While COVID-19 and its variants continue to cause trouble, we may finally be wrestling this pandemic to the ground. Based on statistics available through the CTV Vaccination Tracker, at July 20 over 79% of eligible Canadians had received at least 1 dose of the vaccine while close to 58% of the eligible population had been fully vaccinated. I don’t want to jinx things but I think it’s fair to say that the light at the end of the tunnel is getting closer.

But what does the end of the pandemic mean? A return to normal and the way things were? Definitely not. With few exceptions – the Credit Union sector included – consumer behaviours have fundamentally shifted and will continue to change in the new normal. From hybrid work structures to accelerated digital adoption, the pandemic has prompted new behaviours that will impact all sectors including credit unions. Examples include possible reduction in branch traffic that can impact staffing, digital migration requiring new capabilities and products, huge increases in savings and deposits that will require retention strategies, etc. Combine these pandemic-related changes with macro-level changes such as an aging and increasingly diverse population, and the imperative is clear: credit unions need data-driven insights to manage member change and fuel their business strategies.

Building the Right Foundation – Who, What, Where

Member-focused strategies need to start with the right foundation, one that credit unions can confidently build on as they evolve their member journey. We believe that this foundation is comprised of three key building blocks: an understanding of who are my members and what they look like; knowing what my potential for growth is within my membership based on their value; and a view to where the opportunities are for product growth within my membership and within my market.

Who – The Case for Member Segmentation

The path to creating an excellent member experience and deeper engagement begins with understanding who your members are. Without this base knowledge, you’re like Alice in Wonderland where the Cheshire Cat points out, “If you don't know where you are going, any road will take you there.” In other words, you cannot really plan or implement an effective member strategy.

The better alternative is to leverage available data sources to develop a robust picture of your members (and potential prospects) that includes key demographics, consumption and financial behaviours, media preferences, attitudes and values, and more. Environics Analytics’ PRIZM^® segmentation system is an easy, informative and actionable framework that provides this information, helping to build member segments that are unique to your organization and market at the postal code level.

Look up your segment! https://prizm.environicsanalytics.com/

What’s the payoff?

• These segments can be the common lens and basis for understanding members throughout your organization
• The custom member segments provide an easy method of identifying and categorizing existing and new members
• Segment-based insights can be used to create more relevant communications, products and experiences
• Understanding your members at a segment level can uncover high-potential member acquisition opportunities in your trade area

What – Prioritizing Member Growth Potential

While market-based segmentation provides the cohesive view of members that is vital for growth overall, it is important that credit unions focus their limited resources on the right opportunities. That is, moving beyond the “one-size fits all” approach to creating more tailored member experiences depending on their potential for growth.

Every member is important and should be treated as such based on their current value to the organization. But identifying segments with higher potential value can allow you to develop focused growth strategies, prioritize your marketing efforts and deploy resources in the most efficient and effective way.

At Environics Analytics, we have used our national-level financial data and analytics expertise to develop a value-based segmentation model that helps credit unions look at their membership based on current value vs. potential value. This in turn allows those organizations to match service levels and engagement strategies to members’ needs and potential.

What are the additional benefits?

• Being able to develop distinct and focused strategies for member retention and growth
• Quantifying the growth opportunity
• Increasing operational efficiency by more effectively allocating resources
• Market-based segmentation and value-based segmentation work hand-in-hand to deepen member understanding, enhance the member experience, and increase satisfaction

Where – Calculating Market Potential

Beyond having clear and actionable member insight, and as well as knowing the current and potential value of members, credit unions generally want to understand their position relative to the overall market. In other words, what is their market penetration, market share and share of wallet in their trade area and for a given portfolio of products. Having this information can provide the intelligence to know where the growth opportunities lie – both in terms of their performance and the market potential – and the size of the prize.

While credit unions have always had the numerator in this particular equation (i.e., the percentage and value of their member holdings by product), the historical challenge has been understanding the denominator, or product holdership for the entire market that they operate in. That is, they have lacked the benchmark to accurately gauge their share and the potential opportunity.

Enter WealthScapes, Environics Analytics’ flagship financial database. Built using authoritative data and sophisticated modelling techniques, WealthScapes is the most comprehensive, national-level database available (also available at local levels of geography) for information on the assets, liabilities and income of Canadians. As such, it provides the optimal benchmark for credit unions to assess their product penetration and market/wallet share, at the category or individual product level within their footprint.

Which means:

• You can calculate how many customers you have vs. general population in the market
• You can determine your market penetration by total dollars
• You can evaluate penetration by product such as deposits, credit cards, mortgages or investments
• You can analyze with your segments and understand not only product holdership by member segment and by branch location but who is in your market and who you want to (or should) target

Data-Driven Strategies For Better Member-Centric Experiences

Canada’s population is dynamic and diverse, and consumer behaviours are changing. More than ever, credit unions’ business strategy hinges on using data-driven insight to ensure successful outcomes. Whether your focus is member acquisition, retention or growth, as well as delivering an exceptional member experience, building the right foundation can ensure that you put your credit union on the right data-driven journey.

About Evan Wood

Evan Wood is EVP, Chief Strategy Officer and Practice Lead for Financial Services at Environics Analytics. With his team, Evan helps Banks, Credit Unions, Fintechs, Fund Companies and others achieve their business objectives by delivering actionable customer and market insight grounded in data and analytics.

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