Discover how to provide personalized financial advice and innovative services to drive loyalty, advocacy, and financial success.
Traditionally, credit unions have attracted and retained banking customers through member-focused service strategies. These strategies frequently offer better interest rates and lower fees than larger, corporate financial institutions.
However, in more austere economic conditions, credit unions often struggle to compete with banks for market share. For example, Q4 2023 showed a decline in credit union assets (by 1.5%) and deposits (by 3%). To boost member engagement, credit unions need more diverse strategies to retain and grow their ranks.
Even though smaller credit unions are unlikely to compete with larger financial institutions at the bottom line, there are other areas where inroads to greater market share and member engagement are possible. For example, 80% of credit union members would like more personally tailored financial advice and 21% would consider changing membership to receive more innovative, personalized services. With a focus on opportunities for personalization and enhanced digital experiences, this guide covers proven strategies for credit unions to drive member engagement and reap the benefits of loyalty, advocacy, and financial performance.
Personalized communication — as enabled by new technologies — can help drive member engagement in several useful ways. Here are three essential ways you can use personalized communication:
The first step is to understand the unique needs and preferences of each member. By engaging in regular surveys and feedback sessions, credit unions gather insights into what services and unique preferences their members value the most. This understanding of the member’s experience forms the foundation for more personalized interactions and services.
According to recent research, 68% of consumers are willing to share personal data in exchange for personalized loyalty experiences, if it is explained to them why the data is being collected. Like all financial institutions, credit unions systematically collect data on member activities and preferences. This can include tracking transaction histories, monitoring online interactions, and noting service inquiries.
With tools like customer relationship management (CRM) software, companies can turn this customer data into user profiles that are consistent across all points of contact.
With the collected data, credit unions can tailor their communications to meet member expectations. Personalized emails and messages significantly improve engagement rates. Personalized emails have been shown to boost open rates by 2.7 times. Additionally, personalized text messages based on customer journeys can lead to six times more conversions. By sending relevant and timely information in personalized formats, credit unions can enhance member satisfaction and loyalty.
Across industries, enhancing customers’ digital experiences continues to stand out as an effective way to retain and grow loyal customer bases. These three areas of focus can significantly benefit credit unions:
Today’s customers have become increasingly accustomed to quick, intuitive interfaces to handle inquiries and transactions. For credit unions, a seamless application interface with user-friendly navigation helps members easily access the services they need. According to recent statistics, 63% of customers have now come to expect instant, personalized engagement as a standard of service. This expectation extends to digital platforms, where ease of use significantly impacts member retention and satisfaction.
Research shows that 77% of consumers have chosen, recommended, or paid more for a brand that offers more seamless services or experiences. Giving customers a hassle-free online banking experience is an effective way to drive engagement through targeted response to customer preferences. For credit unions, this means offering websites and apps with:
A well-designed online banking system can differentiate credit unions from larger financial institutions by providing a more personalized and efficient customer experience.
Mobile app features are key drivers of member engagement. Credit unions should focus on incorporating functionalities such as real-time notifications, mobile check deposits, and personalized financial advice. Members are increasingly relying on mobile apps for their banking needs, and offering a comprehensive suite of features can significantly enhance their overall experience.
Many credit unions take an active role in fostering community involvement through various initiatives and programs that build customer loyalty and satisfaction.
Credit unions have an established tradition of supporting local communities. Just to pick a notable example, All In Credit Union awarded $453,613 in grants to 26 local charities in 2023. Such initiatives both address immediate community needs and help build long-term relationships with members and local organizations.
Hosting and sponsoring community events is another effective way credit unions can engage with their local communities. Events such as fundraisers, educational workshops, and local festivals provide opportunities for members to connect and engage with each other. Sponsorships of local sports teams and cultural events also enhance the credit union's visibility and demonstrate their commitment to community development.
Credit unions often encourage their members to volunteer for community service activities. This involvement benefits the community and tends to foster a sense of shared ownership among members. During the same time that All In Credit Union awarded grants in 2023, 389 employees also volunteered 5,603 hours to support 159 different community organizations. By promoting volunteerism, credit unions help build stronger, more resilient communities and give their members reasons to stay beyond the bottom-line cost of financial services.
Credit unions can also enhance member engagement by designing rewards and loyalty programs with tangible benefits designed for specific customer bases. Programs should focus on offering meaningful rewards that address members' needs and preferences. For different kinds of credit unions, these rewards might include:
Additionally, effective rewards programs often include incentives such as cashback, discounts, and special rates. Cashback rewards on purchases allow members to save money on everyday expenses, while discounts on loan interest rates and service fees provide additional financial relief. Special rates on savings accounts or certificates of deposit can also attract and retain members by offering higher returns on their investments.
Credit unions can foster stronger relationships with their members through educational initiatives.
Financial literacy sessions can cover essential topics such as understanding credit scores, managing debt, and navigating financial products. By empowering members with knowledge, credit unions help them make informed financial decisions.
Providing workshops on investment strategies attracts current and prospective members interested in growing their wealth. These sessions can explain the basics of stocks, bonds, mutual funds, and retirement accounts, as well as offer insights into market trends and risk management.
Teaching members how to create and maintain a budget is another effective way to support financial health. Budgeting workshops can guide members through setting financial goals, tracking expenses, and developing saving strategies. By offering practical tools and resources, credit unions can assist members in achieving financial stability and success.
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