As the world emerges from the Great Recession, credit unions have a unique opportunity to grow wallet share, deepen member relationships, and drive growth in demand deposit accounts by keeping current members satisfied and loyal.
Regardless of the economic times, attracting new members is more expensive than increasing revenues from current members, says Ben Colvin, global practice leader for MasterCard Advisors.
He advises taking the following steps to retain valued members:
• Employ models to monitor changes in spending behavior, drops in point-of-sale transactions, or increases in outflow balances to detect early indicators of attrition and take preventive measures.
• Form a quality assurance team to identify issues and anomalies in member relationship management procedures and policies.
Empower this team to make recommendations to senior management and stakeholders across the organization.
• Create a specialized retention unit to manage disputes and service problems.
• Score and offer overdraft lines of credit to members who experience frequent overdraft fees, or include an application for an overdraft line of credit in overdraft notices.
• Provide members using other financial institutions’ ATMs with the locations of your machines.
“Addressing attrition risk doesn’t have to be complex, and not all of these strategies have to be executed to meet with success,” Colvin says. “Even if you can put into effect only one of these strategies, such as a specialized retention unit trained to manage disputes, you could see a 25% improvement in retaining members at risk of closing their accounts. Typically, the primary reason members close their deposit relationship, other than moving outside the branch footprint, is due to a member service issue or pricing.”