August 04, 2004

Wescom Credit Union (Pasadena, Calif.; $2.6 billion in assets) relies upon the goodwill of its members in order to thrive. Regular feedback also helps, which is why it issues 2,000 surveys per week among its 215,000 members. Along with questions about member experiences at the teller window and the ATM, each survey asks a critical question: "Would you recommend our institution to a friend or a coworker?"

According to Bain & Company's Frederick F. Reichheld, that's the single most important question for assessing customer loyalty in just about any industry. "The key is to get your customers to come back for more and to tell their friends - that drives cash flow," said Reichheld, speaking at the recent Forrester Finance Forum 2004.

Indeed, Wescom places extremely high importance on that single metric. "People's incentives and rewards are based heavily on how that value has been improving and increasing," says Rob Guilford, senior vice president for information technology at Wescom Credit Union.

On a scale of 1 to 5, Wescom currently ranks at a 4.75, up from 4.5 when Guilford joined the organization about seven years ago. "We made pretty big strides when we first increased our focus on this number," he says. "Now we're picking up one, two, three basis points a year."

As Wescom comes closer to across-the-board excellence, each incremental increase in customer satisfaction involves a harder-fought battle. But what's it worth to the bottom line to have one additional basis point in a customer satisfaction rating? "Those are difficult discussions, because it's not like an ROA or an ROE," admits Guilford.

But as a credit union, Wescom focuses on performance rather than on shareholder value. "We're driven much more on driving service levels while still having an adequate return to the bottom line," Guilford says. "Our mission statement is to exceed our members' expectations in everything we do."

To achieve excellence in measuring service levels, Wescom invested in systems to support data-gathering and distribution for its survey results, which had previously been done by hand. "The data was too much delayed and too labor-intensive," Guilford relates.

The solution was workflow technology from FileNet (Costa Mesa, Calif.), which already had been the main repository for Wescom's scanned corporate and customer records. The image repository links to the credit union's core savings and loan systems from Symitar, a subsidiary of Jack Henry & Associates (Monett, Mo).

Now, FileNet's workflow solution scans in surveys, tabulates the results and then makes those results available immediately, online, to the appropriate people. Furthermore, the software ensures that members who have requested a callback receive one and that problem situations are addressed in a timely manner. "It took what was a very intensive and slow process and allowed us to layer in our workflow process," Guilford says.

Other employees at the credit union have taken notice of the improved survey data and are now looking for improved workflow solutions in areas including mortgage lending, consumer lending and indirect lending. "We have a lot of managers now coming out of the woodwork," Guilford says.

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Scotiabank (Toronto) - Driving compensation and sales approaches using an integrated view of its business customers.

Security National Bank (Laurel, Neb.) - Setting pricing strategy and service levels using customer profitability metrics.

Pacific Capital Bancorp (Santa Barbara) - Making data available anywhere it's needed in the firm with minimal effort, using a data virtualization layer.

First Fidelity Bank (Oklahoma City) - Improving customer service in a multi-branch network using cross-channel, integrated CRM.

Northstar Financial (Bad Axe, Mich.) - Building a de novo bank network from the ground up, based on customer-centricity.

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