Thought Leadership

Do You Know What Your Credit Union Attrition Rate Is?

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November 7, 2018
Do You Know What Your Credit Union Attrition Rate Is?
By Bryan Adler

Knowing your credit union’s attrition rate can grant you insight into how people use your credit union, what kind of members you have, and which members you need. For marketing outreach purposes, it can jut as valuable to know which members you’re losing as it can be to know who you’re bringing on.

What we’ve seen is that typically, 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.
The Importance of Member Attrition Numbers

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.

Marketing teams need all the information they can get surrounding credit union member attrition and retention. Each new piece of information helps them increase efficiency, fine tune who to market to, and maximize what they can do with their dollar.

Maybe there’s so much obvious growth that it doesn’t seem important. Maybe it’s just too hard to report to the board that members are leaving as quickly as they join. Regardless of why credit union attrition rates are so poorly tracked, it’s valuable information to track.

Knowing how many people are leaving, or better, why they’re leaving, can drastically improve your understanding of your financial big picture. It can help you better understand what steps you might take to improve member retention and where to direct marketing outreach to retain your most profitable members.

Marketing Efforts Need Direction

Marketing teams need all the information they can get surrounding credit union member attrition and retention. Each new piece of information helps them increase efficiency, fine tune who to market to, and maximize what they can do with their dollar.

Marketing outreach efforts aren’t worth the cost if each new member gained opens a $5 checking account and never uses their debit card. If member attrition is high enough, a credit union who 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. Credit union member attrition can undo a lot of that work.

Understanding your attrition rates—or better, the reasons for attrition—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 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.

Gaining Insight

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.

Member attrition information can be found with a little extra effort. Better yet, you can work with a platform that can help clarify member acquisition and attrition, as well as optimize your marketing strategy for bringing in and retaining qualified, profitable new members.

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