The Credit Union Cost Per New Member Performance Index

Subscribe Now!

Stay on top of all the latest news and trends in banking industry.

Untitled(Required) recently published a couple of blog posts which contained interesting statistics regarding credit unions’ member acquisition costs and membership growth.

I thought it would be interesting to take some of the data and construct a new performance metric for credit unions to use.


The first post ranked states by their aggregate cost per new member, and included the state’s overall membership percentage growth (for the 12 months ending 9/30/2012). Kudos to North Carolina credit unions for only spending $142 to acquire a new member, $300 less than the national average.

The second place state, Alaska, had an acquisition cost per new member $32 larger than NC’s number, but achieved nearly twice the growth, at least in terms of percentage growth.

To see which state really performed best,  I constructed the Credit Union Cost Per New Member Performance Index by dividing the percentage growth by the acquisition cost per new member (a high growth percentage is good, a low cost per member is good, so a really large score is good).

The calculated score produces a number which is kind of meaningless, so the best way to compare results is by indexing the score against the overall US, which grew credit union membership by 2.7% in the time period under question here.

The result is that although NC had the lowest cost per new member ($/NM), three other states (AK, ID, VA) outperformed NC by driving a greater degree of growth out of the money they invested in new member acquisition.

State $/NM  % Chg    Score    Index
NC    $142  3.19%    0.0225    368
AK    $174  6.26%    0.0360    589
ID    $208  5.88%    0.0283    463
VA    $230  6.02%    0.0262    428
MS    $238  3.63%    0.0153    250
TN    $248  4.19%    0.0169    277
UT    $260  4.40%    0.0169    277
OK    $267  4.59%    0.0172    281
WA    $276  5.34%    0.0193    317
NM    $280  4.07%    0.0145    238
US    $442  2.70%    0.0061    100

Source:, Aite Group


The second blog post contained stats on the top 10 states by membership growth. Between this second list and the first, eight states were included on both lists (NC and MS fell off. The data for those states might be available publicly  somewhere, but frankly, I’m way too lazy to try and find it).

By looking at absolute growth, we can calculate what the credit unions in each of these eight states actually invested to acquire new members. Overall in the US, credit unions spent $1.1 billion to acquire 2.5 million new members (#NMs). That works out, with 7,031 credit unions, to be a little more than $157k per credit union.

In Alaska, although the credit unions in that state had the highest Performance Score, they spent the most per credit union to acquire the new members that they did. The 12 CUs in the state invested nearly $7m — roughly $580k per credit union — to acquire the ~40k new members they picked up over the past four quarters.

Virginia, with nearly 180 credit unions, spent almost $100 million to acquire ~434k new members. That’s about $560k per credit union.

Among the eight states, Tennessee spent the least (per credit union) at just $110k per institution.

State  #CUs   #NMs      Avg/CU   $ NM      $NM/CU
AK     12     40,025    3,335    $6.96m    $580.4k
ID     52     32,570    626      $6.77m    $130.3K
VA     178    433,782   2,437    $99.77m   $560.5k
TN     171    75,868    444      $18.82m   $110.0k
UT     82     75,882    925      $19.73m   $240.6k
OK     71     48,306    680      $12.90m   $181.7k
WA     109    149,333   1,370    $41.22m   $378.1k
NM     50     27,841    557      $7.80m    $155.9k
US     7,031  2.5m      356      $1.1b     $157.2k

Source:, Aite Group


What this demonstrates is that, even if your cost per acquisition is towards the low end of the range, you may still under-perform the market if you don’t sufficiently invest in marketing.


Another question that came to mind was: How does all of this compare to banks?

To answer that, I turned to the expert on the topic, Serge Milman from Optirate. Serge pointed me to a number of studies (one of which was my own from a few years back that I had forgotten about) which have estimated banks’ cost of new customer acquisition.

The numbers are generally all over the map. One study puts the number at about $350, but that appears to include both banks and credit unions. Serge also cited a study from Brintech, Cass Bettinger & Associates and Amalfi Consulting from November 2009 which estimated the cost at $143 for online acquisition and $328 for branch acquisition.


So I don’t know what the comparable bank number is for cost per customer acquisition. But if the overall industry is at $350, and credit unions are at $442, then that’s not good.

If it costs 26% more to acquire a new member than what it costs a bank to acquire a new customer now, what’s it going to be when the mistrust and negative sentiment towards big banks fades (and it is going to fade)?

But you should calculate the Cost Per New Member Performance Index for your credit union and see how your CU stacks up.

This article was originally published on . All content © 2023 by The Financial Brand and may not be reproduced by any means without permission.