Why Drive a Cohesive Common Bond?

Chain

I recently read a research paper entitled “Social Resilience in Online Communities: The Autopsy of Friendster.” The paper explores thought-provoking findings with regard to the strength of network connections required for online social networks to survive. In a time when many credit unions are calling into question whether any bond between members and credit union exists, a look into the problems of weak social connections and their impact on “social brands” is worthwhile.

The paper itself is what you would expect a research paper to be – jargon filled with a fair collection of equations, charts, and tables. But there is one particular, plain-English paragraph worth noting:

A characteristic property of any online social network is the presence of influence among friends. In particular, individual decisions regarding participating or leaving the network are, to a large extent, determined by the number of one’s friends and their own engagement. Therefore, users leaving a community have negative indirect effects on their friends. This may trigger the latter to also leave, resulting in further cascades of departing users which may ultimately endanger the whole community.

Now consider this: While some members of the the credit union community have been making the rounds on a sort of a membership growth victory tour, touting the industry’s gains in new members, the reality is that an average of half of all credit unions decline in membership on a regular basis. Case in point, 3,402 credit unions, or 50% of all credit unions, had negative membership growth halfway through 2013. That isn’t counting those with exactly zero growth.

So… what does this have to do with a paragraph excerpt from a research paper on online social networks? When I look at those credit unions enjoying sustained membership growth, there is usually a defined strategy to build a sense of brand community amongst members. By contrast, those credit unions with diminished membership growth usually possess a lack of “connectedness” between members, and between members and credit union.

With regard to credit unions lacking connectedness, it seems most often the result of one of more of the following:

  • The core sponsor has pulled back active support, meaning that the credit union has little active connection to core sponsor employees – especially new hires;
  • The core sponsor has gone away, leaving the credit union with no clearly defined field of membership;
  • The credit union is a community charter, but manages the credit union and its community relationship like it is a single-sponsor.

Two things are important to note here. First, membership growth requires both the addition of new members and retention of existing members. The impact of any one of the situations above is to lessen the strength of relationships between credit union and member/consumer – a circumstance that makes it all too easy for existing members to leave any time change occurs (whether initiated by member or credit union). And much like in online social networks, users leaving a credit union have negative indirect effects on their friends, family members, and co-workers, meaning both a potential for accelerated decline in existing members and lack of referrals for new relationships.

Second, the kinds of credit unions identified in the list above allow outside institutions or circumstances to control the “community” on behalf of the credit union itself. In other words, they are completely at the mercy of others for the creation and nurture of brand connectivity. This is a critical point of failure.

So what is the solution? In the paper, the authors notes that “social resilience acts to limit the spread of such cascades,” with social resilience defined as “the ability of a community to withstand changes.” They go on to add the following:

Changes may cause users to leave, which may trigger further leaves of others who lost connection to their friends. This may lead to cascades of users leaving. A social network is said to be resilient if the size of such cascades can be limited.

It is worth noting that the paper focuses on online social networks, which admittedly is a different animal than credit union memberships. However, for an industry historically focused on service to individuals possessing a common bond that ties them to others of similar background, the idea of creating “social resilience” in membership (both active and potential) is a strategy worth exploring. So how can it be done?

In my travels as a strategic planning session facilitator I have seen quite a few noteworthy examples of strategy that I believe drive to a kind of social resilience. For example…

  • A credit union offering a product truly unique to its membership’s work effort;
  • A credit union aggressively working with its members to improve credit profiles and scores;
  • A credit union basing its product and service “jargon” on specific membership group characteristics;
  • A credit union with a visual identity reflective of its notable geographic surroundings.

These are very basic examples, but the execution of these strategies has led to defined connections to specific markets – including a somewhat subtle emergence of “peer pressure” for “community” members to participate in the credit union’s solutions. Even better than the connections established via an online social network, this pressure leads to establishment of contractual relationships versus fleeting social connections.

Regardless of whether you see or buy in to the relevance of this research paper in the context of credit union strategy, you can at least acknowledge that driving cohesive common bonds between groups, and between a group and a brand, lead to lasting relationships. The alternative strategy, leveraging only single or a few loose-knit connections, is a certain path to friendlessness.

To read the research paper yourself, visit http://arxiv.org/pdf/1302.6109v1.pdf

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Photo Credit: “Chain” by BotheredByBees is licensed under CC BY 2.0

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