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Nothing Like a Good Controversy Over Procedure
Tuesday, August 9, 2016 6:30 AM

By David England, Senior Research Analyst, Cornerstone Credit Union League

Did you hear about the huge controversy at the U.S. Open? Dustin Johnson won, despite the debacle caused by the USGA officials. For our purposes, let’s just say that their procedure was… “poor.” Fortunately, the fiasco did not impact Dustin Johnson on the following Sunday.

How does this relate to credit unions? Simple. When we use poor policies and procedures or execute good ones poorly, we can lose members. However, when we get it right (from the member’s perspective), we increase loyalty among them. Policies and procedures are important to members, and credit unions can use them as the means to increase loyalty and attract defectors from other institutions.

Ever run into service, policies, or procedures that require too much of your effort? Often, it's just not worth it. How often do your members have to re-explain an issue? How many have to be transferred? How many times are they transferred? How many have to contact the company more than once to resolve an issue?

Member loyalty has more to do with how well you deliver on the basics than on frills that might be attached to “the service experience.”

Research informs us that:

  • Delighting customers by exceeding their expectations (offering a refund, free shipping, free product/service) makes customers only slightly more loyal than by meeting their basic needs.
  • The relationship between service satisfaction and loyalty is not very strong.
  • Companies build loyal customers by helping them resolve issues quickly and easily—developing procedures that reduce/minimize customers’ effort to solve problems.
  • The Customer Effort Score (CES) is a better indicator of loyalty, compared to the Net Promoter Score or Customer Satisfaction. 

Additionally, the CES supplies actionable findings by pointing out problems with services or products and inserts the customer into your continuous improvement efforts. Making things easy for your members means removing obstacles, or not making them repeat things. In other words, getting it right the first time.

Whenever you can, do not just solve a problem; head off the next one. Research shows us that more than 50 percent of those who call in for service have already visited the website but could not resolve the issue there. Improve your website and minimize channel switching. The efficiencies are tremendous, saving institutions time and money.

As a research tool, constantly use CES feedback to reduce customer effort. Use the learning to change policies, procedures and your culture, empowering your front line associates to deliver “easy” experiences.

There is much to consider when developing a CES program. Which questions to ask, who to contact for feedback, how many do we talk to, etc. This is an extremely potent tool that will improve loyalty and profits. Look into it!