February 24th, 2022
By Guest Contributor Anne Legg, Data Strategist and Owner of THRIVE™
Finding ways to improve members’ lives is a foundational mantra for a credit union. While the mission is clear, the pathway may be muddy. From the member’s perspective, the member has only four problems that they want the credit union to solve.
These problems are:
- Transportation problem. The member needs transportation to accomplish basic needs. This should not be confused with an auto loan. The credit union should consider itself as the conduit to transportation.
- Shelter problem. The member needs a place to call home as a basic need. This should not be confused with a mortgage. The credit union is the conduit to shelter.
- Travel and play problem. The member desires either travel and/or play. They need a financial partner that will help them achieve these goals within their current financial condition.
- Rainy day and retirement problem. The member needs a financial partner that will help them set up short-term and long-term deposits.
Understanding the member problems provides clarity to the credit union on the process, product position, market position, and messaging and uncovers frictions.
Member friction is defined as the obstacles the member has getting their problem resolved. It is found in three primary categories: product, process, and people.
Product frictions can be the lack of product knowledge by the user. Typical product friction is a lack of understanding regarding how a skip-a-payment affects the loan terms and how a check hold works and affects available funds.
Process frictions occur when there is friction in an overall process. Common frictions include members not being aware of the credit union option, the obstacle-filled application process resulting in abandoned carts and unnecessary length, and loan fulfillment that takes too long.
People frictions are a combination of both individual capability and culture. A legacy culture may be one that has a low threshold for change. Products, policies, and processes do not get reviewed for improvement and create a status quo culture. This stagnant culture usually breeds a capability of complacency.
Common Friction Found in the Member Transportation Problem
Here are six common frictions in this auto purchase journey.
- Low awareness of credit union financing in the channels they use.
- Few or non-existing evaluation tools provided by the union.
- Challenges in engaging online for the loan and having to come to a physical office.
- Little or no engagement with the member post-purchase.
- Few channels provided for advocacy.
- Repurchase efforts that suffer due to the application process.
>>>Interested in learning more on this topic? Check out our whitepaper on Reducing Member Friction here
About the Author
Anne Legg is the founder, and principal of THRIVE™ Strategic Services. THRIVE™ works with credit unions to create revolutionary member relationships via organizational education, member-centric data strategies, and data maturity.
She is a recognized credit union business strategist, presenter author, educator with an MBA thesis on the credit union business model as well as two internationally published whitepapers on credit union business strategy. She has delivered over 100 onsite sessions to over 600 credit union senior leaders across the united states, launching their data journeys.
Anne is author of Big Data/Big Climb, the industry’s only playbook on data transformation. And she taught at the CUNA Marketing School and has acted as the subject matter expert for CUNA’s Credit Union marketing curriculum. She has also been an author to CUNA’s Environmental Scan, The Credit Union industry’s leading strategic planning guide. She has also served on various Credit Union Boards, including; CUNA’s Marketing and Business Development Executive Council, MAC, and the California and Nevada Credit Union League Public Advocacy Committee.