# Loyalty Is The Most Powerful Currency: What We Can Learn From Credit Unions
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-01-11
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Building Customer Loyalty: Lessons from Credit Unions for
Meta Description: Discover how to leverage loyalty to strengthen customer relationships and beat digital disruption in your business.
URL: https://financedigest.com/loyalty-powerful-currency-can-learn-credit-unionshtml

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**_Vinod_** _**Muthukrishnan**. Co-founder & CEO of Cloud Cherry._

Loyalty is the key component between a company with marginal growth and a company that is catapulted into the market. After an initial frenzy to acquire as much mindshare as possible in our modern [digital economy](https://www.financedigest.com/feature-africas-mobile-money-taxes-risk-driving-poor-out-of-digital-economy.html "FEATURE-Africa’s mobile money taxes risk driving poor out of digital economy"), organizations of all types are now settling into the realization that fewer quality customers can significantly improve the bottom line, much more than a lengthy but shallow list of followers ever will.

The traditional model of [credit unions](https://www.financedigest.com/credit-union-loans-in-high-demand.html "Credit Union Loans in High Demand") in the United States is a good example of the value of loyalty. Credit unions have long benefited from building loyal communities because the whole ideology behind these institutions is a community of people helping each other out. That’s why credit unions have members and not [customers – this loyalty](https://www.financedigest.com/the-problem-with-measuring-customer-loyalty-and-how-to-overcome-it.html "The problem with measuring customer loyalty; and how to overcome it") has its own ripple effect, not just by lowering churn and acquisition rates, but also improving the lifetime value of the member.

So how can [fintech companies and traditional banks tap into the credit union model to build greater](https://www.financedigest.com/brexit-the-risks-to-the-city-and-fintech-have-never-been-greater.html "BREXIT: THE RISKS TO THE CITY AND FINTECH HAVE NEVER BEEN GREATER") strength in their customer base and fight against the ever-present threat of digital disruption?

**Don’t Forget Your Roots**

Credit unions have always been a member-first culture. They significant focus on treating their [customers with great care](https://www.financedigest.com/listen-care-share-ofwats-latest-report-on-the-water-industrys-handling-of-customers-during-the-pandemic.html "Listen, Care, Share: Ofwat’s latest report on the water industry’s handling of customers during the pandemic"), deliver amazing member experiences and engage with them passionately. This focus comes with an unspoken recognition that they [can’t compete with the larger banks](https://www.financedigest.com/why-banks-cant-adopt-digital-identities-fast-enough.html "Why Banks Can’t Adopt Digital Identities Fast Enough") on services, technologies and sometimes even cost – but they can beat them hands down at fostering relationships.

Engendering that kind of loyalty starts with building human relationships. A [person will go out of his or her way](https://www.financedigest.com/six-ways-to-prepare-for-a-personal-finance-crisis.html "Six ways to prepare for a personal finance crisis") to do shopping at a store where they have gotten to know the salesperson, for example. To reach that point, however, you [must reorient your focus around your customer](https://www.financedigest.com/strong-customer-authentication-must-be-adopted-to-make-open-banking-a-success.html "Strong Customer Authentication must be adopted to make open banking a Success"). For every decision, ask ‘how is this benefiting my customer base?‘ ‘is there a better way to do this?’ Call it an obsession, but it is needed.

**Give Employees Freedom**

In order to build a loyal community of customers, you need to allow your [staff the freedom to make best practices decisions in keeping customers](https://www.financedigest.com/mcdonalds-makes-masks-mandatory-for-all-customers-staff.html "McDonald’s makes masks mandatory for all customers, staff") happy. Within reason of course, but when employees have the ability to make educated decisions on the fly, geared toward an immediate need, they can be your most valuable asset in securing long-term, loyal relationships.

Your organization can create actionable [steps that will empower employees to more readily engage customers and build](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW") a personal rapport. It is crucial [top management](https://www.financedigest.com/the-top-5-microsoft-365-challenges-and-how-to-manage-them.html "The top 5 Microsoft 365 challenges and how to manage them") commits to this policy and ensures it is implemented as a practice at the frontline level. Having employees who know customers by name or – even better – customers who know employees by name, is business gold.

**Make Smart Hiring Decisions**

The right customer-facing staff is important, as our digitally-savvy [world has made](https://www.financedigest.com/in-a-stadium-of-their-own-migrant-workers-say-their-sweat-made-world-cup-happen.html "In a stadium of their own, migrant workers say their sweat made World Cup happen") each of us highly sensitive to interactions that don’t feel genuine. Foster a community where your employees feel passionate about your culture, your values and the products and [services you offer](https://www.financedigest.com/barclays-sets-up-taiwan-subsidiary-to-offer-brokerage-services.html "Barclays sets up Taiwan subsidiary, to offer brokerage services"). This in turn creates more genuine representation of your brand.

Assess whether your staff is empathetic and kind? How do they initiate conversations and handle frustrated and angry members? What kind of words do they use while conversing with customers? Your frontline often ends up being the difference between a ho-hum transaction and a bright spot in someone’s day. That’s the subtle nuance credit unions have cornered the market on, and one that breeds lasting loyalty.

**Look Beyond Your Four Walls**

To [successfully build](https://www.financedigest.com/building-a-successful-enterprise-app-and-the-pitfalls-for-getting-it-wrong.html "Building a Successful Enterprise App (and the pitfalls for getting it wrong)") a community-based business model like your local credit union, it helps to get to know the community. Studies show people “like” credit unions and community [banks more than national](https://www.financedigest.com/swiss-national-bank-raises-rates-says-bank-crisis-stopped.html "Swiss National Bank raises rates, says bank crisis stopped") chains, in large part because people like having a relationship with their financial institution – one that goes far beyond the impersonal interaction they usually have in large banks.

To [build a loyal community base its imperative to be a part](https://www.financedigest.com/ford-to-invest-around-300-million-to-build-electric-car-parts-at-uk-plant.html "Ford to invest around 0 million to build electric car parts at UK plant") of the community you serve. Instead of focusing on nationwide marketing campaigns or looking for customers anywhere and everywhere, you will [reap far greater benefits](https://www.financedigest.com/inflation-trade-nestle-reaps-benefits-from-higher-prices.html "Inflation trade? Nestle reaps benefits from higher prices") by honing in on your surrounding community and building from the branch out rather than from the top down.

If you think of your customer as King Midas, then loyalty is the special magic that [allows him to turn](https://www.financedigest.com/total-allowable-catches-tac-and-fishing-quotas-across-the-world-turning-favourable-for-the-global-mackerel-market-sales.html "Total Allowable Catches (TAC) And Fishing Quotas Across The World Turning Favourable For The Global Mackerel Market Sales") everything he touches into gold. Loyalty is the most [powerful currency of our on-demand economy](https://www.financedigest.com/younger-chinese-are-spurning-factory-jobs-that-power-the-economy.html "Younger Chinese are spurning factory jobs that power the economy"), and looking back at the golden era of credit unions yields valuable insight into how to tap into those practices that turn a one-time user into a lifelong brand member.


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