Strategic Goal Setting: The Secrets to Your Credit Union's Success

Strategic goal setting

Establishing and defining strategic objectives holds a crucial position in shaping a prosperous and member-focused future for a credit union. The process of setting goals is not an optional exercise but an essential foundation. Within the realm of customer experience (CX) or member experience (MX) management, credit unions, like other organizations, encounter distinctive obstacles while striving for distinction.

This article will delve into the intricacies of goal setting for credit unions, address your challenges, and provide insights to help you chart your course. For context, let's take a moment to reflect on the industry averages of our clients as of YTD 2023. As of October 11, our data reveals that Consumer Loans stand out with an average Net Promoter Score (NPS®) of 89.96 and an average Member Effort Score (MES) of 6.57, with Mortgage Loans coming in second, having an NPS® of 87.00 and an MES of 6.47. These figures reflect the tremendous potential within the credit union industry when achievable goals are set.

So, get ready as we explore the intricacies of goal setting, equipped with data, strategies, and a shared commitment to empower your credit union to achieve greatness.

The Three Levels of Strategic Goal Setting

In the ever-evolving world of credit unions, the pursuit of excellence begins with a well-defined destination. The art of goal setting, often regarded as the compass that guides your credit union's journey, is an essential facet of your strategic roadmap.

The Significance of Setting Appropriate Goals

For credit unions, the importance of setting goals cannot be overstated. A specific set of objectives to work toward provides a sense of direction and equips credit unions to overcome these challenges systematically. Without a clear roadmap, institutions can easily drift aimlessly, making it challenging to measure progress or make informed decisions.

To excel in the ever-competitive financial sector, your credit union needs to tailor its goals to its unique performance data, member demographics, and industry benchmarks. An excellent starting point for this customization is to analyze industry averages.

For example, as of Year-To-Date (YTD) 2023, based on data from our valued clients, we can draw insights demonstrating what is achievable within the credit union sphere. Consumer and Mortgage Loans may be performing well, but we have uncovered that the lowest-scoring experience is Online Banking, with an NPS® of 53.71 and an MES of 5.87. Using this information, there is an opportunity for credit unions to focus on improving their digital channels.

This data paints a vivid picture, showcasing areas where credit unions have excelled and, in turn, serves as a foundation for setting realistic KPI targets. Utilizing this data to align your goals with industry best practices is integral in setting strategic goals.

The Three Levels of Goal Setting

The intricacies of setting goals within a credit union are multi-faceted, involving not only the overarching objectives but also the granular details at the individual employee level. To systematically address these layers of goal setting, we have identified three primary levels:

  1. Individual Employee Goals: These goals focus on the performance of each team member, holding them accountable for their contribution to the credit union's member experience. In essence, it's about aligning personal ambitions with the broader mission. To set these goals, we recommend employing Key Performance Indicators (KPIs) that resonate with the individual's role and responsibilities.
  2. Team or Department Goals: These goals zoom out from individual performance to assess the collective impact of a team or department. They are instrumental in promoting collaboration, teamwork, and a shared sense of purpose. Setting department-level goals can be particularly effective when KPIs are selected with precision. For example:
  1. Overall Credit Union Goals: At the highest level, credit unions set objectives that encapsulate the collective vision of the organization. These goals integrate various aspects of member experience and overall operational performance, serving as guiding stars for the entire institution.

As we navigate the intricacies of setting goals at these three levels, remember that the journey toward success is underpinned by data, strategy, and a clear understanding of where the industry stands. 

Key Performance Indicators (KPIs) for Individual, Team, and Overall Goals

Goal setting in the world of credit unions is not an isolated endeavor but a group effort, with Key Performance Indicators (KPIs) at the center. These metrics are the essential instruments that allow credit unions to measure performance, monitor progress, and improve member experiences.

The Role of KPIs in Measuring Performance and Improving Member Experiences

KPIs reflect an organization's dedication to continuous improvement and unwavering commitment to its members. By employing the right KPIs, credit unions can make data-driven decisions that enhance operational efficiency, bolster member loyalty, and, ultimately, drive financial success.

