Learning from Starbucks

By Christian Mullins

Many of you probably know that the ubiquitous coffee shop Starbucks is closing 600 stores throughout the United States. While there are several reasons aside from Starbucks’ official statement that ‘close proximity of our stores has caused Starbucks to compete with itself’ for the closures, I read an interesting article at Business Week Online theorizing that Starbucks grew too rapidly for its own good, destroying their brand value. Their quick expansion took away from the ‘experience’ of each visit, degrading Starbucks’ neighborhood feel to a mere chain store. Coupled with an ever expanding menu, customers were herded through as quickly as possible, forcing Starbucks to subsist solely on the quality of their coffee with the predictable result: many Starbucks customers looked for, and found, more appealing options.

Many credit unions are heading down the same path. Unfortunately, many conversations I’ve had with employees and members of larger credit unions confirm the inevitable: once a credit union reaches a certain size, they stop feeling like the credit union they remember and feel like (dare I say it) a bank.

Let’s be clear. Growth is neither bad nor undesirable; in fact, it’s lack of growth that creates long term trouble for CUs, but the real issue is how that growth is handled. Some credit unions fight tooth and nail to maintain their ‘credit union’ feel, but many do not. Lack of training (continued or otherwise), regular turnover, and a fundamental shift in priorities are the main culprits afflicting credit unions these days, and to their peril. While some members don’t notice or don’t care, others do, and more often than not CUs don’t realize their shortcomings until too many members close their accounts.

Fortunately, it’s never too late to remedy a credit union’s apathy towards their quality of service (or quality of employee). Dedicated training (not necessarily including a dedicated trainer) is a must and effective employee retention plans can be found all over the internet. While improving the quality of existing employees may have an impact on the bottom line, the cost of regularly hiring new employees may be higher still.

Very few members expect their credit union to operate the same way it did when it was a one employee shop open four hours a day, but whether members experience your credit union face to face, on the telephone, or online, they do expect to receive quality service, answers to their questions, and quick resolution to any problems that may arise. If they can no longer expect minimum service standards (and those are minimum standards), it’s only a matter of time until your members find another financial institution that meets their needs, credit union or otherwise.