It’s 2021. It’s time for focus, and a question for every leader in the industry. What would happen if we stopped trying to be everything to everybody, stopped being “just okay” at too many things, and started being truly exceptional at and for a focused few? What if we really chose a niche, and built for this target? Would we not rise above the commoditization, stand apart, drive growth and turbocharge our success?
We suggest the place to start is to use research and data analytics to truly understand the unique wants, needs, and drivers of your individualized member segments.
Consider the following adage: “Expertise comes from distinction.” The amateur sees a forest of trees; the botanist – the expert – can discern not only great differences in those trees, but also distinguish their structure, growth, reproduction, metabolism, development, diseases, and evolution. So it is in our business. The amateur sees and serves just “the membership” – the expert understands unique member segments and individual member differences, and strives to build differentiated products, services and value accordingly. The amateur risks falling prey to E2: trying to be Everything to Everybody, and all too often resultingly dwells in mediocrity. The expert knows that the best brands stand for something, seeks to understand and build to a unique segment of the population, and strives for exceptionalism within that niche. Distinctive leaders focus, segment, and separate. Dunkin serves individuals “on the go.” USAA, the military. Betterment, the young, set-it-and-forget-its. Dave, those with more month than money.
Both market and internal research can play a vital role in understanding and building relevant distinction … and in helping leaders understand distinctions, and thus enhance their expertise. For example, employee research that only looks at overall data may miss vital distinctions between member-facing and back-office staff perceptions; better still, both may miss departmental differences. Member and nonmember research that considers segmentations by geography, product usage, relationship-status, age, income, and more, overcome the general data aggregation, lack-of-distinction risk that may ultimately describe the averages of everyone, and the specifics of no one.
Consider generationally-differentiated findings where low-relationship Gen Z and Gen Y members dramatically prefer multi-state banks over other credit unions when considering a new PFI. Gen X and Boomer members, however are much more likely to prefer other credit unions. Or GCS’s recent national study that shows a direct correlation between increasing big bank preference and rising education. Remember the question: who is your target? For whom are you striving to differentiate?
Geographical differences can also dramatically impact research findings and corresponding consumer perceptions, wants and needs. In the current pandemic, for example, urban, suburban, and rural consumers appear to look through a very different lens. Rural residents have tended to have significantly lower levels of employment, less downward income resulting from COVID-19, and less concern for (and greater desire for) branch utilization throughout. Rural members also show significantly lower interest levels in remote access options than either their urban or suburban counterparts, again emphasizing a differentiated desire for branches by region. Treating all members without distinction may result in dramatically skewed levels of satisfaction and loyalty. Average for all; exceptional for none.
Other demographic distinctions can also prove tremendously insightful. Consider payment preferences. As education level increases, debit card usage decreases and credit card usage increases. There is, in fact, a 100% difference between preference for mobile wallet usage by age. In a recent nationwide GCS consumer survey, 22% of Gen Z respondents preferred payment by mobile wallet/app, whereas only 11% of Baby Boomers did. In fact, this Gen Z preference exceeds their desire to use debit or credit cards. How important is this niche to your future, and how aligned are your offerings? (Note: depending on your vision and target focus, a “not very” answer might be perfectly appropriate to both prior questions.) Bottom line: Who’s your target?
Income levels, of course, can play a very material role in perceptions and needs. But is your shop actively acting on this knowledge? Saving and reducing excess spending strategies are much more important to lower income consumers. College funding increases in importance with rising income, as does interest in investing, estate, and retirement planning. Be honest, none of us can do it all well. E2= 0, remember. On which side of the income spectrum is your focus, and to what extent do your products and services demonstrate it?
Consider also employee perceptions, and how the same rules of distinction driving expertise apply. Overall levels of staff engagement can be interesting, but wouldn't it be significantly more insightful to know engagement levels and driving factors by role, level or function? Or to parse drivers of engagement by detailed rank? For example, GCS’s national CU employee surveys show training, internal technology, and both organizational and informal communication routinely rank in the bottom five among 80 indexes. What factors are driving (or muting) engagement at your credit union? The distinctions in knowing relevant factors here – the seeds of expertise – will lead to greater focus, better solutions, and enhanced results.
Now that 2021 is upon us, we encourage you to find your focus and build relevant distinction accordingly. Research can play a vital role—whether qualitative or quantitative, perceptual or behavioral. Because without delving into the detail, without segmentation and differentiation, you may very well be left with aggregate generalities that reduce very disparate parts to a single, inaccurate whole.
Neil Goldman, Ed.D. is President of Goldman Consulting & Strategy (GCS, Inc.), an organizational development and research firm that has helped over 500 credit unions find focus, build relevant distinction, and facilitate positive change. Ngoldman@GCSfirst.com. 310-968-2007.