Delivering a Total Member Experience

Gone are the days of treating one member as part of a whole. Today, members demand to be treated as individuals, and they tell credit unions what they want, when they want it, how they want it, and what they are willing to pay—if anything.

To achieve the level of intimacy required by members’ evolving, “me-focused” behavior, successful CUs are leveraging every single bit of information they know and can find about their members.

Leveraging information to increase the total member experience, or TMX, demands a coordinated strategy of information governance. Gathering, storing, analyzing, inferring and managing the right level of contacts through all channels and for all products and services is no small task. But knowledge is power.

Many CUs are still organized around silos of products and services, with each unit sharing minimal information outside of a central core system. CUs can achieve higher TMX when institutional knowledge is not only shared across the credit union, but also used to the member’s advantage. For example: A member has a new auto loan with the credit union. The credit union thinks its new mobile loan application with e-signed documents generates a high TMX, but in reality, it simply meets the member’s expectation. Improving TMX requires more than riding the technology wave.

A member will have a great TMX when the credit union:

• proactively affirms the member’s ability to negotiate a fair purchase price with an email describing the average price paid by all previous buyers of the same make and model;
• recognizes the open date of a mortgage loan trade line to be 2006 and offers to refinance with enough savings to cover half of the new car loan; and
• replaces new member onboarding with an ongoing conversation about this member.

This high level of TMX is only achievable with information. Every CU has access to it, yet very few are reaping the benefits.

Information access is a two-edged sword. Members have access to unlimited information. With a few mouse-clicks, members, or prospective members, can know the service charge and features of every checking account from every financial institution. They can shop and apply for a credit card from a long list of lenders without leaving the house or even making a phone call. Every member counts here. Increasing loyalty to the CU’s brand through high levels of TMX is critical to growth in a slow-growth environment.

Loyal members are advocates. They buy more, and they refer more new business than members who are simply satisfied with the service they receive for everyday transactions.

Competition

Today’s member does not compare her experience with the credit union to her experience with only other credit unions and banks. The comparison is based on all service providers the member interacts with. Whether it’s Amazon’s One-Click purchases, Verizon Wireless’s Mobile app for usage monitoring and alerts, or Spotify’s Recommended Playlist suggestions, the member’s individual TMX with her primary financial service provider is calculated based on non-CU experiences. These non-FI interactions are why that new mobile loan application the credit union may think is so cool is met with “meh” by the member.

Adding more pressure is the fact that credit unions cannot expect that having the latest and greatest technology will be a competitive edge in the future. To survive, all financial institution competitors are going through a “delivery redirect” and matching, feature for feature, all the credit union’s current “cool” mobile and online offerings.

Credit unions also cannot count on a history of being the lowest priced provider as a competitive edge going forward. Through a variety of industry factors, including increased regulatory expenses, mandated price and fee reductions, and lengthy low-rate environments, the historical pricing advantage model is changing.

• New entrants to the market are not saddled with legacy fixed assets and fixed expenses, and these Internet-mostly banks can address their process issues before they open the doors.
• The drumbeat of taxation never ceases.
• Banks are re-awakening to the consumer loan growth opportunities in their customer base.

Competition will weed out low performers. It always does. As competitors make better use of information to target your members, those member relationships are at risk of being stolen. To understand a member’s relationships with other financial institutions, CUs should conduct a detailed review of the member’s credit bureau report, check-writing habits and online bill-pay payees. Simply asking the member during opportune contacts is another method of harvesting relevant information. Unfortunately, most CUs do not have enough resources assigned to these efforts, and the efforts are not supported with good processes and information governance. The information is stored and accessible, but not used strategically.

Change

Just like everybody knows 15 minutes can save you 15 percent (per the Geico ad), we all know change is everywhere, all the time. Change is also occurring at a faster pace. We don’t have the luxury of years or quarters to get things accomplished. We now have weeks and months within which to execute meaningful change, and recognizing and managing this fact is a key to success. But it is going to take more than reviewing last week’s or last month’s sales numbers. The changes that will impact a CU’s long-term growth and survival happen outside the walls of the credit union. Unless someone is responsible for constantly evaluating the external landscape, these changes can blindside a CU, resulting in ever-more reactionary efforts.

Managing change is more than establishing a project management officer. A good PMO will help ensure projects are resourced and documented adequately, vendors are managed effectively, and project issues are escalated appropriately. But most PMOs know nothing about the core business processes undergoing change. Too often the line of business turns over its process re-engineering efforts to the PMO. These “process improvement” projects, usually in the form of a new system implementation, rarely redesign the process from end-to-end to eliminate waste and take advantage of the information management capabilities of the new system.

Processes are at the core of how CUs interact with their members. Cornerstone defines a process as a complete set of activities that produce a final product. For examples, consider new accounts: sale to first statement; consumer loan delivery: application to lien perfection; and mortgage loan delivery: application to investor sale.

CUs generally define processes much smaller. For examples, think of debit card instant issue, online banking enrollment, underwriting decision-making and appraisal review.

Each of these activities is owned by someone different and this too-many-hands-in-the-pie scenario is the reason processes today look like Frankenstein and contribute to high overhead, inefficiency and errors.

To effectively recognize and manage change, a CU must assign process owners to its core processes. A single process owner from the senior manager ranks will be responsible for the entire process, including process design, process performer selection (coaches and players), training, pay, incentives, technology and how it is used in the process, and process performance metrics. This process owner is responsible for ensuring the process meets the goals of the credit union and the needs of other stakeholders, such as compliance, electronic banking, audit and marketing. But these other stakeholders do not get to dictate how the process performs to meet their needs.

To achieve the level of member intimacy and engagement required to boost TMX, process owners must own and coordinate the activities of the entire process. The process owner and his respective process improvement team will have a laser focus on designing and deploying a process that meets and exceeds member expectations. The process owner will develop the strategy for the process, remain alert for external changes that demand strategic adjustments, and constantly utilize process performance metrics to motivate process performers and the process improvement team.

The process improvement team will constantly identify and execute on improvements. This includes leveraging information to reduce the time, errors and redundancies. The PMO, with an enterprise-wide view, can play a role to ensure that process information is gathered only when it is not already available from other processes, shared from the same data source as other processes, and protected and managed for its entire lifecycle. The PMO can and should play a role in information governance for the process, but the process owner is responsible for the performance and results of the process.

In Closing

TMX can only be measured and improved with information. Information is only valuable when it is timely, accurate, accessible, relevant, actionable, and acted upon. Managing the CU’s information as the input and output of a process is a critical component of a successful TMX strategy.

Michael Croal is a senior director with Cornerstone Advisors, a CUES Supplier member and strategic provider based in Scottsdale, Ariz.