Ten Steps To A MRM Strategy

By Stanton Davis

For many credit unions, adopting a member relationship management (MRM) strategy will essentially involve refocusing their business to put profitable members at the center of the credit union’s business activities. They’ll eliminate separate product silos and integrate all service and delivery channels. Credit unions will set goals for individual member relationships, and empower employees to make pricing and member service decisions.

Clearly, such a shift in business strategy will affect virtually all aspects of your business. Below are some considerations that should be “top of mind” as you move toward a MRM culture:

1. Invest in information technology. A MRM strategy requires a community credit union to build integrated member databases on a technology platform that can leverage member information at the point-of-sale. Your system must be able to handle internal information and compare it against external market and demographic information to determine the size and nature of the member “wallet.” Available in-house systems have a wide range of capabilities and generally are within community credit unions’ reach.
2. Measure member profitability. Know who your “high potential” members are. An integrated member knowledge database will allow you to view cumulative profit-by-profit decile (that is, where the bulk of your profits are coming from), profit by product, cumulative profit contribution by type of household, and so on. Many credit unions will be seeing this type of information for the first time, and will be amazed at what they’re learning. A word of caution: Don’t be overly concerned about analyzing member profitability down to a tenth of a cent; it’s not worth the effort.
3. Prioritize your members. Again, using your member knowledge database, distribute profitability information to various member touch points. Many credit unions are assigning members a number indicating their level of profitability. When employees, including tellers, access the screen detailing members’ account information, the profit ranking appears in the top corner of the screen.
4. Devise profitability-based marketing strategies. When you know who your most valuable members are, you can target them for focused retention and cross sell efforts, and you can tailor marketing communications to high-value members’ needs and choices. Your member knowledge database can provide market-specific input to your marketing strategy, rendering it targetable to members’ needs and value preferences, and less mass-market oriented.
5. Integrate delivery channels. Consider dismantling the credit union’s old product goals as part of your transition to MRM. Here again, an integrated member knowledge database makes it possible to focus on member needs rather than parochial or short-term product goals. Motivate and reward employees for referrals and cross sales.
6. Make repricing decisions. Don't be afraid to reprice your less-profitable accounts. Even if you lose some of them, you’ll come out ahead.
7. Retool member service procedures. Many credit unions have rerouted routine service calls from the branch to a call center. That helps employees focus on the members visiting the branch, and it usually results in higher member satisfaction. With MRM, everyone must recognize that the credit union’s best members deserve higher service levels.
8. Employ predictive models. A member knowledge database supports employees’ cross-selling efforts by displaying information that can be used to identify needs and make relevant product suggestions.
9. Employ member loyalty programs. Recognize and reward your best members with lower-cost loans, free services, and other perks commensurate with their status. Loyalty programs can become a cornerstone of your MRM strategy.
10. Create member memory. The beauty of a member knowledge database is that it enables you to remember members’ choices and anticipate their future life cycle needs. You can truly become a member’s credit union of choice for a lifetime.

MRM enables credit unions to win in a world in which members have unprecedented choices, knowledge, and power. The key is tailoring your product offerings, marketing messages, and delivery to specific members’ needs and preferences. MRM is more than an optional strategy. It will become the cornerstone credit union business.

Stanton Davis is director of marketing for epl Inc., Birmingham, Ala. Contact him at 800-243-4375.