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Credit Unions endeavor to deliver dynamic services to their members. In this article, we will discuss what matters most, so that the right products and services are focused on and it is possible to excel. 

We will talk about choosing members and choosing the right strategy, organizational compatibility, focusing limited resources on the most important projects, and organizational ambidexterity.

The insights in this article were shared by Andrew Downin, Chief Marketing & Digital Officer, Vantage West Credit Union at the 6th Annual CULytics Virtual Summit.

  • Choose your Members and Choose your Strategy
    • Determine your primary customer. The best way to ensure optimized utilization of resources is to pair your members and the strategy you choose in the best manner possible. It is important to remember that you can’t be all things to all people. From a CU perspective, it is recommended to have a chosen focus on particular segments and ensure that everyone in the organization is familiar with the “why” of the choice. For example - Members can be chosen based on various demographic categories, nature of businesses, etc.
    • What does your primary customer value? A desirable approach is to invest in what your primary customer matters the most. For example, customers can value easy access, handholding, self-service, low prices, a high-end environment, and more. It is only a matter of asking your members.

There are three types of strategies a CU can pick from and align with -

    • Member Intimacy - Deeply building relationships by understanding the needs of the members, and it involves customization and exceptional service. There is often a heavy focus on employees (For example- recruiting employees based on certain qualifications or experiences).
    • Low Cost -Operational Excellence - This strategy includes streamlined operations, and efficiency leads to fewer employee interactions. (Example - Amazon) The focus is on convenient electronic channels, and this efficiency leads to better pricing.
    • Product/Service Leadership- In this strategy, the emphasis is on innovation, and product development. It involves a significant investment in technology and attracts members who are willing to pay more for the latest. (Example - Apple).
  • Organizational Compatibility - Compatibility should be actively managed and it is important to note that it is possible to have incompatible members. Incompatible members are less satisfied overall, have lower net promoter scores, are less pleased with interactions with the company’s employees, generate less revenue, and impose more costs through their incompatibility. They also lead to a reduction in the overall performance of the organization. You can choose from the following strategic options.
    • Centralized Reduction - Systematically reduce the selection of incompatible customers while fostering the selection of compatible customers.
    • Decentralized Reduction - Empower your customers to make better decisions. (Example - IKEA). CUs can adopt this strategy by nudging members towards focused delivery channels.
    • Centralized Accommodation - Systematically align the operating system to accommodate the needs and behaviors of a particular group. Multi Focused approach attempts to develop multiple service models tied together by a layer of shared services. For CUs this is possible for diverse fields of membership. You should be able to leverage economies of scale around shared services and back-office operations. Align operations to meet the needs of the chosen portfolio of members.

Focus limited resources on the most important projects - It can be beneficial to consider that working on fewer projects at a time allows you to get more done. This requires a common language of prioritization. Find the right balance between exploring and exploiting. 

           Exploit efficiency and lower cost, control, and processes. Measure success by production and accuracy. Explore high uncertainty and high cost, and adapt the approach of trial and error. Measure success by insights, speed to market, etc.

  • Organizational Ambidexterity - It is an ability to do things simultaneously and can be achieved through two models -
  • Structural Ambidexterity - Separate profitable core businesses(exploiters) from next stage ventures (explorers).
  • Contextual Ambidexterity - Each department is responsible for both exploitation and exploration.

Conclusion

Identify your member group, identify product/service attributes, and prioritize attribute importance based on your target member group. Don’t assume what your members value. Ask and act upon it. Force yourself to make difficult trade-offs and objectively measure yourself in 6 to 12 months. If possible shift resources from underappreciated attributes to more highly appreciated attributes. Most importantly, recognize how less can be more for strategic success.

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