To set realistic and achievable goals, we often turn to industry benchmarks and historical data. Year over year, we have seen two areas of improvement in our credit unions:

  1. Problem resolution: Credit unions are better at handling non-transaction-related calls and interactions since COVID. This is apparent by seeing an increase in the YTD NPS® for 2023 to 74.00 over the 2022 NPS® of 70.56, as well as an MES of 6.20 YTD for 2023, compared to the 2022 MES of 6.07.
  2. Mobile app: Members are also reporting a more positive experience using the mobile app. The NPS® reported for the Mobile app YTD for 2023 is 59.21, compared to 2022, when it was 51.56. The MES for Mobile app YTD for 2023 is 5.82 - an increase from the 2022 score of 5.74.

These industry targets provide a realistic yardstick against which credit unions can measure their own performance. It's not about replicating the success of others but understanding the art of the possible and setting your unique goals accordingly.

KPIs for Individual and Team/Department Goals

In strategic goal setting, credit unions recognize the pivotal role played by individual team members and the significance of the collective effort. Key Performance Indicators (KPIs) offer a clear path toward excellence at both individual and team levels.

Individual goals

For individual goals, KPIs should align with specific roles and responsibilities. These may include the individual performer score, which evaluates aspects like member interactions and product offerings. Customization is essential to ensure KPIs reflect the credit union's unique characteristics.

Team/Department goals

Moving up the ladder to team or department goals, KPIs like the individual or team performer score, follow-up time saves members at risk for leaving the credit union, and follow-up time on cross-sell opportunities foster teamwork and shared responsibility. Credit unions can customize these KPIs to align with their strategies and member needs, aiming not just to meet but to surpass industry averages and set a standard of excellence.

KPIs for Overall Credit Union Goals

At the highest level of goal setting, credit unions define their overarching objectives that encompass the entire organization. These objectives integrate various aspects of member experience and operational performance, reflecting the credit union's vision for the future. To set these encompassing goals, it is paramount to consider KPIs that provide a holistic view of performance. Here, the individual team performer score, Net Promoter Score (NPS®), and Member Effort Score (MES) take center stage.

These KPIs offer a panoramic perspective of the credit union's performance and its impact on members' experiences. By leveraging these indicators, credit unions can craft objectives that align with industry standards while pushing the boundaries of excellence.

The Importance of Member Effort Score (MES)

Effortlessness in member interactions guides credit unions toward a destination where members feel valued and respected. This notion forms the core of the Member Effort Score (MES). This metric transcends the quantitative realm and delves into the qualitative aspects of member experiences. MES is not just another data point but a reflection of the credit union's commitment to ensuring that each interaction is frictionless. 

MES and Its Correlation with Wallet Share

One of the most illuminating aspects of MES is its strong correlation with wallet share, a pivotal indicator of a member's financial engagement with the credit union. Insights into MES reveal that the higher the MES score, the more members engage with the credit union, leading to a notable increase in product/accounts.

MES serves as a measurement to help credit unions gauge the simplicity and efficiency of member interactions. By enhancing MES, credit unions can effectively boost member engagement, increase wallet share, and foster a sense of loyalty among members.

The Importance of MES

Since we are all facing fierce competition, member retention is a cornerstone of success. The ease with which members can conduct their financial affairs is a crucial aspect of this retention. MES is not just a metric but a commitment to ensuring that every interaction with the credit union is as smooth as possible.

Leveraging Net Promoter Score (NPS®)

At the heart of member loyalty lies the Net Promoter Score (NPS®), a metric that delves into members' emotional attachment to their credit union. It reflects not just transactions but the relationship that members nurture with the organization.

NPS® asks a simple yet profound question: "How likely are you to recommend us to a friend or co-worker?" The score is a scale ranging from 0 to 10, with 10 being highly likely. This simple question encapsulates the essence of member loyalty and their willingness to be advocates for their credit union. This metric gives credit unions a holistic view of member loyalty, guiding them toward actions that nurture this loyalty.

