The Ultimate Metric for Credit Unions

In 2013, credit union membership grew to over 96 million, up almost 3% from 2012. To continue this growth and retain members, credit unions need to look critically at their Member Effort Score (MES), a valuable indicator for predicting member activity and improving loyalty.

Today, credit unions and other financial institutions have their pick of data points to choose from when evaluating members and prospects, but few offer the predictive intelligence and tactical actionability of MES. Unlike the Net Promoter Score (NPS) or traditional customer satisfaction (CSAT) metrics, MES evaluates members’ overall ease of performing various key tasks on an omnichannel basis, which means through contact center (both live agent and IVR), digital (public website, member portal and social media) and branch interactions.

Often simple questions can be the most revealing. When asked “What is it like for members to interact with your credit union?”, many credit union employees reply with anecdotes, outdated web survey results or siloed call center logs, essentially stitching together an answer until they admit they aren’t sure. In an increasingly consumer-driven marketplace, and with much hype given to “the customer being king,” it is surprising how many credit unions not only lack current state perspective, but also a prioritized plan on how to improve their members’ experience.

This predicament often stems from credit unions being unsure of how to (1) simply and quantifiably measure the member experience and (2) evaluate the multi-channel member experience without spending months doing so. Research has shown the value of a more effortless member experience: increased spending and greater probability of repurchase. Fortunately, there is a valuable metric that quantifies the member experience based upon one measure (effort), and can be used to design a program that allows credit unions to get actionable insights: the MES.

Effort Assessment

Specifically designed for credit unions, MES examines the degree of consumer effort required to complete 30 tasks across nine dimensions – where less effort is preferred. Some of these include Key Task Usability and Customer Orientation on the public website; Information Availability and Account Setting for the customer portal/online banking; and Information Availability, Layout and Design, and Cross-Channel Interactions for branches.

Scored on a scale of one (low effort) to five (high effort), MES can be done initially using an outside-in “mystery shopper” approach to perform the assessment. However, it can then subsequently be done via effort-related questions in a member-facing survey tool. Generally, the scores are then aggregated up to four uber-categories: Branch Banking Effort, Customer Assistance Effort, Website Effort, and Online Banking Effort. This also allows for further granularity to benchmark leading and lagging practices in each category.

Based on foundational research from the Corporate Executive Board Co., effort scoring has proven to be much more indicative of customer loyalty – both the predictive power for repurchase and increased spend – than both NPS or CSAT indices. Because it allows leaders to drill down on the areas of highest effort, MES enables credit unions to decide how and where to best allocate resources to make improvements to the customer experience. In addition, benchmarking a credit union’s MES with that of its peers can help determine how far a firm needs to improve to stand out among competitors.

Not all credit unions can provide the ‘wow’ experience, but most firms do not need to. MES is based upon research that argues that firms create loyal customers primarily by reducing effort and making it easier to do business – not by “wowing” the customer or over-delighting them during service interactions. On the “Hierarchy of Customer Needs,” effortless experiences and ease with which to do business make up the middle ground – prioritized above effectiveness at meeting core needs but below the “wow” experiences.

MES can also be used to understand the perceptions and behaviors that impact a credit union’s key outcomes, including its bottom line. By helping to drive results such as improved sales and reduced churn, minimizing member effort also has a quantifiable link to increasing Member Lifetime Value and overall firm profitability.

Credit unions should critically examine MES as another key customer metric and a proven indicator for improving member loyalty. Since MES evaluates members’ overall ease of performing various tasks across touch-points, it offers highly actionable insights, not just vanity data. MES can also be used to understand the levers that impact both positive and negative outcomes, such as sales and member churn.

It’s been a healthy couple of years for credit unions in terms of membership. In order to maintain this momentum, institutions need to keep a watchful eye on their member experience – and the data that could help improve it.

Mr. Nash is a director in the Customer Experience practice and Mr. Hartman a director in the Banking practice of Chicago-based West Monroe Partners . They can be reached at [email protected] and [email protected] respectively.