At the heart of member-centricity is the concept of the member value equation. The Harvard business professors that developed the service-profit chain theory state that “this equation suggests that the value of goods and services delivered to a member is equivalent to the results created for them as well as the quality of the processes used to deliver the results, all in relation to the price of a service to the member.”

It should be no secret to anyone in the credit union industry that money is a commodity, as are a majority of the related financial products they provide. As margins narrow and competition becomes more intense, market conditions are driving more organizations to focus on and become more member-centric.

When one is in a commodity-driven business, with many competitors, it is necessary to differentiate one's self from the competition in order to remain viable and grow. Forward thinking organizations are quickly transitioning from being product-centric to becoming truly member-centric organizations.

Organizations are rapidly realizing that the common denominator between product or service delivery and increased income (net worth growth) is the member. Because of this, many organizations are redesigning their current business strategies around the member-centric philosophy.

Intelligent, visionary credit unions, too, are recognizing that just like their employees, facilities or cash, their members are valuable assets that should be actively managed accordingly. Not only do members generate revenue for credit unions, what they say and how they feel can influence future revenues of the institution.

Member-centric organizations proactively and constantly listen to their members and react accordingly. They view their business strategy from the point of view of the member, and thus reduce expenditures on unwanted processes, and at the same time create new business opportunities as a result of acting on member feedback.

This requires the ability to analyze every business function within the organization, not only relying on member surveys or direct member feedback.

For example, an organization should analyze the penetration rate on the last few specials they advertised to gauge the effectiveness of the initiative. Also, before initiating a new product or service, an organization should assess whether or not members desire the product or service through hard data and not just hyperbole assumption.

Becoming a member-centric organization means more than just saying that this is what will happen. It requires a paradigm shift, and an entirely new business strategy that is centered on the member at all times.

In their quests to become member-centric, organizations must consider that it is not enough just to take care of the member today, they must think beyond today and plan for what the member will desire tomorrow.

Successful organizations will do more than just meet members' stated needs. They will become proficient at accurately anticipating members' unarticulated needs and desires far into the future.

At the heart of becoming a true member-centric organization is the ability to create value for the member whenever they come into contact with the organization.

According to Frederick Reichheld, a noted business consultant, “what drives this new model is not profit but the creation of value for the member, a process that lies at the core of all successful enterprises. Value creation generates the energy that holds these businesses together, and their very existence depends on it.”

Member acquisition in today's economic environment is hard enough. It is important to create member loyalty in existing members, and be able to consistently deliver on the promise of a member-centric experience to potential new members.

Organizations need to honestly consider whether they will advertise themselves as lowest cost, highest quality, or having the best service available. In a commodity driven business like financial services, the answer is very obvious. Therefore, in order to deliver on the promise of delivering the best service possible, organizations must be driven to the concept of member-centricity.

Organizations that adopt the member-centric philosophy not only operate and think differently, they also ask questions differently. Their values, mission, and organizational structures exist for the member, not the management or employees of the organization. The bottom line is that a member-centric organization is truly owned and operated for its member owners!

Anthony L. Emerson is president and CEO of the Credit Union League of Connecticut.