Conference 7.286::dcu

870.0. "Analysis of DCU Survey (see note 364)" by WRKSYS::SEILER (Larry Seiler) Wed Aug 24 1994 14:05

Folks,

I got a copy of the DCU phone survey to find out what it REALLY says about
checking account fees.  The actual data DOES NOT SUPPORT our relationship
pricing program!  Also, some conclusions drawn in the executive summary and 
in the report itself ARE NOT supported by the questions that they asked!

The following is my analysis of the questions on checking account fees,
things people want to change, members' understanding of the relationship
pricing program, and the apparently biased nature of the survey itself.


			CHECKING ACCOUNT FEES

Question 27:  Respondents were asked to ASSUME that maintaining low 
	balance accounts costs money and were told that some members 
	"maintain accounts with small balances for convenience reasons".  
	They were not told whether these accounts cost a lot or a little.

Interpretation:  The executive summary says:  "When presented with the 
	cost generated by maintaining a low balance checking account, 67.8% 
	of the membership agreed that the member involved should be asked 
	to cover the COSTS INVOLVED."  [Capitalization is mine]
        
Reality:  The incremental cost of a low balance account with no activity 
	is $0.42 per month.  This number comes from Chuck Cockburn via
	Paul Kinzelman.  Processing checks also costs money, of course, 
	but Paul hasn't yet gotten that cost from Chuck.  The average
	cost per account is apparently $3.93/month, but presumably 
	that cost is related to the number of checks written.  I don't 
	think it's equitable to allocate an average check processing 
	charge to each account -- that would cause people with low 
	balance/low activity accounts to subsidize the others!

	Those who are charged a checking fee have to pay $4.00/month,
	not $0.42/month.  How do you think people would have replied to
	the question "do you think those with low balance accounts should 
	be charged MORE than the cost of maintaining their account?"
	How do you think they would have responded if they really had
	been "presented with the cost" of just $0.42/month?


		CHANGES IN THE CREDIT UNION

Question 8:  Respondents were asked "If you could change one thing...
	what would it be?"  36.8% said nothing or they didn't know.
	9.3% wanted changes in policies or management the most,
	13.1% wanted interest rate changes, and 7.3% wanted changes
	in fees.  33.5% want changes in various types of services.

Interpretation:  The executive summary says "A very small minority...
	wants changes in the policy, direction and officials" of DCU.
	Those who want changes in fees were lumped in with those who
	want changes in interest rates.

Reality:  In the DCU today, fees are an issue of POLICY and DIRECTION.
	No doubt the survey folks didn't know that, but the BoD does.
	When "fees" are lumped with policy rather than with interest
	rates, policy changes are seen to be the TOP issue for the
	second largest group who want changes at the DCU.  

	No doubt many who want changes want many types of changes.
	What survey results would we see if people had been allowed
	to say *all* of the things that they wanted to see changed?
	The report implies that those who want service or interest
	rate changes therefore don't see policy changes as important.
	Is this accurate?  And see below for another consideration.
	

		WHO KNOWS WHAT'S GOING ON?

Reading through the report, there are a number of areas that are
expounded in great detail -- generally those that seem to support
current policies.  But some significant issues are reported on without
any comment.  E.g., about 3/4 of the people they contacted either didn't
know about relationship pricing or said it hadn't been implemented!

    -	What does it mean that 30% said they would change nothing about 
	the DCU when 73% don't know what changes are being made?  

    -	What does it mean that 85% think that the DCU's communications 
	are credible when 73% apparently don't read DCU's communications?  

The report expounds in great detail about pricing/fee issues, but doesn't 
discuss the result that I think may be the most important of all:  most
DCU members simply do not know what is going on at the DCU!

I got the impression that those who ran the survey knew what the result
was supposed to be -- and that the questions were in some degree designed 
to achieve those results.  The executive summary says (emphasis mine):
"AS EXPECTED, the attitude... that costs should be SHARED (Q7) changed
dramatically if... members would be asked to SUBSIDIZE the cost of
services."  Great, so they showed that people like the word "share" but 
don't like the word "subsizide".  Since the respondents didn't have any 
actual data about costs at the DCU, that's ALL those questions show.


There's more, but why go on?  A cursory reading of the executive summary 
looks like a strong endorsement of the relationship pricing program, but
when you read the questions, it looks a quite different.  The responses
support charging for some services that are perceived to be costly, but 
they do NOT support charging more than the service actually costs.


If you doubt the statements above, you can get a copy of the survey
yourself by going to DCU HQ and asking for one.  Assuming that you live
near DCU HQ, of course.  The deadline for commenting on this stuff in
the DCU notes file is probably midnight August 24th.  I don't think that
commenting on the survey is an election-related activity, but I'm
assuming that Ron Glover will rule that it is, and therefore disallow any
further comment in this forum until the election is over.  Of course,
don't comment in mail or you could be fired.

	Larry Seiler

Larry,

Thanks for taking the time to do the analysis of the survey.  Since I'm about
1500 miles from DCU HQ, I guess I'll never see the survey, unless Chuck wants
to pay my airfare to come get it.

I'm no expert in surveys, but I always hate questions that don't give me
more than two choices for a response.

It seems to me that if approximately 75% of the membership surveyed is
ignorant of relationship banking, any conclusions drawn from questions
concerning relationship banking can not be reliable.  They may be correct,
but that would only be by chance.

Bob

RE: Note 870.0 by WRKSYS::SEILER

> Analysis of DCU Survey (see note 364) >-

When reading Larry's 'critiques', I had to wake up and realize that he
did EXACTLY what the SC did.  His critique was done in the same way and
method...

	Makes one wonder how what is REALLY going on...

	- mark

    re .1:  You are most welcome.  There may be another way to get the
    survey, call and ask!  Many questions had several possible answers,
    though the check fee questions had only three:  the member should cover 
    the cost, all members should absorb the cost, or don't know.
    
    re .2:  I did exactly what the SC did?  I hope you are referring to
    the campagin material analysis, rather than the survey analysis...
    
    	Thanks & Enjoy,
    	Larry
    
    PS:  Note that I didn't say that the survey invalidates relationship
    pricing, I said that it doesn't support relationship pricing.  In
    the potentially litigious atmosphere of our company and our credit
    union, I thought I'd better make that clear.