Credit unions with the highest Net Promoter scores (NPS) tend to experience higher asset growth, membership growth, and loan growth, according to a study by the Filene Research Institute and Satmetrix.
The researchers noted that credit unions have become accustomed to earning high scores on member satisfaction, compared to other financial institutions; The annual American Banker/Gallup poll on customer satisfaction has ranked credit unions at the top of the list for 23 straight years.
Market share disparity
But despite such high customer satisfaction ratings, credit union market share has remained relatively stable over the past decade. To examine the apparent disparity between satisfaction and market share, the Filene Research Institute asked customer loyalty consultants at Satmetrix to evaluate member loyalty and analyse the elements of credit union experience that drive loyalty. Their conclusions are presented in a research report entitled 'A Fresh Approach to Measuring Member Loyalty'.
Satmetrix employed the Net Promoter Score metric to analyse member loyalty for 17 participating credit unions. Net Promoter is a way of measuring loyalty that simply gauges how strong customer relationships are by comparing the number of "promoters" with the number of "detractors" within an organisation's "customer universe".
High and low scores
The 17 credit unions participating in the study scored an overall NPS of 54.3%, with 67.7% promoters and 13.4% detractors. Credit union individual NPS ranged from a high of 79.1% to a low of 19.6%, and credit union overall NPS greatly exceeded those of other retail banking outlets.
Promoters are likely to be individuals who regard the credit union as their primary financial services provider, have a good overall experience with their credit union, and are long-term members.
Promoter & detractor drivers
"The drivers of NPS in credit unions are fairly intuitive," explained George Hofheimer, Filene Research Institute's chief research officer. "Overall product and service quality, overall value and member service and support are key ingredients. High Net Promoter scores correlate with high credit union asset growth, high credit union membership growth, and loan growth."
Copies of the report are available free to members of the institute, or for US$75 to non-members.