Insanely Great

I recently received a message from one of our gnomes, asking if anyone could give a figure for the average cost to acquire a new member, because her CEO would like to know. The following diatribe is my answer:

Forgive me for being blunt, but your CEO has it all backwards. The very nature of the question is flawed. I believe that if you want better answers, ask better questions. This question assumes that a member is someone out there who would not like to join the CU or is unaware of the CU, but would join if he/she could be convinced through advertising. If you could just spend enough money, they would come in through the door. But we don’t really believe that members can be “acquired” do we? (that sounds like buying a member to me.) In today’s world, they certainly can’t be convinced because of advertising.

Even if a CU has an MCIF, how would they calculate the cost of “acquiring” a member? Would you take the amount of money spent only on advertising for new members to join, and divide that by the total number of new members, minus the members who joined because of referrals? (And BTW, the number of new members who join because of advertising is very small. I have yet to hear a single member in a focus group say that they joined because they read an ad in the paper or saw a billboard or tv commercial.) What about attractive exterior signage or landscaping your branch? That’s potentially attracting some new members, but would you count that cost in your calculation?

The actual cost to acquire the RIGHT member: free.

The cost to get better as an institution: not so free. But that’s what you are doing anyway, right? So there’s no incremental cost to gaining new members per se.

The RIGHT members… those who can benefit from your products and services….. well, they will seek you out if you are offering something of UNIQUE value to them.

Let’s use a great brand as an example. Apple. (yup, one of my favorite brands, and I’m proud to say that!) Apple doesn’t think about how much it would cost for them to acquire me as a customer. Instead, they think to themselves, “how could we make our current products, and how we can we develop new products, that are INSANELY GREAT. Not just good, not just really good, not just great, but INSANELY GREAT. How can we make them simple and easy-to-use? How can we create a flawless, integrated experience for our users? How can we make our products both look great AND perform great AND be REALLY easy-to-use? How can we be different and BETTER than the Windoze clones?”

I purchase and use Apple computers not because they look cool (though that’s a bonus), not because of their 1984 Super Bowl commercial (another bonus), not because they are different than all the rest (yet another bonus), not because of any brochure (I don’t think those exist) or any other advertising (though the iPod ads are fun!). Nope, it’s for one reason: Their products KICK A$$. They let me focus on getting MY work done, and not on trying to keep the computer running. What’s more frustrating than not being able to get your work done because your computer is down, virus-infected, crashing or just won’t work?

So a better question for the CU becomes: how can we differentiate ourselves to be better and more unique, more relevant to our membership, with better products and service? And when you answer that question, and put it into action, more new like-minded members will seek you out.

But this is just what I think! I’d love to hear what everyone else thinks!


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