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  • Writer's pictureFred Kelly

Why Your Credit Union is Losing Members (and How to Turn it Around)

Many credit unions are struggling to attract and retain members, in fact, even prior to the Covid pandemic, 48% of federally insured credit unions saw their membership numbers decline over the previous 12 months. We need to fix that...

So the Question is Why?

Of course, there will be macro influences like the economy, the rise of FinTech, changes in demographics etc. But these are all factors that are outside our direct control, so let’s not invest energy in them. Yes we need to keep track of them, but in order to stop the decline in our membership we need to focus on actions we can take that are within our control.

So how can we diagnose where our actionable problems lie? Just like visiting the doctor, the first step is to figure out which part of the body hurts. Once we have done that, we can narrow down the options and decide what tests we should take to obtain a more precise diagnosis.

Where does it hurt?

When it comes to building your membership, there are three main areas in your credit union that we should focus on.

These are:

  1. Marketing - what channels and messages are you conveying to start a conversation with potential members?

  2. Sales - are the conversations leading to people using your product?

  3. Product - do people love the product? What we are really talking about here is the member experience. It’s great experiences that drive retention and attract more members through word of mouth marketing. (Product is one of the 4 P's of business - see This is what Separates Success and Failure in every Credit Union)

These three components represent the Member Acquisition Journey. This is the process they go through from being a non-member to becoming an active member of your credit union.

In smaller credit unions there may not be separate sales and marketing functions or the marketing may be outsourced and, even in larger credit unions, there often isn’t a product development team.

It’s important to identify those who are responsible for each of these three areas so that they can work together as a team to rebuild the membership. If you don't have anyone whose job it is to develop and continuously improve your products (i.e. the member experience), then you should think about who would be best suited. More and more credit unions are creating the Customer Experience Officer role. Either way, someone needs to own this if it is to be successful.

What often happens is that these three areas remain disconnected. Marketing dream up campaigns, sales try and sell what they’ve got and product improvement is an afterthought.

There needs to be a joined up strategy across these three functions.

When these areas are in sync, then the product is like a magnet that pulls potential members in through the Marketing-Sales-Experience chain. When they are not, then marketing struggles to get engagement from potential members, sales feel like they are herding cats and the product is unloved.

1) A Product or Service

In our diagnostic journey let’s grasp and nettle and start with the hardest part first. This is 80% of the challenge. Your product or service lies at the center of your credit union’s orbit.

Start by making a mindset shift and viewing products or services as experiences. Members buy from you based on how your product makes them feel - the experience. It is the sum of the points of interaction they have with your credit union that helps them decide whether they want to be your raving fans or move onto a competitor.

How to Fix It

Start off by mapping the current member experience. You want to walk through each of the steps (no matter how small!) that a member has to take to consume your product. Here’s some further guidance on understanding this from the member’s emotional perspective. The member experience mapping exercise will identify some problem areas that require your attention.

Before you rush to generate solutions, take some time to ensure you identify the underlying problem. As Albert Einstein once said “It’s not that I’m so smart, I just spend more time with the problem”. Before you attempt to improve the member experience, you will find it helpful to have a read of my article Innovation - a Low Risk Approach for Credit Unions for help on how to analyze problems, generate great ideas and test them before committing your precious resources to them.

If you create a great member experience, it will act as a magnet, drawing in new members who are suffering poor experiences with your competitors. It makes the job or marketing and sales almost superfluous. You will certainly be able to spend much less on marketing.

2) Marketing

Now you have revamped your product offering, you need a way of communicating this to the market. This is obviously called marketing. If you have built a great member experience, then the job of marketing is to capture the essence of that experience and transmit that through the various channels. You have plenty of options here. See my earlier article 21 Ways Credit Unions Can Connect with Members on how to find less crowded channels to help you stand out from the crowd so that you make every dollar of your marketing budget count.

This part of the chain fails when marketing ignores the member experience aspects of the product and instead focuses on the credit union. You are not trying to sell the credit union. You are trying to sell the member experience. That’s what members want. A great experience.

How to Fix It

Shift your marketing from talking about how wonderful your credit union is, to talking about the members' pain points. You know when you meet someone at a conference or a dinner, and they talk non-stop about themselves? That's what a lot of marketing feels like to members. When you care about someone, you ask about them, you talk about them.

Here’s a quick litmus test for you. Read your credit union’s marketing material (webpage, leaflets, emails, social media channels etc) and count how many times you can see the words “We, Us, Our”. Now count how many times you see the words “You” and “Your”. Just changing words makes a huge difference to how your members feel.

Also watch out for phrases like, established in 1954, member-owned, serving our community, the state’s biggest, 36 branches, unique financial institution, members are our family, not-for-profit and full-service. None of these connect at an emotional level with the specific needs of your members.

Once a person feels like you understand, empathize with and have a solution for their problem, they'll come knocking. As one of history’s most insightful business gurus, Peter Drucker said “The aim of marketing is to make selling superfluous.”

3) Sales

The job of marketing is to get a conversation started, to show that you can add value to your member’s lives. If they buy into that, they will engage with you. That’s when the sales process starts. If you have designed a wonderful product (member experience) and marketed it effectively, from this point onwards it’s yours to lose.

But beware, you can lose if from here. Marketing is the first contact with the potential member. They should have conveyed an amazing experience awaits them. The delivery of the experience starts when the member reaches out to your sales team (I use that definition broadly - it may be anyone in your organization who has contact with members).

If that first point of contact fails to meet the member’s experience expectations, they will feel disappointment and all their fears about trusting financial services firms will be confirmed. Rescuing this situation isn't impossible, but it is very difficult.

How to Fix It

Ensure your sales process is part of the member experience map. Regularly train all staff involved. Include role-plays and simulations of each stage in the process. This is a skill anyone can learn through practise.

Create metrics for each step in the process so that you can quickly identify and rectify problem areas. This is the equivalent of a doctor sending you for tests. What gets measured gets managed.

Finally, be sure to include communication pressure valves. This particularly important for any digital steps in the sales process where your members are effectively on their own. Create an avenue for members to communicate with you at every step in case they want immediate help in advancing to the next step. Make sure that the person they reach can actually help them with the process they are in (or at least owns the problem and finds out the answer for the member).


Business, like life, is messy. The three areas I have outlined act as a framework to help you through the diagnosis process so that you can direct resources to the areas that are most likely to drive membership growth.

When applying the framework you can look for the low-hanging fruit - those areas that are easy to fix but have a real impact on the member experience. This is a task that never finishes, but it's also the best activity in any credit union. It's only be continuously upgrading the member experience that your credit union will thrive in the age of FinTech.

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