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It seems like common sense to invest time and resources to introduce new members to the benefits and features of everything your credit union offers. This kind of good onboarding makes financial sense, too, suggests Sean Yokley.
Credit unions typically spend about $450 in marketing to bring each new member in the front door, only to watch that new member leave through the back door within a year, on average. That is three to four times the attrition rate of other members, says Yokley, co-founder and CEO of Onboardability , Kansas City, Mo., citing research from Callahan & Associates and J.D. Power & Associates.
“When you look at the economics of that new member churn, it becomes pretty staggering. It works out to between 40 and 60 percent of the annual marketing budget for some credit unions,” he notes. “CUs put all that time, energy and financial resources into new member acquisition, and then onboarding comes down to a single phone call or maybe a welcome packet. After that, new members are relegated to the same marketing tactics as every other member.”
To help fill that void, Onboardability launched late last year a turnkey automated platform to facilitate regular communications with new members, largely via email, and to track responses to those interactions to tailor additional offers. The goal is to enhance members’ familiarity with the full range of their credit union’s products and services and “to navigate them to where they look like the credit union’s best members,” Yokley says. The company works with credit unions to customize a communication conduit through four phases: welcome and introduction, usage and activation, cross-sell, and loyalty and retention.
Making it Happen
It’s not that credit unions don’t understand the need for onboarding. Most have a program, but they may not have systems in place to ensure that frontline staff are actively involved in welcoming new members with information and offers for additional products and services and to track onboarding results, says Michael Neill, CSE, president of CUES strategic partner MNA Consulting, Nashville, Tenn. Neill works with CUs to improve their member experience through the ServiStar program.
One problem is time, Neill suggests. Many credit unions that cut back staffing during the Great Recession haven’t yet returned to pre-2008 employment levels, so they likely have the same number of employees serving more members—with expectations to perform onboarding contacts in addition to their other duties.
“You’ve got data input, transaction processing, form completion and all sorts of other operational duties, including some audit responsibilities, which are all being measured and for which you’re being held accountable,” he notes. “On top of all that, you’ve got new member onboarding, which you’re not being held accountable for. If you ask employees, they’ll say, ‘I know I need to be doing it, but I just can’t find the time.’”
The role of frontline staff in onboarding can be extremely labor-intensive, with expectations to send hand-written notes and follow up by phone. “And you know you never get somebody by phone on the first try so you leave them a voice mail, and then you’ve got to go into some type of CRM system and record the disposition of all your contacts,” he says. “This is a big challenge, with no time to do it all, or at least do it well, without offloading some of your frontline employees’ other responsibilities so they have more time to sell.”
Many new members are unprofitable because they join the CU for a single product, Neill notes. The aim of onboarding is to expand the relationship in the first six months when new members are most likely to be interested in information about CU products and services.
Training frontline staff in sales techniques is a crucial component of onboarding, but most sales programs don’t provide systems to track and measure onboarding results, set performance expectations, hold staff accountable for meeting sales goals, and recognize top employees, all necessary components of ensuring high performance, Neill contends.
Put Technology to Work
Technology can definitely support and extend onboarding efforts. Employees who handle the initial interactions with members should be trained to cross-sell key products and services in those in-person conversations, but follow-up contacts and tracking can be automated.
“Our company places a high value and emphasis on cross-selling effectively at the initial point of sale. New member onboarding is also important. Both are crucial to ensure that a new member becomes profitable,” Neill notes.
“I’ve been talking about doing onboarding for 20 years, but back in the late 1980s and early ’90s, we had to keep written notes on each contact,” he adds. “Today, CRMs handle that, and core processing systems have cross-selling components. Technology allows us to be able to do some tasks in a more automated fashion, but we need to use it not only to follow up with new members but also to establish benchmarks and track efficacy.”
