The Trellance Data Blog

Using Data to Create a Unique Member Experience

Posted by Erika Hill on May 7, 2019 11:59:00 AM

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Enhancing member experience has been the subject of many blogs and white papers, and there is a reason why this topic is so popular. In fact, there are three good reasons why this topic is especially relevant now.

  1. Competition- Competition among financial institutions, challenger and online banks is getting fierce. Banks and online financial institutions like Marcus and Ally need your members’ deposits to fund their loan activity, and are offering higher returns for their business. Also, the huge credit card issuers want to put their cards in your members’ wallets, and are enticing them to do so with sign-up bonuses. Plus, every financial institution wants your best members’ loan activity on their income sheets.
  2. Technology– Technology has become affordable for credit unions of nearly any size. The technology to harvest data to drive decision making, segment your members, create targeted offers, and get a real-time view on each member, is much more accessible.
  3. Expectations- Your youngest members as well as the next generation that could become your newest members, demand a unique experience. They, like other customers (retail customers and e-commerce shoppers), all want a customized, digital experience. If it’s not fully digital, they want an experience that has some digital component. How do we create that experience?

The Answer is Technology

Of the three factors that make this topic especially relevant, technology is the one that drives everything else. Creating a personalized, positive experience that differs for each member relies heavily on data. This includes collecting, normalizing, and combining data from multiple sources to create a unique view of each member. This view is then used during the narrow window of opportunity you have while the member is in the branch, on the phone, in an online chat session, or engaged in online or mobile banking. This unique member-centric view is also used to determine which of your members should receive a special offer, which member should get fees waived, which members deserve bonus interest on money market accounts and other business decisions that help to enhance the member experience.

2019 AXFI Conference, June 9-12, Minneapolis MN

Competition Creates the Need to Know Your Most Valuable Members

Why do we need to provide a unique member experience? Because competition demands it. According to research cited by McKinsey, “organizations that leverage customer behavioral insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin. ” Two perfect examples are Netflix and Amazon, both of which have built their user interaction around customer behavior data and analytics.

75% of Netflix viewer activity is driven by recommendation (Source)

35% of Amazon’s sales are generated through their recommendation engine (Source)

Credit unions need to adopt this strategy. Wells Fargo made cross-selling a bad word. But suggesting the next best product in that short window while the member is on the phone, while at a branch, or while on a chat session, is the way credit unions can do the same thing that Netflix and Amazon do. And before long, it will be more challenging for financial institutions that are not analyzing their members’ data to compete against credit unions.

The data that credit unions have is invaluable. But very few credit unions are using it because the data is scattered all over the place.

You Have the DataHowever, there are credit unions that are using some form of analytics today – typically a tool provided by the credit and debit processor to view all card data in a dashboard, or a tool provided by the core vendor to create reports. But these are just small parts of the total picture. A more accurate and functional picture emerges when a credit union combines the members’ payments transaction, loan history, credit score, zip code, bill pay, ACH activity, share balances and money market deposits, and other pertinent factors. Having this information will help you to create a unique member view and target members individually, but will also help you to determine who your most valuable members (MVMs) are. The truth is that some of your members are more profitable than other members. And it requires data analytics to determine which ones are your MVMs.

Using data to create a unique member experience is not an option. It is expected. If your credit union is not using data analytics to offer the “next best product “to each member or to segment members for targeted rewards and to determine who your most profitable members are, you can be sure that other financial institutions are. If you want to create unique member experiences by harvesting your member data and transforming them into useful insights, contact us today

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2019 AXFI Conference, June 9-12, Minneapolis MN

Topics: Marketing, Membership, Data Analytics