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Create Loyalty and a Better Experience With a Strategy You Might Not Expect

five star experience rating with the fifth star actually being a heart
By Steve Heusuk

2 minutes

Reduce member anxiety using these three strategies.

Sponsored by CUES Supplier member CUNA Mutual Group

Leading consulting firms, such as Forrester and Bain & Co., have long maintained that emotions are key in shaping customer experience perceptions. Bain reports reducing anxiety as the key emotional element of customer experience in banking. CUNA Mutual Group surveyed 1,005 consumers online to better understand how reducing anxiety shapes customer experience and loyalty perceptions.

Consumers Are Anxious About Finances

Findings indicate a sizable portion of U.S. consumers are experiencing some financial anxiety:

  • 39% agreed with “I am more anxious when spending money today than I was five years ago”
  • 29% agreed with “I feel anxious about my current financial situation” 
  • 20% agreed with “My level of debt is ruining the quality of my life”

Consumers rated their primary financial institutions on three standardized customer experience questions measuring the degree to which they accomplished what they wanted to, how easy it was to interact with their primary financial institution and how the interactions made the consumer feel. For all questions, consumers not anxious about their current financial situation gave significantly higher ratings than anxious consumers. In other words, anxious customers/members “ding” their PFIs by giving lower customer experience ratings.

Most Are Stressed Before and During Loan Application

We asked consumers who applied for a loan in the past five years what emotions they felt when 1) deciding to apply for a loan and 2) when completing the loan application. After pooling responses for both phases of the borrower journey, we found most borrowers (61%) stated they were anxious, stressed and/or afraid at some point before or during the loan application process.

Most commonly cited concerns were (in descending order of importance): 

  • Worried about not knowing if I would be approved
  • Worried my credit score would not be high enough
  • Worried if borrowing money was the right choice for my situation 
  • Concerned I had too much debt already
  • Not certain if I could afford payments

Lenders’ Actions to Reduce Worries Drive Loyalty

We examined the relationship between lenders actions to reduce borrowers’ anxiety, stress and/or fears and two important customer loyalty metrics: likelihood to consider the lender for the next purchase and likelihood to recommend the lender to a friend/family member. Loyalty ratings given by borrowers whose lenders took actions to reduce their stress were over 30 percentage points higher than loyalty ratings given by borrowers whose lenders did not.

The leading concerns mentioned hint at ways credit unions can reduce borrowers’ anxiety. Some examples include:

  • Informing members of the pre-approved credit offers for which they qualify 
  • Providing members with free credit scores and simulators to show the impact of financial decisions on their credit scores
  • Counseling members on when not to borrow
  • Providing members with access to debt-to-income and loan affordability calculators

This research leaves little doubt credit unions taking such actions will be rewarded. While this study focused on anxiety related to lending, it’s easy to see how addressing members’ worries related to saving, spending and managing money could improve members’ perceptions of their credit unions. Banks and fintech startups are investing large sums in technology to improve functional elements of customer experience, such as speed, ease and convenience. Credit unions have a significant opportunity to differentiate themselves from competitors by effectively reducing members’ anxiety digitally.

Steve Heusuk is senior manager of customer intelligence for CUES Supplier member CUNA Mutual Group, Madison, Wisconsin. Contact him at 608.665.7854 or steve.heusuk@cunamutual.com.
 

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