How many new members leave your credit union in the first 100 days?

This blog has been updated for 2020. New member acquisition costs and average attrition rates have changed some of the math involved, but the end result is largely the same.

Is your credit union looking for new member growth? Are Millennials and Gen Z key to your long-term viability? If you are like most credit unions, then this article will help you keep new members and build loyalty for life while demonstrating the tangible difference between a bank and a credit union.

We all know, it is far less expensive to keep a member you already have than to get a new one. We’re so focused on membership growth, yet we don’t even know if we’re attracting the right member… or if they’ll stick around!

Continue reading “How many new members leave your credit union in the first 100 days?”

One Way to Reduce New Member Churn at Your Credit Union

It can be hard to bring in new members to credit unions. And the reality is, that difficulty can be measured in dollars. Member acquisition costs can add up quickly.

So, it’s critical to keep new members once you get them. Unfortunately, there’s no secret formula to reducing new member churn.

Or is there?

Continue reading “One Way to Reduce New Member Churn at Your Credit Union”

Lead Scoring: Getting to Know Your Members

Lead scoring. You may have heard the term. Perhaps you’ve talked about it without knowing what it was even called. Fortunately, we’re here to bring you an introduction to lead scoring for credit unions.

Many credit unions measure the success of a marketing campaign solely with “home run” metrics. For example, we measure car loan promotions by the number of car loans booked. We judge credit card campaigns by the number of cards delivered.

While there is no question that win/loss metrics are important, there is a middle ground. Continue reading “Lead Scoring: Getting to Know Your Members”

Does Credit Union Content Marketing Work?

Content marketing is a kind of marketing strategy designed to attract and nurture inbound leads. It relies on maintaining a consistent and prominent online presence to show up in peoples’ internet searches. Can credit union content marketing work?

Few credit union marketing strategies are exactly alike. Each credit union fills a unique niche and appeals to particular local community. Each credit union offers something that other financial institutions near them don’t.

With quickly evolving technology and the popularity of online and mobile banking, traditional marketing avenues are changing as well. Content marketing can help credit unions reach prospective members who turn to the internet first to gather information about companies, products, and services that interest them.

Continue reading “Does Credit Union Content Marketing Work?”

Credit Union Member Growth

Credit union membership growth! How do you measure it? It seems like a simple question, just like “where can I get the best burger in town?” seems like a simple question. However, once different interpretations of what constitutes a new member—or a good burger come into play—things don’t stay so clear.

I have been on the Board of Directors at South Bay Credit Union for the last 11 years. At almost every board meeting, our COO delivers the monthly new member report. We seem to grow by a certain percentage each month, yet we have had roughly the same number of members for the last decade. How does that happen? Member attrition.

Understanding Credit Union Member Attrition

Member attrition is not a focal point of many credit unions. It certainly wasn’t for SBCU until just last year. I don’t know why I had that epiphany about focusing on attrition, but I did.

It forced us to focus on why members were leaving, which members were leaving, and where they were going. In my opinion, there are members whom we don’t mind leaving. Let that sink in for a minute…

Not all members are good members participating in the cooperative. Just like a team is only as strong as its weakest player, a cooperative is only as strong as its weakest link. Think of the Great Wall of China. It kept China safe for centuries until the gates were opened from the inside and the Mongols walked right into China and took over. The weak link was the open door in the hundreds of miles of brick wall.

Armed with the data on which members we were losing, why we were losing them, and where they were going, we were able to address a growth strategy in a tactical manner. Intuition is great, but data is factual. Using data, we were able to “farm” our existing members and cultivate those members to be our most profitable and highest participating members.

Knowing why members leave and which ones you want to keep allows you to fix the reasons why those members leave. The first step in membe

r growth is to stop the bleeding. You can add 50 new members per day, but if you’re losing 50 per day as well, you’ll never grow.

Credit Union Size vs Member Growth

Now that we have fixed the leak in membership, it is time to start adding net new members. Take a look at this study from NCUA. Can you explain to me why the larger the credit union, the greater the new member growth?

credit union member growth

My guess is that the larger credit unions grow because of their ability to spend on advertising. TV, radio, print, online, etc. are all things smaller credit unions struggle to do at scale.

However, that is changing daily. We are moving from a one-to-many toward a one-to-one marketing environment. Tailoring the message to the individual potential member you are targeting is a much more cost-effective way of doing this.

Credit Union Member Growth via Smarter Advertisement

One-to-many marketing does work. It’s inefficient, but it does work. One-to-one marketing works better, though. If you know who you’re marketing to, you can ensure that you and your prospect are well-suited to one another.

To put it in terms you might be more familiar with, think of it as the RFP process. If I run a core provider or mobile banking provider, I probably get 50 or so RFP’s to complete each month. Some vendors will complete all 50 and hope for the best. If they complete all 50, they will likely get included in 25 searches, do 10 demos, and get 5 new clients. The more efficient vendors will evaluate all 50, score the potential for winning by developing an ideal prospect persona, reply to those 25 that fit their ideal client profile, do 20 demos and get 10 clients. Double the clients, half the work, a pretty good model.

New member acquisition is the same. You can advertise to thousands with your generic message, onboard as many as you can, and then have 40% of them leave because they are not a fit for your credit union (they are not your ideal member). Or, you can use technology to find the potential members that fit your ideal member persona, target them specifically, and onboard the same number of new members who will not leave. And you can do that for half the cost.

The first step is identifying your ideal member or persona, which you will have already done while examining member attrition. Then, find the right partner to help you put your message in front of them at the right time in the right context.

There are several examples of this being done and CU 2.0 would be happy to help you. Contact us here.

And, for the record, the best burger in town is from In-N-Out.