The quest for what would eventually become the electric cooperative Member Loyalty Index began in 2014, when two Michigan communications leaders were looking for ways to better align their co-ops’ offerings with what their members wanted.

“We knew that the engagement efforts we were undertaking would have an impact, but we didn’t have any defensible way of figuring out whether they were working, what our baseline was and where the needle was that we were trying to move,” says Rachel Johnson, now member relations manager at Cherryland Electric Cooperative in Grawn.

She joined forces with Casey Clark, vice president of communications and member services at Wolverine Power Cooperative in Cadillac, on a mission to develop a simple and accurate way to measure member engagement and loyalty.

She and Johnson had a “breakthrough moment” when they found a study by a professor in Australia looking at loyalty in agricultural co-ops.

“It was a really perfect context for us to borrow from, because electric co-ops have a lot in common with agricultural co-ops,” Clark says.

The study looked at three different variables to see which had the biggest impact on member loyalty: financial value, service value and emotional attachment. In the end, emotional attachment proved to be the biggest predictor of a member’s loyalty.

“The minute that we found that, we were like, ‘Emotional attachment is what we need to be measuring,’” Clark says. “That’s when we finally connected the dots—a successful communications program engages with members in a way that increases emotional attachment. So, we contacted the professor, we got his questions and we edited them slightly from an electric cooperative context to come up with the index.”

In 2015, they tested the first loyalty survey—five simple value statements that respondents rank on a scale of 1 to 10 and six areas where co-ops should invest to boost scores (see chart)—by adding it to a routine member survey at Cherryland. Results were given on a scale of 1 to 100.

“We tried a bunch of things out in that first survey, and then refined it over subsequent surveys until we knew the index was statistically reliable and we were able to identify the six communication and service drivers that build member loyalty,” Johnson says. “So, it took good statistical research to help us get there.”

Co-ops have for decades used a satisfaction index that’s based on members’ recent interactions with the co-op, such as whether a service rep was polite and well-informed. But the MLI “takes member satisfaction to the next level,” says Cherryland General Manager Tony Anderson.

“In hard times, when raising rates or when you have a storm, you want loyal members, you want members who are there for you through the tough times,” he says. “Loyalty keeps them with you in the tough times better than anything else.”

Mike Sassman, NRECA director consumer analytics & market research, says that of the co-ops his team works with, many of the highest-performers in overall satisfaction and ACSI scores were the first to understand the value of measuring loyalty and were among the MLI’s earliest adopters.

“If you look at the scores for the last three years, we saw that 2020 was a high point,” he says. “Our hypothesis being that co-ops did a lot to help members during the pandemic and their satisfaction and loyalty scores reflected that.”

As a communicator, Clark says MLI results help her know that the co-op has strong allies in the membership.

“[Members] with a high MLI score are more likely to advocate for you, they’re more likely to attend co-op events, to vote in director elections, all that good stuff that makes for a healthy co-op,” she says.

'Where loyalty comes from'

“It really shows us that our members do think that we’re serving them in the best way possible,” Barnes says. “And at a time of difficulty and trouble, the electric co-op becomes something that they feel very good about. We want to continue to do that.”

Coast makes the MLI part of its strategic plan that is approved by its board of directors, and it informs the executive team’s goals as well as employees’ annual performance goals.

“All of our employees are working toward that common goal­—to build on the member loyalty that we have,” says Melissa Russo, Coast’s vice president of communications, public relations and member services. “All of our employees are on board and standing behind that.”

Russo attributes Coast’s high MLIs to seeking member input all year long.

“We know our members and understand who they are and what they want and need from us,” she says.

“We built this whole new member experience on what we learned from the loyalty research,” Johnson says. “Now we have the same level of loyalty from members on the co-op’s lines one year and 20 years. I cannot overstate how unbelievable that is.”

That is especially true given how today’s members are far from their co-op’s humble beginnings in the 1930s, these co-op leaders say. The influx of smart devices and demand for new energy resources is stirring competition and heightening the importance of building loyalty.

The co-op model “only works when they’re engaged in a way that makes them care about what happens to the co-op in the long run,” Johnson says. “That’s how we’ve made it 85 years. Modernizing our understanding of where loyalty comes from with our members is a good way to continue to live out our business model and protect it into the future.”

To learn more about pursuing a Member Loyalty Index at your co-op, contact Rachel Johnson at rjohnson@cherrylandelectric.coop or Casey Clark at cclark@wpsci.com.