In an industry where products and services are almost indistinguishable, financial institutions must differentiate themselves by offering superior service and exceptional customer engagement. How members engage with the institution is crucial in establishing a relationship. Credit unions must ensure that their customers have frictionless experiences that are easy, fast, consistent, convenient, and seamless. According to a study by the Member Loyalty Group, credit unions with higher member engagement levels reported a 10% increase in revenue growth and a 19% increase in loan growth compared to those with lower engagement levels. Download the Full Article

A Growing Focus on Member Engagement

  Customer engagement is not a short-term process; it takes months and years. Building trust and quality customer relationships are foundational for banks and credit unions, and active customer engagement is crucial to achieving this. Engaged customers are generally more satisfied and emotionally invested in the institution, making them more likely to share their positive experiences with family and friends. It can determine whether the institution becomes the customer’s primary financial institution. Good customer engagement leads to more profitable business and increased customer retention. On the other hand, poor customer engagement results in lower trust and weaker relationships, putting customer loyalty at risk.   A few trends that validate the importance of member engagement are:

1. Fewer customers are sticking to a single primary financial institution for their banking needs. With the rise of online and mobile banking, there are more options for customers to choose from. Customers unsatisfied with the service or experience they receive from their primary bank may be more likely to switch to a different institution.

• The COVID pandemic has spurred a revolution in our work, enabling people to work from anywhere and breaking down geographical barriers. Allowing them to bank fee-free is essential.

From Engagement to Advocacy

  Recent research has shown that engaged members spend 22% more than non-engaged members. Moreover, 43% of members reportedly do not renew their membership due to lacking engagement with their credit union. This percentage has increased from 37% in 2018, emphasizing engagement’s critical role in retaining members in today’s environment. Delivering excellent customer service is a vital aspect of building customer loyalty and is essential for the success of any business. To achieve this, firms must provide personalized and value-added experiences to their customers. Furthermore, in the event of negative customer experiences, it is crucial to transform them into positive outcomes to create brand advocates. This approach can help build strong emotional connections with customers, increasing engagement and customer loyalty. Customers tend to become more engaged when a positive customer experience is delivered. Highly engaged customers are more likely to purchase more frequently and advocate for the brand by referring to their friends and family, leaving positive reviews, and remaining loyal. Prioritizing the customer experience is crucial for building a community of loyal customers, and it should be a core focus of any business looking to succeed in the long run.

Strategies to Enhance Customer Engagement

  To provide a truly differentiated customer service experience, organizations must first understand their customer’s needs and preferences. They can then leverage appropriate technology solutions to reimagine and enhance the overall customer service experience. You can coax customer engagement with a few solid strategies up your sleeve. Here are some proven techniques: Comprehensive member engagement strategy: Engage your members with a comprehensive approach that involves regular communication with members, ongoing member feedback, offering financial wellness advice, and opportunities for members to participate in decision-making. Empower staff to be digital advocates: Enable your team to become digital advocates. It is crucial to building adoption among digital laggards. Many digitally savvy customers already use digital tools, so your focus should be encouraging those less comfortable with technology to try them out. Your staff is critical in building awareness of digital tools and improving customer confidence and adoption. By empowering your team to become digital advocates, you can ensure that your customers get the most out of your digital offerings and improve their overall experience with your institution. Use technology to enhance member engagement: Technology has revolutionized the financial industry, and credit unions must leverage technology to engage their members effectively. Provide online banking and mobile apps allowing members to access their accounts and perform transactions from anywhere, anytime. Additionally, use technology to send personalized messages and alerts to your members based on their financial needs and behavior. Introduce an opti-channel model: Optimize how you service your customers across all channels. It allows consumers to navigate their experience and opt into channels that best meet their needs and preferences. Cross-Selling and Up-Selling: Cross-selling and up-selling can help banks and credit unions increase revenue without incurring additional costs. Banks and credit unions can improve customer engagement and increase revenue by identifying customer needs and offering targeted products and services. Reward member loyalty: Rewarding member loyalty is another way to keep your members engaged. Credit unions can offer loyalty programs that reward members for using multiple products and services or maintaining high balances. Credit unions can also offer exclusive discounts and promotions to members to show appreciation for their loyalty.

Embrace Digital and Transform Member Engagement

  Digitization has become an integral part of the banking industry, and its role in improving member engagement is significant. Today, businesses have access to vast amounts of customer data, and leveraging that data is crucial for improving customer engagement. Emerging technology such as  AI and ML has been immense across various industries, transforming customer experiences through AI-powered chatbots and authentication systems. These tools can provide a competitive edge by revolutionizing how financial institutions and customers interact, increasing approval volumes, streamlining service requests, enhancing fraud detection capabilities, and more. Put your data to work: Enhance engagement through customer segmentation & data analytics. Personalization and customer data analytics are powerful tools businesses can use to create unique and engaging customer experiences based on their preferences, behaviors, and interests. This approach involves analyzing vast amounts of customer data in real-time, where AI algorithms come into play. With the ability to process customer data and identify patterns, these algorithms enable companies to provide personalized product recommendations, customized marketing messages, and even customized pricing. By analyzing member behavior, transaction history, and demographic data, banks, and credit unions can better understand their members’ needs and preferences and tailor their products and services accordingly. Conversational customer engagement: Engagement reduces customer response time and helps businesses build stronger customer relationships, fostering greater loyalty and advocacy. AI-powered chatbots and virtual assistants can provide personalized assistance to customers 24/7, answering questions, resolving issues, and providing recommendations based on individual preferences. Chatbots and virtual assistants use natural language processing and machine learning to provide personalized and timely responses to members’ inquiries and engage with them in various activities. Omnichannel engagement: Digital technologies are a significant enabler for Omnichannel engagement. It can significantly improve member engagement by providing seamless and consistent experiences across all channels, including web, mobile, social media, email, and phone. As a result,  organizations can provide their members with easy access to services, personalized communication, and faster response times. The ability to track and analyze member interactions across channels also helps organizations gain insights into member behavior and preferences, allowing them to improve engagement strategies further. Download the Full Article

Conclusion

  Customer engagement is critical to business growth, and credit unions are no exception. Credit unions can improve member retention rates, increase revenue, and build brand loyalty by focusing on customer engagement. Credit unions can enhance member satisfaction and loyalty by utilizing tools such as CRM software, chatbots, personalization, mobile optimization, self-service portals, social media engagement, omnichannel support, and continuous improvement through regular feedback. This, in turn, can lead to tremendous success for the credit union. Credit unions that invest in customer engagement will be best positioned for success as the financial industry evolves. By proactively engaging with customers, credit unions can thrive and remain competitive in an increasingly digital marketplace.

Next Steps for Getting Started

  Insight Consultants can assist you in leveling up your digital support capabilities and improving member engagement. Insight Consultants offer:

• Customer loyalty schemes through AI-powered segmentation
• Web and mobile (omnichannel) software development capabilities
• Build AI-powered chatbots which can provide 24/7 assistance.
• Shareable customer performance reports and dashboards.

If you’re looking for a tech partner to help your credit union and bank outshine your rivals, look no further than Insight Consultants! We’ve got a team of tech experts with deep domain expertise helping credit unions, banks, and other financial institutions achieve digital transformation. Talk to a consultant today!