch the movie - checked luggage Except Southwest Airlines
  98. 98. Truth in Advertising:
  99. 99. Truth in Advertising:
  100. 100. Do what you say you’re going to do.
  101. 101. Do what you say you’re going to do. NPS bridges the gap between what you say you are going to do and what you are known for doing.
  102. 102. www.denisewymore.com me@denisewymore.com http://denisewymore.wordpress.com denisewymore

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