Best-Performing Areas in NPS® and MES

It's important to understand that the figures from NPS® and MES are not just statistics; they are reflections of the commitment these sectors have made to their members. The connection between these metrics underscores that members find their interactions with these credit unions not only effortless but also worthy of enthusiastic recommendation.

Setting NPS® Targets Based on Benchmarks

Setting NPS® targets becomes paramount for credit unions aiming to achieve and surpass industry benchmarks. To set these targets effectively, credit unions need to consider the overall industry performance and their unique member demographics.

Leveraging industry benchmarks, you can define realistic NPS® goals. The aim is not merely to meet these benchmarks but to exceed them and become the gold standard for member loyalty and advocacy.

Integrating KPIs into Branch-Balanced Scorecards

As we venture further into enhancing member experiences in credit unions, we come to a critical juncture - integrating Key Performance Indicators (KPIs). This section will unveil the importance of aligning member experience KPIs within the broader context of balanced scorecards, emphasizing the weighted significance of these metrics and the power of a combined approach.

Integrating KPIs into Branch-Balanced Scorecards

Balanced scorecards are the cornerstone of performance management, providing a comprehensive view of how credit unions fare across various key areas. It's a framework that combines financial and non-financial metrics to gauge the organization's overall health and effectiveness.

Integrating member experience KPIs, such as NPS® and MES, into the balanced scorecards is the bridge that connects quantitative data with qualitative insights. It adds the 'human touch' to what can often be a numerical evaluation. By doing so, credit unions ensure that member experiences are at the forefront of their strategic objectives.

The Power of a Combined Approach

The strength of a credit union's member experience program lies not only in individual metrics but also in the harmony of a combined approach. By using both the MemberView Survey Platform for quantitative data and the Membershopper program for qualitative feedback, credit unions create a well-rounded program for improving member experiences.

  1. Quantitative Data from Member View Survey Platform: The MemberView Survey Platform excels in providing quantitative data, the backbone of KPIs and performance metrics. It offers numerical insights into areas like NPS®, MES, and various transactional experiences. It enables credit unions to set clear goals and measure progress.
  2. Qualitative Feedback from Membership Per Platform: On the other hand, the Membershopper program delves into the world of qualitative feedback. Here, members have their say, sharing the nuances of their experiences and emotions. It provides invaluable insights into the 'why' behind the numbers, helping credit unions better understand the member's perspective.

When these platforms work together, credit unions gain a holistic view of members' experiences. They can identify where improvements are needed and why members feel a certain way. This combined approach empowers credit unions to make data-driven decisions, guiding their actions for more meaningful and effective change.

Closing the Loop for Improved Member Experiences

Integrating KPIs into Branch Balanced Scorecards and the combined approach of quantitative and qualitative data lay the foundation for a loop that should never remain open. It's a continuous journey of improvement. Credit unions are not just assessing member experiences but actively improving them, measuring the impact of these improvements, and refining strategies based on those measurements.

The power of a combined approach is not merely in data collection but in its application. It's in the ability to translate insights into actions, enhancing member experiences, and ultimately ensuring the credit union remains a trusted partner in their financial journey.

Continuous Improvement: Setting and Achieving Benchmarks

GoalsSetting strategic goals tailored to your credit union's unique performance data is crucial to its success. This is an ongoing process of continuous improvement that hinges on the application of insights. Credit unions are not just assessing member experiences but actively improving them, measuring the impact of these improvements, and refining strategies based on those measurements.

As the financial industry evolves, your role in retaining and engaging members becomes even more crucial. We encourage you to use the insights provided here, industry benchmarks, and best practices as you set and achieve your goals.

Discover how MemberXP can empower your credit union to achieve its marketing objectives and improve member experiences.

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*Net Promoter Score is a trademark of Satmetrix, Bain & Company, and Fred Reichfield.

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