The Digital Member Experience
You are at a conference and a colleague asks you to describe your digital member experience. How do you respond? The typical responses would include a social media presence, a website with self-service capabilities, and online and mobile banking. Do those channels create a digital experience or provide the ability to gather information, perform transactions, and open accounts/loans?
Let’s use the world of fast food as an example. KFC and Popeyes both sell chicken, as you probably know. The drive-thru and walk-in channels are where you order and then wait to receive your food. Compare that to Chick-fil-A. Ordering food at Chick-fil-A is an experience. Their premise is not only to fulfill your order but make it an efficient and pleasurable experience from the point that you place your order to the point that you receive your food. Sure, they sell the same “products” as their competitors, but there is always a demand - driven in part by the favorable experience. Just check out a Chick-fil-A restaurant with its long line of cars at all times of the day.
So, when you think about your credit union’s digital experience, are you merely providing access to products and services outside of your branch and contact center network, or are you creating an experience that will retain your existing members and attract new members?
Many businesses learned a painful lesson as a result of COVID. A digital channel experience is different than a physical channel experience. Companies that treat their digital channel as an extension of their physical channel are using the inside-out approach, as they rely on the reputation of the physical channel to grow the business. More effective is the outside-in approach, where the digital channel grows the business, and the physical channel is a convenience factor. That was a hard lesson learned for many companies when COVID hit.
Member Experience is at the forefront of every credit union’s strategy. There are two terms we need to keep in mind: presence and experience. You are probably familiar with the cliché: “Half the battle is showing up.” Merely showing up is presence. In the digital world, that means you have some representation of your brand or business (return to the social media, website, online, and mobile banking comment from earlier). But a presence does not compel consumers to do business with you. An experience does.
What About Brand Reputation
Once upon a time, “We have a solid brand” was a solid business model. That statement brings another cliché to mind: “That was then, and this is now.” Then: JCPenney and Sears. Now: Amazon, Stitch Fix, and Etsy. The first group were household names (and to be fair, were eroding long before COVID because they saw the digital channel as an extension of their physical network). When you think about Amazon, Stitch Fix, and Etsy, you think about an experience. These companies have created a better experience in the digital channel than their physical counterparts that were household names. What are the components of their strategy? Data analysis, selection, recommendation, fulfillment, and delivery. There are plenty of companies in the digital channel that offer similar products, and a presence, but they cannot match the experience. Just showing up does not create an experience.
And let’s up the ante a bit. What experience does a consumer expect when you label them a member? The term "member" intimates a more personal experience than "customer.” The classic American Express marketing campaign based on the slogan "Membership has its privileges" is an excellent example of this premise. Are you simply a cardholder, or are you a member? Is that card provided merely to process transactions, or is there an "experience" that ownership of that card delivers?
Returning to Amazon for a moment… Is Amazon a consumer-based or membership-based organization? Both. In 2020, Prime Membership was projected to grow to 142.5 million users, surpassing 50% of the US population for the first time. Amazon Prime's growth clearly demonstrates the premise of "Membership has its privileges." This is not a company with a 100-year brand reputation or a long-standing physical presence. It is a company with an excellent experience. In today’s digital world, brands are created in a matter of months. The brands that grow and thrive create an experience.
Process or Product
What makes a company stand out these days? Is it process or product? When we think about most Fintech disruptors, are they creating innovative products or creating a better experience around existing products? Think about basic financial transactions such as paying a merchant, sending money to a friend, or sending money overseas. None of these transactions require new products, but the best experience will dictate the winner. The secret sauce: a frictionless and easy-to-understand process that expediently performs the desired outcome. In other words, these companies provide an excellent experience around a product.
When we return to the digital member experience question posed at the conference from the beginning of this blog, perhaps the answer is “We provide a frictionless and easy to understand digital process for our members to facilitate their financial needs.” As Emeril would say, “Bam!” Notice this response does not say anything about unique products. “We have” is replaced by “We provide” - so it’s a matter of product experience over product presence.
Experience is the Expectation
Today’s financial consumers expect a pleasant digital experience. While brand reputation was traditionally a major factor in a consumer picking a company, that has been replaced by convenience and digital aptitude. A digital experience transcends business verticals. When consumers find a great digital experience, they use that as the benchmark against other companies they are doing (or considering doing) business with.
That bar is set even higher for credit unions because membership intimates a more personalized experience. The digital channel can no longer be seen as an extension of the physical network. Simply having a digital presence conveys that you do not have the capability or desire to compete with similar businesses in the digital channel. A “Bam!” digital experience is a requirement for any credit union to retain existing members or attract new ones.