Beyond Due Diligence: The Importance of Vendor Product Comparisons

Is your credit union offering the very best services to your members?

When it comes to due diligence, credit unions are intimately aware that financial stability and ethics both play an important role in the reliability and trustworthiness of a third party member service vendor. Third party vendor due diligence has become vitally important to credit unions in terms of protecting member assets, controlling reputational risk as well as adhering to all aspects of consumer laws, rules and regulations. However, traditional vendor due diligence doesn’t necessarily indicate how competitive a particular service is within the marketplace. It is equally important to conduct a side-by side comparison of the competing services available in the credit union space to truly understand where a product stacks up against the competition.

 

Exploring side-by-side vendor comparisons

Beyond the importance of assessing the vendor’s due diligence categories (financials, AM Best Rating, ethical practices etc.,) credit unions should be concerned with vendor service, ease of use to the member, cost, profitability and whether the activity is critical to their mission. Because every member benefit takes a focused and consistent effort from the entire organization to be successful, it is imperative that CUs are truly investing their time in the right benefit and vendor for their membership.  Insurance Trust has seen many Maine credit unions grow exponentially in the areas of member satisfaction and non-interest income revenue by making product comparisons an integral part of their due diligence process in conjunction with reviewing internal processes and staff training.  It is our commitment to helping credit unions to facilitate these initiatives by providing third party vendor research and side-by-side comparisons specific to the ancillary insurance options and credit union member services that we provide.

Finding an apple among oranges

Though each member service is unique, they all have commonalities that can be compared. including cost, coverage, ease of use, customer service/claims support and an evaluation of costs involved with monitoring and support of the third party after the contract is implemented. Above and beyond the features and benefits of a particular product, it’s helpful to understand what is most important to members. Asking for feedback from those using the services is a key element to learning where a credit union is doing well and where the areas of improvement may be. Member surveys are a great place to capture this information and can be used as a tool to drive actionable change. According to the Member Intelligence Group (a consulting firm specializing in credit union member research), credit unions “must focus on reducing member effort in order to improve satisfaction, deepen loyalty, and build promoters”.  The firm also cites convenience as one of the most important factors to improving member loyalty. It ultimately boils down to measuring how often members are utilizing a benefit and using feedback to gauge satisfaction. This learning process can provide the insight to make improvements to internal processes and conclusion of which vendor/s are the best fit. When we improve the member experience, an opportunity for growth is created that helps to enhance both member loyalty and income for the credit union.

The empowering result is that credit unions have a unique advantage over larger financial institutions in their ability to remain agile by reviewing member services and making improvements based on due diligence and vendor comparison with the best interest of credit union members in mind.

 

[author] [author_image timthumb=’on’]https://www.insurancetrust.us/wp-content/uploads/sites/2/2015/12/Seth.jpg[/author_image] [author_info]Seth McClellan, Marketing Director – Insurance Trust[/author_info] [/author]