What Business Results Can You Expect From Creating Engagement?
Understandably, one of the big questions that arise when banks and credit unions consider brand development initiatives is, “how are we going to know if it worked, and how will it impact our bottom line?” When you strengthen your brand and create greater engagement with employees and customers/members, you can expect certain outcomes. Here’s an overview:
Growth doesn’t necessarily mean increasing size…at least at first
Contrary to popular belief, creating greater brand engagement is not primarily a ploy to grow the size of your bank or credit union. Engagement is about sincerity and depth of relationships, not quantity of them. If this makes you nervous or unhappy, remember the other side of this coin: a smaller number of deeper relationships can deliver the same net income as a larger number of weaker relationships…and with far fewer headaches and associated costs. Plus, with engagement, when you do grow in scale, you will do so with stability based on strong relationships.
Improved margins from better customer/member relationships
Improving the depth and quality of your customer/member relationships increases your profitability, for several key reasons. First, you’ll experience lower attrition among good-fit customers, due to their increased loyalty. Similarly, you’ll see attrition from bad-fit customers who no longer feel comfortable banking with you―which is great. Your remaining, engaged customers will be less price sensitive on both deposits and loans, resulting in higher margins. You’ll also get a much increased share of their wallets, and they will be far more likely to generate word of mouth referrals.
Engaged employees lead to decreased operating costs
It’s no secret that when your employees are engaged, your whole company is healthier. You’ll enjoy lower employee turnover and associated costs, as well as greater performance and efficiency…often meaning you don’t need as many staff members. Last but certainly not least, you’ll enjoy a staff with a decreased sensitivity to compensation, meaning you can offer salaries at or slightly below market.
Initial customer/member turnover
When you introduce a distinct strategy to increase engagement, you can expect to lose a few customers/members. Not only is this natural, it’s desired―that means you’ve created something distinct and worthy of a reaction. One of your goals with engagement is to help consumers determine if they are a fit with your brand. Once you’ve made that more clear, you should expect a small percentage of customers/members will decide your brand is not for them.
Initial employee turnover
Similarly, introducing a distinct engagement strategy will help employees who are no longer a good fit see that they are better off at another employer. And again―this is a good thing. By making your brand clear to them, you’ve created a situation that exposes those who are not truly engaged.
Simply put, engagement improves your financial performance and stability by improving the quality of your customer and employee base.