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Credit Union Member Loyalty Evident in Recent Survey

Credit Union Member Loyalty Evident in Recent Survey By Gina Ragusa
Published June 4, 2012
Credit Unions Online
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How willing are you to forgive your credit card issuer for making a gross financial error on your credit card statement?

According to the 2012 annual Temkin Forgiveness Ratings report, most consumers say, “Not so much.”

Topping the list of the least forgiven companies this year are the credit card issuers with most forgiven being grocery store chains and retailers.

The group’s annual survey takes the temperature of the average consumer’s tolerance for error generated from commonly visited companies such as credit card issuers, banks, retailers, restaurants, and airlines. This year’s survey tapped into how consumers felt about approximately 206 businesses, from 18 different industries, based on how willing customers were to forgive for an error.

Among the recipients of the unforgiven included big banks like Citigroup, HSBC, U.S. Bank, and Bank of America. And while banks seemed to rate as being on the low end of forgive-ability, credit unions and one bank, USAA came out smelling like a rose.

Why credit unions? In light of overall distaste for credit card issuers, perhaps consumers prefer credit unions because of the industry’s 18% cap on loan rates or the personal, one-on-one service consumers typically don’t receive when they call their credit card company. USAA Bank may have fallen into the warm, fuzzy (credit union worthy) category due to its dedication to military members and lower than industry average credit card rates.

Although compared to last year’s Temkin Forgiveness Ratings report shows that consumers are feeling a little more forgiving than last year, people continue to show loyalty to those who interact and handle their customer’s business and money with care and respect.

Credit Unions Weigh In

“At Heritage Federal Credit Union, if a mistake is made we reach out to the member immediately, remedy the situation and explain what transpired and how we hope to correct the situation from happening again in the future,” explains Steve Bugg, Chief Marketing and Member Service Officer at Heritage Federal Credit Union ($407 million, Newburgh, IN). “What we have found is that the member-owners of Heritage Federal Credit Union really feel that they belong to the credit union and since we stake ourselves on being ‘Seriously Different, Seriously’ they know we strive to get to know them as individuals and not just a number. Many state that the banks see them as a number and not as a person.”

Another reason why credit unions may have come out on top is because of their resolve for full disclosure. After news reports of numerous banks sneaking extra fees into accounts, credit union transparency is contributing toward building loyalty.

“Typically members are quicker to forgive because we are transparent and act expeditiously,” says Melva McKay-Bass, SVP, Member Service Operations at Suncoast Schools Federal Credit Union ($5 billion, Tampa, FL). “We are sincerely committed to improving the lives of our members, which means sometimes giving up personal time for the sake of our mission. Because of this, members are not just forgiving but they become even more passionate about the credit union because they know we are committed.”

Bugg refers to a recent Raddon RFG Loyalty Index survey that pointed directly to how members will stand by their credit union. “Since our members seem to be very loyal they know that Heritage Federal Credit Union has their best interest in mind and would work through any potential issues that may arise.” He says that the Raddon RFG Loyalty Index for 2011 placed Heritage Federal Credit Union in the 96th percentile at a rating of 95.

Loyalty may also stem from overall engagement. According to Raddon's 2011 Annual Membership Survey, Heritage Federal placed in the 93rd percentile for "devoted members" as a key measurement for determining how engaged members are, Bugg adds.

“Raddon has found, as has Heritage Federal Credit Union has, that engaged members are more open to providing us with constructive feedback and they give Heritage Federal Credit Union an opportunity to rectify issues before leaving the credit union.” Bugg adds that his credit union also ranks in the 89th percentile for engagement as it relates to employees being advocates for our members.

McKay-Bass recalls a recent instance where employee to member engagement and going the extra mile preserved a relationship.

“We most recently assisted a member who was having difficulties accessing his accounts online after hours on a holiday weekend,” she recalls. “The member wrote to us on Facebook expressing anxiety and seeking help knowing that he was facing a holiday weekend but was in need of cash. Our team contacted him immediately so that he would know that we were working to find out what the issues were. Once we confirmed with him what the situation was, together we went to work off hours and on a holiday weekend to handle it.”

Credit Unions Take It Personally

Often big banks may shrug off increasing fees and decreasing service as the cost of doing business. Although credit unions understand the basic tenets of business, attitudes about the member-credit union connection are completely different.

“Suncoast Schools Federal Credit Union exists to improve the lives of its members; where as big banks focus on profit,” McKay-Bass says. “Members are forgiving because they are loyal to the mission and identify with the mission in a way that profit-driven institutions don’t offer.”

“Establishing these emotional bonds with our members is critical to maintaining retention and service quality levels,” Bugg observes.

Bugg says that bond establishment is also derived through ongoing surveys and open communication with high-level executives.

“We seek ongoing feedback from our members through the following sources at Heritage Federal Credit Union; direct feedback to our President / CEO via the credit union website in a section called ‘Ask the Expert’, through our online banking / website portals that allow members to email the credit union, through our information center (call center), via our employees / board, by completing the Raddon Annual Membership Survey with an open comment section, through our third party vendor Mystery Shop program and via our third party vendor transactional survey program with an opportunity to write in comments.”

Bugg adds that the credit union’s President and CEO also takes calls via a twice monthly TV program called "Ask the Expert" that airs on the local NBC affiliate WFIE Channel 14 on their mid-day program with anchor Mike Blake.

“All of these communication channels have opened up honest and ongoing feedback between the member-owners of the credit union and our team members. We take member-owner comments very seriously at Heritage Federal Credit Union and have improved many procedures and policies based on member feedback. In addition, the credit union has improved our product and service offerings based on direct member-owner feedback on the products and services that they desire and help them make better financial choices.”

Overall, McKay-Bass says that competitive pricing and personal service helps with retention. “Credit unions offer lower fees, lower interest rates when borrowing and higher interest rates when investing, and some would argue that they are more personal,” she adds.

Has your bank or credit card issuer tripped up one time too many? Time to “just say no” to big bank fees and gimmicks and find a credit union.

 

Resources:
http://www.temkinratings.com/wp-content/themes/Temkin/assets/pdf/2012TemkinExperienceRatingsOverview_v1.pdf
http://experiencematters.wordpress.com/2012/04/17/2012-temkin-forgiveness-ratings/
http://www.cardratings.com/usaa-amex-discover-top-temkin-forgiveness-ratings-for-credit-card-issuers.html

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