Intuitively, we know delivering the services members want can convert your relationships into better financial performance. But now there’s proof: Investing in the right technology means higher returns.
Callahan & Associates’ 2015 analysis reviewed the performance of a large group of credit unions that offered easy-access fintech services, like mobile banking, remote deposit capture and electronic bill pay. The study, which compared these credit unions’ results with that of institutions not offering these services, found investing in digital services technology leads to greater growth in three major categories: loans (7.1%, versus 4.1%), shares (3.2%, versus 2.0%) and assets (3.5%, versus 2.3%). What’s more, the forward-looking credit unions’ average member relationship increased by 4% over a six-year period, compared with 3% for those that didn’t make the investment.
But offering anytime, anywhere digital access to members makes it more challenging to stay connected with them. So, how do you keep members engaged in an age of do-it-yourself banking?
For many, the answer is to invest in a powerful Customer Relationship Management (CRM) solution, which allows you to consolidate member information across the organization, whether their digital or person-to-person interactions are with a member services rep, loan officer or the call center. Members never have to tell their story twice, and employees aren’t left wondering how members’ concerns were resolved the last time. Research by Bain & Company’s Frederick Reichheld, (who invented the net promoter score) shows increasing customer retention rates by 5% increases profits by 25% to 95%.The result is greater satisfaction for both members and your staff. And, the report noted, happier members are less likely to leave – and they purchase twice the number of products as unhappy ones. Further, a recent Gallup study showed that fully engaged retail bank customers bring 37% more annual revenue to their PFI than those who are unengaged. And because it’s less expensive to retain members than to attract and serve new ones, a mere 5% increase in retention can lift profits by as much as 80%.
Armed with robust CRM data, your staff can focus marketing efforts on members who are most likely to accept an offer, boosting income up to 41% for each of your member service representatives, while cutting sales and marketing costs by 23%. According to Nucleus Research, the average returns from using a quality CRM system have increased since 2011, from $5.60 to $8.70 for every dollar spent.
As business guru Peter Drucker famously said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” Using a powerful CRM to track and analyze your members’ needs can help you tailor marketing communication to each one’s specific interests – a benefit to both members and your bottom line.
See for yourself how a robust CRM program can help your credit union grow revenues and keep members close. Download our eBook, “CRM in Credit Unions: The Undiscovered Revenue Source.”
Sean O’Donovan, Chief Marketing Officer