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

first 100 days credit union onboarding

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!

New Member Cost vs. Profitability

How many members leave your credit union in the first 100 days? Well, your credit union may be different, but on average, there are a few trends to observe.

Let’s start with the basics: of all new members, almost a third of them close their account in the first 100 days. 40% will leave before their account has become profitable!

Let’s do some quick math to illustrate. If you add 1,000 members a year, your credit union is probably spending 1,000 x $350, or $350,000 to bring new members in the door. If 25% of them leave, you’ve wasted $105,000. That’s a huge amount going right out the door.

Or, if you don’t factor labor and technology expense into member acquisition cost, you’re still looking at about $200 per member. 1,000 x $200 is $200,000

If you can use a small portion of that money and reinvest it in your new members. If you spent 15% more, but retained 15% accounts, you’ll have an instant ROI on those marketing dollars sent (and a better member experience!). Most importantly, if you plan the first 100 days of that member’s experience, you’re going to have a loyal fan who will talk about your credit union to every family member and acquaintance they have.

How to Reinvest In Member Onboarding

So, where should you spend that “saved” money? It shouldn’t be relegated to the early onboarding phase. Rather, it should cover the entire first 100 days so that you’re keep them close during that critical time. Think about how you can help them explore their options at your credit union.

Why is that? On a personal level, I’ve joined probably 10 different credit unions. And I’ll tell you: all credit unions do the usual things. They welcome me, open my account, give me a new account brochure of some sort, send me checks in the mail, and then… crickets.

I cease to hear from them altogether. Not, “Hey, Kirk, we’re glad to have you, we’d like some more business from you.” Or “Hey, Kirk, would you like to open another account?” Or, “Hey, Kirk, would you like to know how to log on to online banking?” Crickets. This is from $100 million, $500 million and $1B+ sized credit unions. It’s not relegated to only the largest and smallest of us. It’s a plague across our industry.

How to Reduce New Member Churn

Doing this is not that hard: there are a lot of places to borrow ideas. Zappo’s and REI are classic examples. Joey Coleman, the founder of First 100 Days, has some great tips, some of which I’ll summarize:

First, how do you change it? You want to plan out what’s going to happen to new members each week. They join on day 1. Say, week 2 you’re going to trust them a little bit more so you get them their ATM card. Week 3 you’re going to increase their limit. Next week, enroll them in eStatements… Whatever it is, you’re going to have some sort of plan for onboarding members throughout the first 100 days.

Secondly, in that onboarding process, always underpromise and overdeliver. For example, tell a new member it will take a week to get their credit card, and then FedEx it to them the next day. Or let’s say their new checking account comes with 3 free foreign ATM transactions per month. What if, when they get their new member account, you say, “Hey, we’re so excited to have you, we gave you 4 or 5 free ATM transactions per month too.”

Thirdly, you want to communicate on as many channels as you can. Does your member want a text message, email, direct mail, phone call, or an in-person consultation? Everybody’s different. Within the first week or two, to send that member an email, text message, phone call, video clip, postcard, direct mail, and a personal letter in some way, shape, or form.

All 6 of those need to be well-orchestrated and interact with your member, because if you’re able to do that: A) you’re getting 6 impressions in the process, and you’re hitting across all those channels, and B) if you’ve got your marketing automation and analytics set up, you’re also going to figure out which the member uses, which becomes really useful info as you run your digital marketing campaigns. You’ll know what the best avenues are to communicate with that particular member, and how to highly personalize all of your future communication.

Fourthly, consider sending some sort of gift. Including some kind of tangible benefit is a nice touch. What can you offer your member that they will truly enjoy? Don’t give them something they’d just as soon throw away. Treat them to an experience, like a gift card to a local coffee shop. Giving creative onboarding gifts provides a great opportunity to send a personalized message, too. (And it doesn’t take any time to record those and have a library of them ready to go.)

Fifthly, have a conversation with your member. Ask them questions. For example, “How do you like to bank?” Do they prefer self-service? Digital only? Branches and in-person smiles? Create personas for how different members prefer to bank and create experiences to satisfy each.

Another example involves understanding your competitors. If your new member is used to other financial institutions’ $500 ATM limit and your credit union by default does $400, and you find that out in the account opening process, you can very quickly go and up their ATM limit. Every time you can eliminate those little things in that experience for your member, they’re going to have a better memory of you. And the reality is, that’s table stakes in this day and age. So incorporating that dialogue and feedback in the process is key as well.

What You Need for Better Onboarding

The best way to guide your members through their first 100 days is to set the process on autopilot. We recommend something like a marketing automation platform to keep things on track. As a bonus, marketing automation ensures behavior-based actions, so you can tailor their experience to fit their engagement.

You can learn more about CU 2.0’s credit union marketing automation here.

So in summary, that first 100 days is your opportunity to make a great impression. You can really improve your ROI, ask for more business, create a great digital experience, and get that member to be a loyal fan right out of the gate by spending a little time on that first 100 days.

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