Automated systems can support onboarding in several ways, Yokley notes. Technology can be deployed to: identify new members in the system; trigger notifications and engagement vehicles such as short surveys on key dates; facilitate list management for contacts via other traditional channels, such as follow-up phone calls and mailed welcome packets; monitor members’ responses and channel preferences; and identify next-best product offers.
“We have customized alerts back to the CU in terms of any activity that they want to take action on. For instance, on a 30-day satisfaction survey, maybe a member indicates that he has some level of dissatisfaction,” he says. “We can immediately communicate to the CU that there is an issue and initiate a problem-resolution process.”
7 Key Strategies
Yokley offers these recommendations to optimize onboarding programs:
1. Put someone in charge. “It is really an ownership and accountability issue. Who is driving the onboarding program from an organizational perspective?” he asks. “Operations plays a role, and channel management plays a role. Technology, sales and marketing all play roles, but it may be that nobody is really responsible and accountable” for ensuring that everyone works together to execute the strategy.
Yokley is “agnostic” about which department or executive should lead the onboarding program, but someone needs to be responsible for developing and coordinating the effort across channels and ensuring that all new members—whether they join at a branch, by phone or online—are identified and included.
2. Support members’ decision to join your CU. In contrast to the days when consumers’ choices for financial services were limited to those providers within driving distance of home, they have nearly unlimited options today. After members open their first CU account, “they move into a post-purchase evaluation process to see if this institution is meeting or exceeding their expectations before they dive in and start to expand their relationship,” Yokley says.
By providing clear messages about how the CU can save new members time and money and providing convenient access to take advantage of those offers, the onboarding program confirms that they’ve made the right choice.
Rather than viewing onboarding as intrusive, many new members appreciate the outreach, he contends. Yokley cites a 2015 J.D. Power study of new retail banking consumers, which found that regular contact in the first six months enhanced satisfaction and cross-selling.
“Members are expecting you to reach out,” he adds. “They are excited about your organization and evaluating your service, and they want to hear from you along the way about how they can be doing business with you.”
3. Make it easy to do business and find information. The two most common complaints driving new member attrition are that it’s too difficult to execute transactions and too hard to find desired information. No two financial institutions provide services in exactly the same way, so every time consumers switch, they need to learn new processes, systems and product terms. Your onboarding interactions should steer new members to the information they want and channels that are as intuitive and easy to use as possible.
These interactions are useful throughout the first year of membership, but especially in the first four months after enrollment. Research from Harland Clarke, San Antonio, Texas, shows that about 75 percent of all product sales occur within the first 120 days of the relationship, so “there is a window of opportunity in terms of exceeding that new member’s expectations through that first post-purchase evaluation process and then being able to capture those additional products and services up front,” Yokley says.
4. Combine guidance, feedback and cross-selling. New members’ financial acumen and preferences vary, so your onboarding program should be designed to guide members to get comfortable enough with their initial product selection that they are accessing their new accounts regularly. It is also helpful to have systems in place to monitor how and how often members interact with your CU, to survey their initial satisfaction with those interactions and their interest in other products and services, and to tailor cross-selling offers.
5. Keep up your end of the conversation. “I think too many times credit unions feel like they don’t want to overcommunicate when the reality is that not every message is read and different members have different communication preferences,” Yokley says. “So make sure you are communicating as frequently as necessary.”
Although many new members may spend a lot of time on Facebook, Twitter and other social media, email remains a favorite communication channel for consumers, he notes. Still, CUs should be actively monitoring what members and others are saying about them across social media channels.
6. Make the most of member data. There is a wealth of information building in your CU’s core processing, lending, credit card and other systems to help differentiate member segments by demographics, product usage and transactional activity to better direct product offers to new members. Yokley recommends developing and executing a strategy to combine data from disparate systems to improve business intelligence and apply it to onboarding.
7. Measure the return on your onboarding investment. Key metrics include engagement with products and services among new members, as quantified by number and sources of interactions; new product and service enrollment; and responses to member satisfaction surveys and other requests for feedback.
