Growth Strategies: Retention is the New Acquisition

Growth Strategies:
Retention is the New
Acquisition

Your presenter:
Denise Wymore

When the going gets tough....

The tough don’t cut back on marketing!!!

But you should take this opportunity to STOP
doing what doesn’t work....

"Stalking" is defined as repeated and persistent
unwanted communications and/or approaches that
produce fear in the victim. The stalker may use such
means as telephone calls, letters, e-mail, graffiti
and placing notices in the media.

"Stalking" is defined as repeated and persistent
unwanted communications and/or approaches that
produce fear in the victim. The stalker may use such
means as telephone calls, letters, e-mail, graffiti
and placing notices in the media.

(a.k.a. Marketing)

Marketing Media Timeline:

1990

2009
1924
1941
1704
1984
1876

1681

The price tag for all this
stalking?

stalking?
$250.00 per new member*

stalking?
$250.00 per new member*

*Sheshunoff - it costs community ﬁnancial institutions approximately $250-$275
to acquire a new member/customer

The PFI myth. . .

The average customer has 1.56 -
2.2 relationships with their PFI

The PFI myth. . .


Typical households have as many
as 8 different ﬁnancial service
providers.

The PFI myth. . .


Typical households have as many
as 8 different ﬁnancial service
providers.

First year attrition rates are as
high as 25%!

Banking is an errand.
I get in, I get out, no one gets hurt...

...I am satisﬁed.

We asked the wrong question:

On a scale from 1 - 7:
How satisfied are you with the
credit union?

Comments:

Loyal members do three things:

Loyal members do three things:

1. Buy more from you. (repeat business)

2. Market for you! (tell their friends/co-workers)

3. Tell you how to improve your business
(“I’ve been a member since....”)

Instead of “going after” your members
let’s try listening to them.

Instead of “going after” your members
let’s try listening to them.

By asking the ultimate
question....

Net Promoter asks the “ultimate” question:

Net Promoter asks the “ultimate” question:

WHY did you
answer the way you
did?

"On a scale from 0 - 10...
How likely is it that you would
recommend the Credit Union to
a friend, family member or
colleague?"

“You can’t grow a business unless you treat people so well
that they come back and bring their friends.”
- Fred Reichheld, The Ultimate Question

Net Promoter Score Sheet*
GOAL: protect proﬁts by protecting our word of mouth

*Source: The Ultimate Question: Driving Good Proﬁts and True Growth by Fred Reichheld


Detractors = 0-6
Unhappy customers trapped in a bad
relationship



Passives = 7-8
Satisﬁed but can be easily wooed by the competition
Detractors = 0-6
relationship



Promoters = 9-10
Loyal enthusiasts who keep buying and
urge their friends to do the same
Passives = 7-8
Satisﬁed but can be easily wooed by the competition
Detractors = 0-6
relationship



P - D = NPS


NPS Leaders in the US

Average American company sputters along at 20%


USAA = 82%



USAA = 82%

COSTCO = 79%



USAA = 82%

COSTCO = 79%

Apple = 79%


NPS leaders do crazy things:

1. Pay their people too much.
2. Fire customers.
3. Pay employees to quit.
4. Don’t try to appeal to everyone.
5. Charge the most in their category.

COSTCO and NPS
Score = 79%

45 million members.

Sales per store are almost twice of nearest competitor
Wal-Mart’s SAM’S CLUB

Very little money spent on advertising.

Low turnover and long tenure boost productivity, reduces costs.

Business leaders in all industries are
adopting Net Promoter

Business leaders in all industries are
Business leaders in all industries are adopting
adopting Net Promoter
Net Promoter

The Credit Union
Average

SOURCE: Filene Research Institute and Satmetrix

The Credit Union
Average
54.3%
SOURCE: Filene Research Institute and Satmetrix

Credit Union Membership in the US

87500 190625 293750 396875 500000

2005

2006

2007

2008

# of New Members

Credit unions were beginning to steal
members from each other!

