Why Less Is More

The idea of having your credit union serve everyone sounds great, but unfortunately it doesn't work.

Businessman chooses a select group.

“A friend to everyone is a friend to none.” – Aristotle

This quote always makes me uncomfortable, because even though intellectually I know it’s true, my emotional side thinks, “Maybe, if I just tried harder – then I could be friends with everyone.”

This idea that we could be friends with everyone, though unrealistic, is deeply appealing. Not only is it compelling personally – it sounds good for our credit unions as well. The idea – that if we could just serve everyone then our credit union would grow exponentially – sounds great but unfortunately doesn’t actually work.

Why not?

Growth is driven by the clear promise of value. And value, defined as what people care about, is not a one-size-fits-all proposition – it can vary dramatically based on member profile. Filene has numerous studies that explore best practices for driving long-term member growth, so although you can’t effectively serve everyone, there are strategies that have been proven to work.

Our research shows high performing credit unions typically exhibit the following traits:

1. A clearly defined strategy that openly acknowledges that some consumers are not in their target market. Instead of trying to be everything to everybody, they clearly define their target member base and build their offerings with that audience specifically in mind.

2. Selectively targeting members for whom you can over perform – Focusing on a narrow group of target members strengthens financial performance. A targeted member base allows an organization to minimize opportunity costs. What does that mean? As a leader you can prioritize your resources to provide solutions in the areas your member base values, while deliberately choosing not to spend money in areas that are less important to the target audience. When you have a broad audience, it’s harder to make those choices because everyone cares about something different. When you aren’t able to make trade-offs, you create average products without meaningful differentiation from competitors.

3. Creating multiple channels for member feedback increases transparency and allows members to feel heard and appreciated. Several metrics including Net Promoter Score, satisfaction surveys and member effort scores can be used to measure and monitor member experience.

Successful organizations ensure that the information is not only collected but actually used to improve products and services. It is important to close the loop and report back to your members about how you are using the information they have provided. Acknowledging how member input impacts the evolution of products and services is a powerful way to create engagement and stimulates additional insights.

4. Focus on digital engagement. Credit unions that are growing rapidly, by and large, are focused on the digital engagement of their members. Members like self-service technologies, but we find credit unions struggle to do it well. One of the areas that deserves deeper attention is creating smooth transitions between channels. As people move from self-service to in-person service, it’s important that their experience is consistent while the strengths of each channel are optimized. In both cases, ease of use is critical, but while in-person experiences should emphasize empathy, a service mindset and empowered team members who solve member problems creatively, online experiences should maximize the member’s ability to conduct transactions efficiently and minimize complexity.

5. Operational transparency that gives members insight into back-end processes in a way that shows what work is being done on their behalf. Creating more transparency allows members to see the value provided and is linked to increased member satisfaction. A simple example of this is sharing a status tracker for a mortgage loan application. Sharing the steps for approval and which stage the loan is in throughout the process reduces anxiety for the member while outlining all of the steps that need to occur for approval.

Ultimately, whether personally or professionally, we are constantly making decisions about who to spend time with and what qualities matter. Members are also making those same decisions. So, while it sounds nice to try and be everything to everyone, we know that the result is an average experience that no one is really excited about. The opportunity to be deliberate by clearly identifying a market that has unique interests and needs, and aligning your credit union to capture and address their challenges, results in raving fans and deep relationships.

Here are some quick questions you can ask to track your performance:

If you aren’t answering yes to the questions above, but want more information on best practices, you can read Filene’s curated collection of research related to credit union growth trends and strategies at filene.org/481. Our research all adds up to identify, confirm and demonstrate that regardless of size, credit unions can achieve sustainable, organic growth by defining a value proposition that fits members’ needs. The best action you can then take is to decide where you want your organization to shine – and to put systems into place that allow this focus to guide strategy and business plans. This means knowing where to say “no,” and it proves that less can be more when that enables you to go all-in on your value proposition.

Christie Kimbell

Christie Kimbell is Chief Experience Officer for Filene Research Institute. She can be reached at 608-661-3764 or christiek@filene.org.