Satisfaction (Attitudinal)
Member satisfaction measurements are customary in the credit union industry and are an indicator of retention.  Indeed, in most cases, satisfaction is the only measurement tracked.

Customer Effort (Attitudinal)
In 2009, the Customer Contact Council published its take on gauging member loyalty. The Council claims loyalty can be directly affected by the amount of effort a customer must exert to accomplish his/her objectives in dealing with a company. In short, the easier a company makes it to conduct business, the stronger the  subsequent loyalty. Conversely, business practices that impede a customer’s ability to satisfy their needs will drive disloyalty. According to the Council, the probability that a service interaction will drive disloyalty is approximately four times greater than the chance it will create any positive loyalty impression. In other words, as a function, customer service typically plays on the ‘negative side' of the loyalty field.

In response, the Council created the Customer Effort Score. When used with specific interactions, products, and delivery channels, the results of the CES survey provide evidence to complications in a company’s business model. This information becomes actionable as the company works to alleviate these service obstacles.

Net Promoter Score (Attitudinal)
Potential for future growth is measured using the NPS (Net Promoter Score) methodology.  This is a well-recognized indicator for member loyalty and the potential for future organic growth, and is often used within the financial industry.  It is calculated by subtracting detractors (those who answer with a 0 – 6) from the promoters (those who answer 9 or 10) to the following question:

“How likely are you to recommend the credit union to a friend, family member or co-worker?”

Behavioral Loyalty Metrics

Primary Financial Institution
Members who identify the credit union as their primary financial institution are indicating that they have chosen to do a majority of their business with you. PFI can be directly linked to higher balances, additional accounts/HH and higher share of wallet. PFI is only one way to look at behavioral loyalty; as a member may consider you their PFI from a transactional account perspective, but still look elsewhere for loans.

Account Growth
Enhancing the relationship between the credit union and its members through additional product usage is important to gain efficiencies and demonstrate loyalty. We will measure the percentage of households that opened additional accounts with the credit union over the last 12 months. 

Member Referral Activity
With the NPS, we get insight into members “intention” or willingness to refer the credit union to others. This may or may not translate into actual word of mouth activity and organic growth through recommendations. We differentiate between intent and actual behavior to find those highly loyal members who are actively helping the credit union grow membership.

Share of Wallet
To gauge share of wallet, your credit union can use self-reported information, or you can compare member balances of deposit and loan products held with your credit union compared to balances held at other financial institutions.  SOW is defined as the percentage of total balances the credit union has captured. 

The Four Dimensions

Loyalty

There are two types of loyalty: behavioral loyalty and attitudinal loyalty. Behavioral loyalty is demonstrated when a consumer engages repeatedly with the same company, even if it’s because of a lack of options. Think of someone who flies the same airline consistently simply because their local airport acts as the airline ’s “hub”, or because they have invested in a reward program. Even though the company may see consistent repeat business with this “loyal” customer, that business may disappear with the introduction of a new alternative.

Attitudinal loyalty, however, is demonstrated with a consumer’s attitude toward a product or service. Further, the concept of “brand love” extends attitudinal loyalty to demonstrate consumers who are “unreasonably loyal” to certain companies or products, e.g. Apple.

Researchers have varied conclusions on whether either type of loyalty precedes the other, but most agree that attitudinal loyalty is less valuable when behavioral loyalty is not present. After all, people may love the credit union in concept, but unless and until they participate in the cooperative, there’s no benefit for either party.

Measuring solely member satisfaction is insufficient for the needs of the organization and doesn’t provide the depth needed to gain insight and drive strategy for continued growth. Rather, we look to measure and understand member engagement through loyalty, which is important for several reasons.

First, it provides a retrospective look at how well the credit union is meeting the needs of its members. Second, it provides an indicator of future business with the member. Finally, it adds the additional dimension of current product participation (share of wallet).

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Member Engagement Surveys