Perception vs. Performance Gap

Perception vs. vs. Performance Gap
Perception Performance Gap

100%

80%
Percent of Companies

60% 80% 8%
Companies that Companies
believe they whose
40%
provide a customers
superior agree
experience
20%

0%

Believers Achievers
Source: Bain & Company

The 8% of Achievers Vastly
Outperform their Competition

The 8% of Achievers Vastly
The 8% of Achievers Vastly Outperform their
Outperform their Competition
Competition

Average annual real revenue growth Average annual real net income growth

20%
19% 10%
9%
8%
15%

6%
10%
4%
3%
5%
2%
2%
0% 0%
Non-Achievers Achievers Non-Achievers Achievers
Source: Bain & Company

Unlucky.

SOURCE: Satmetrix

The Bank Average
“Banking had an average NPS of approximately 15%, with USAA leading at more
than 100 points above the sector’s laggard, Citigroup.”

SOURCE: Satmetrix - Spring 2009 report

The Bank Average
“Banking had an average NPS of approximately 15%, with USAA leading at more
than 100 points above the sector’s laggard, Citigroup.”

15%
SOURCE: Satmetrix - Spring 2009 report

The Promoter Advantage
Loyalty Economics

4000

3000

2000

1000

0
Have referred Will likely stay

Promoters
Detractors

SOURCE: Satmetrix and Filene Research Study - 2007

Loyalty Economics

7%

And it’s FREE!

93%

Detractors Promoters

“How many friends, family members or colleagues have
you referred to the Credit Union in the last 12 months?”

1,045 members responded
Loyalty Economics

7%

And it’s FREE!

93%

Detractors Promoters

1,197 members were referred.

Is there a correlation between NPS and growth in
a company?

Yes! In a 2003 study based on more than
150,000 customers, we found a very strong
correlation between Net Promoter Scores
and a company’s growth relative to its
competitors. From the airline industry, to
retail banks, to delivery services, to personal
computers, firms with the best NPS
demonstrated superior growth. Companies
that have achieved sustainable growth over a
ten year period have double the NPS of
others.

Hope is not a strategy.

That's also the penalty of expectations. Amazon became
the category leader in online retailing because it set
new expectations in online shopping, and it almost
always meets or exceeds them; its Net Promoter Score
ranking is 36 points above the median in its category.
Category leaders are cultural leaders in business,
sports, non-profits and government. Strategies,
behaviors and some lives are modeled on category
leaders. It's a perk and a responsibility. It's heady
and scary. The cost of reticence is goodwill.

“I believe most CEOs do care--at least strategically--
about having happy users, but wouldn't waste a single
synapse actually thinking about specific ways to make
it happen.”
- Kathy Siera, Creating Passionate Users Blog.

NPS helps you avoid
bad proﬁts.

Bank fees growing more numerous and expensive
AMY REININK Sun staff writer
Published: Sunday, June 10, 2007 at 11:40 a.m.
Last Modified: Sunday, June 10, 2007 at 12:00 a.m.

The fees kept adding up.
First, Sun State Credit Union charged Gainesville resident Karen Soesbe $2 for
coming in more than four times a month. Next came the charge for not
having her transaction slip ready at the drive-through window.
When Soesbe was charged for not using the credit union's telephone
banking system, she decided to fight back, sending an angry letter to the credit
union's president and filing a formal complaint with the National Credit Union
Association.
"I was outraged," Soesbe said. "It's not a lot of money. I know that. But to be
charged $2 just for not having your bank slip at the drive-through teller just
seems wrong."

In Soesbe's case, Sun State abandoned the three fees voluntarily. Sun State President and CEO
Jim Woodward said the decision was based on exit interviews with members leaving
the credit union, and that the move was already in the works when Soesbe complained.

Bad Profits = Profits earned at the expense of a relationship.

Good Profit - Bad Profit



$50 membership fee
to COSTCO with
rebate at the end of
the year on all your
purchases.



$50 membership fee Everything the airlines are doing
to COSTCO with today.
rebate at the end of Charging for:
the year on all your - pillows
purchases. - sodas
- headsets to watch the movie
- checked luggage



$50 membership fee Everything the airlines are doing
to COSTCO with today.
rebate at the end of Charging for:
the year on all your - pillows
purchases. - sodas
- headsets to watch the movie
- checked luggage
Except Southwest
Airlines

Do what you say you’re going to do.

Do what you say you’re going to do.

NPS bridges the gap between what you say you are
going to do and what you are known for doing.

www.denisewymore.com
me@denisewymore.com
http://denisewymore.wordpress.com
denisewymore

Growth Strategies: Retention is the New Acquisition

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