‘Satisfaction is Worthless, Loyalty is Priceless’
Member loyalty won’t come until your CU far exceeds member satisfaction.
Member satisfaction is worthless, but member loyalty is priceless, Neil Goldman, CEO of Goldman Consulting and Strategy, said Monday afternoon.
“You don’t achieve member loyalty until your credit union far exceeds member satisfaction,” says Goldman. “Satisfaction helps your credit union play defense, but loyalty helps your credit union play offense. Defensive strategies prevent your credit union from shrinking too much during times of adversity, but offensive strategies help your credit union grow during times of prosperity. You need high member-loyalty levels to grow.”
Goldman is a proponent of the Net Promoter Score (NPS) for measuring member loyalty. This research technique categorizes members into “detractors,” “passives,” and “promoters.”
If your credit union has 10% detractors, 10% passives, and 80% promoters, your NPS is 70 (throw out the passives and subtract the detractors from the promoters for your NPS).
“The NPS is kind of like the Fahrenheit temperature gauge,” says Goldman. “If you score 32 or below, your credit union is frozen and dead. If you score in the 50s or 60s, your credit union is tepid and growth will be a struggle. But if you score in the 70s and 80s, your credit union will grow and thrive.”
To ensure growth in the future, Goldman says credit unions must practice operational efficiency, product leadership or distinction, and member intimacy or loyalty.