Once you receive the survey responses, you must tally and analyze the results. If you follow the preceding guidance on how to conduct a statistically valid random sample, you may use the results to predict the preferences of the entire potential membership. Using the previous example, if you received 357 responses to your survey, you may extrapolate the results to the entire potential membership of 5,000 members.
For this example, suppose 30 percent of the survey respondents indicated they would join the credit union within the first two years. If this were the case, you have support to anticipate a membership base of approximately 1,500 (5,000 x 30 percent) members at the end of year two. However, the statistical calculation assumes an error rate of plus or minus 5 percent; thus, the estimated membership base must reflect a range of 1,250 (5,000 x 25 percent) members and 1,750 (5,000 x 35 percent) members. These numbers can be viewed potentially as the “best case scenario” (1,750 members) and potentially as the “most likely scenario” (1,250).
Based on the NCUA’s experience, new credit unions do not generally achieve the “best-case scenario.” Due to several factors, including the length of time between conducting the survey and receipt of a credit union charter, not all persons who express an interest in joining actually join the new credit union. Therefore, the NCUA highly recommends developing a business plan and financial projections using the “most likely scenario” assumptions. You can present other scenarios if you can provide sound statistical support.
When a larger potential membership base is involved you need to use judgment about whether those results based on the larger potential membership base are attainable. If deemed unattainable, assumptions should be modified accordingly and documented.
For example, if the 30-percent response rate used earlier for joining the credit union within two years was applied to a potential membership of 500,000, the result would be 150,000 individuals might join the credit union after two years. A review of membership growth at existing credit unions does not support a new federal credit union could add 75,000 net new members a year on average, as existing credit unions are not even able to do this.
If your PFCU has a larger potential FOM, you will need to evaluate the results and determine whether their conclusions are reasonable and attainable. More than likely, you will need to make adjustments and calculate assumptions on information more in line with newly chartered and existing credit unions.
You can review financial information from 5300 Call Report and Financial Performance Reports here on newly chartered and other existing credit unions to help establish realistic assumptions. Mentor credit unions can also assist with feedback regarding reasonable and realistic projections and assumptions.