Strategic Link Partner, Vetter Discusses the Importance of Understanding Your Credit Union’s Attrition Rate
Knowing your credit union’s attrition rate can grant insight into how members use your credit union, what kind of members you have, and which members you need. For marketing outreach purposes, it can just as valuable to know which members you’re losing as it can be to know who you’re bringing on.
According to Strategic Link partner, Vetter, credit unions focus much more on member acquisition when discussing growth strategies. While certainly it’s impossible to grow without adding new members, it’s also impossible to grow if you lose members as fast — or even faster — than you gain them.
“During visits to credit unions of all sizes, I’ve heard a consistent interest in new member growth,” said Jason Smith, Northwest Credit Union Association VP of Strategic Resources. “Vetter helps credit unions improve their attrition rates and offers programs to digitally acquire, engage, activate, and retain members. We look forward to introducing credit unions to its targeting capabilities and automated marketing campaigns.”
The Importance of Member Attrition Numbers
Vetter reports that most credit unions don’t know what their attrition rate is. They either don’t think to ask, don’t research it, or don’t report their findings.
Knowing how many people are leaving, or better, why they’re leaving, can drastically improve credit unions’ understanding of their financial big picture. It can help clarify the steps needed to improve member retention and where to direct marketing outreach to retain the most profitable members.
If member attrition is high enough, a credit union that spends all their marketing money trying to attract new members at the expense of their most profitable customers will see massively reduced member retention rates and profitability. If it costs between $400 and $700 to bring a new member on board, you want to make sure you’re getting your money’s worth. Member attrition can undo a lot of that work.
Understanding your attrition rates can help you see where to focus your energy to improve member retention. If your profitable members are leaving because they aren’t aware of the services your credit union provides, then you can target your credit union’s marketing toward keeping these members informed and happy.
However, if you notice that the bulk of members you’re losing have only small checking accounts that cost more to manage than they can earn, you have less to worry about. In that case, you can focus your marketing outreach on bringing in new members.
If growth is your goal, then you need to understand both the ins and the outs of member flow. Your best first step is to prioritize better insight and understanding as to who’s leaving and why.