We get it—acquiring new members is vital to the growth of your credit union and virtually any other business. While the importance of new member acquisition is never in question, the cost of these ventures can be exceedingly high. According to a study by market analyst firm Vetter, a credit union's new member acquisition cost (MAC) sits comfortably somewhere between $400 and $700. This is a figure that has been climbing since COVID-19 due to the supersaturation of digital channels.
For perspective, the MAC can be a whopping five to seven times more than the cost of retaining existing ones. Although ditching new member acquisition strategies isn't an option, focusing on ways to better retain members, deepen relationships, and maximize cross-selling opportunities are. Let's take a closer look at how credit unions can do just that and potentially lower member acquisition costs in the process.
Remember...It's All About the Member Experience
The member experience represents the totality of the interactions each member has with your credit union throughout the life of the relationship. Whether it's exposure to an advertisement or a branch visit, every interaction can bind or loosen the relationship between your credit union and a member.
Today's successful credit union understands that it's all about the member experience. Because consumers have as many as 30 relationships with different financial companies and many offer similar products and services, it's truly the experience that sets your credit union apart. And when you get the member experience right, increased member retention is only the beginning.
For instance, a Harvard Business School report suggests a mere 2% increase in member retention can deliver an equivalent financial benefit as a 10% cost reduction. The same report suggests that increasing retention rates by 5% can drive profits by 25%, up to 95%. While a delightful member experience can help with retention, it can also best position your credit union for highly-lucrative cross-sales opportunities.
Cross-Selling Should Be a Strategic, Personalized Experience
Did you know that almost half of consumers say they don't use any additional services because they have never been asked or have been asked poorly? Simply put, passively waiting for a member to ask you to sell them additional services or implementing mass marketing solutions are for the days of yore. Today, it's all about proactive member engagement enhanced by data-driven personalization.
As a critical piece of the customer experience puzzle, your credit union can gain a significant competitive advantage by creating personalized member journeys that are less siloed, smarter, and powered by the data already at your disposal. When it's done appropriately, personalized messaging can bolster the member experience, drive engagement, improve retention, and optimize cross-sell opportunities by delivering the right message at the right time—based on the member's unique needs.
Instead of crafting messaging solely on the credit union's goals and needs, personalization puts the member's needs first and offers timely solutions based on those needs. And do you remember the high cost of new member acquisition? A McKinsey study found that personalization can:
- Slash member acquisition costs by as much as 50%
- Increase revenues by 5% to 15%
- Bolster the efficiency of marketing spend by anywhere from 10% to 30%
In the end, personalization is a win-win—driving stronger financials and better performance for the credit union and better member outcomes.
FLEX Can Help Credit Unions Personalize Cross-Selling to Maximize Efficiency
The benefits of offering personalized, timely, and appropriate product suggestions offers unlimited upside potential. In addition to improving the overall member experience, personalization can expand cross-sell opportunities, deepen relationships, and even help drive down member acquisition costs. Even though the personalization journey is highly digitized, Member Service Representatives play a huge role in the process. And the core system's strength should be defined by its ability to provide information seamlessly and quickly across multiple channels. FLEX Cross Selling eBook offers all of this and much more!