Don’t Throw The Baby In With The Bathwater

Individual members reside within the massive amount of data available to credit unions, but looking beyond segments and stereotypes to discover what individuals want takes extra effort.

 
 

When promoting  a new product or targeting a new service, marketers tend to rely on group data and surveys to help them think in the aggregate. But the rapid adoption of business analytics is leading to deeper insights about individuals as well as collective groups.   

Credit unions no longer need to rely on generalized attributes or arbitrarily segmented groups — hello, Gen Z, millennials, Gen X, and boomers — as if the people within are homogenous, even monolithic, in their demographics and dreams alike.

Callahan & Associates has been exploring how to be truly member-centric, and the rise of BI brings to light some interesting questions. Is your credit union targeting some members while ignoring the ones you really want to reach? Is your credit union targeting members with the right products at the right time? Does your credit union make assumptions that ignore individuals who don’t fit the mold?

 

 

Credit unions are sitting on a goldmine of member data, but don’t throw the baby in with the bathwater. Consider the individual.

Bring members into a conversation and ask them what they want from the credit union. This is one way to develop a truly member-centric lens. It’s also a great way to add individual perspective and important nuance to the insights the credit union already has.

We know that people in certain age groups tend to have similar needs, such as education, housing, and retirement. And, of course, we know some “insights” are just tired stereotypes, like that millennials have an affection for avocado toast.

Gaining that perspectives and nuance does require extra effort; however, there are lots of ways to solicit member feedback — focus groups, mini-surveys, and complaint boxes are just three ways to learn more about the broader demographics that any credit union can easily extract from its data stream.

Callahan put its money where its avocado toast is and conducted its own informal office survey about how employees use cash.

Related: What’s In Our Wallet? An informal office poll attempts to identify differences in attitudes on paper payments.

A couple of dozen current and former Callahan employees that range in age from 22 to 61provided feedback about things like cash usage, mobile wallets, and security concerns. Callahan analysts segmented the results into two age ranges — 22-32 and 33-61 — and displayed the results in an easily digestible format. See the results here.

As for a top-line takeaway, Callahan associate editor Erik Payne, who coordinates the company’s My Generation blog and is a 20-something himself, says it well: “Readers are cautioned against extrapolating these results to all people in a given age range. This survey was created to learn more about Callahan’s employees. To learn more about members' wants, needs, and habits, credit unions must ask them.”

Because we asked, we can draw some conclusions about this particular group of people. If they were your members, then you’d know something very granular about them and could act on that insight on an individual level, perhaps by reaching out to a member to offer a product or service you think they’d be interested in based on their answers. Or, maybe you can make an at least somewhat informed decision for the whole membership based on this data.

Focus groups, mini-surveys, and complaint boxes are just three ways to learn more about the broader demographics that any credit union can easily extract from its data stream.

There is some efficacy in this approach, even it doesn’t strictly fit the probability of error. It also might get you past some effects of stereotyping, of assuming someone will behave in a certain way because of age, ethnicity, etc.

Sure, some surveys are of dubious value. My favorite example is from a reputable financial services provider that used a survey to claim, among other things, that “35% of millennials report having no house cleaner as one of the major sacrifices they make to save for retirement, compared with 30% of Gen Xers.”

Don’t be that guy. Be the credit union that uncovers value in vetted, well-researched market reports around cultural preferences and tendencies. CUNA Mutual, for example, just released one titled What Matters Now: Multicultural Consumers.

Here are just a few bullet points:

  • African American and Hispanic consumers are twice as likely to research financial products and services using mobile apps and call to ask about financial products.
  • Speed of lending is more important to multicultural consumers than non-Hispanic whites.
  • Hispanic consumers are nine times as likely to acquire a small business loan within the next five years.
  • African American consumers are two times more likely to take out a student loan than white consumers.
  • 69% of Asian and white consumers own investment products.

Certainly, this provides some useful food for thought about how to design and deliver lending and savings products. But the report also provides this caveat: "When examining the research findings, it's important to remember a person is made up of many unique cultural aspects. Be careful not to over-generalize or create stereotypes from this information and apply it to all members of a certain group. The data shows trends and significant differences, but does not attempt to speak for every individual."

You can draw your own conclusions from myriad surveys, reports, research, etc. But to avoid making a social gaffe and losing out on the opportunity to serve a member and grow some business, take the extra step to talk to your members. With member-centric glasses on, you’ll see your members for the individuals they are rather than the stereotypes they might be.

It’s Time For Tough Questions

Asking tough questions helps the credit union movement flourish. Make Callahan’s Tough Questions commentary on CreditUnions.com a regular stop for insight on thinking differently about the movement and framing strategies for success.

Read More Commentary

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Sept. 29, 2022


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