Cooperative Member Satisfaction and Participation

Phil Kenkel

Bill Fizwater Cooperative Chair

Oklahoma State University

A Rutgers University study examined cooperative members satisfaction and the relationship with patronage and involvement in the cooperative.   The members were asked about their level of satisfaction with prices, management, their voice in the cooperative and the cooperative’s communication.  Price did not appear to be a significant factor in overall satisfaction.  Most members were satisfied with management but members with off farm income were more likely to be dissatisfied, perhaps because they felt the cooperative was focused on full time farmers.  Cooperative members who considered themselves a part owner in the cooperative were most likely to approve of management decisions.

Older members tended to be less satisfied with their voice in the cooperative.  Perhaps these members are most interested in equity retirement and feel their priority is not recognized.  Members who believed the cooperative treated everyone equally were most satisfied with their degree of input.  Members with higher farm income and members that did a higher percentage of business volume with the cooperative were more likely to be dissatisfied with the quality of communication. These members have more at stake in the cooperative and may be interested in receiving more information concerning the cooperative’s performance and strategy.  Longtime members and members who perceived that the cooperative treated all members equally were most likely to be satisfied with cooperative communication.

Some members are disloyal to the cooperative (patronize other firms) or even abandon the cooperative.  The survey indicated that members who were dissatisfied with management were most likely to fit into those categories while longer term members had the highest loyalty. Long term members may have a better understanding of the cooperative’s business environment (and thus better understand the manager’s challenges) or they may perceive a greater stake in the firm.  Member democratic control is an important cooperative principle. However, none of the satisfaction measured appeared to have much correlation with attendance at annual meetings or voting.

What are the take home points of this study?  Obviously the board and management cannot please every member and some decisions inherently balance the benefits to one group against another.  Members who perceive themselves as part owners are more likely to be satisfied with management, communications and their voice in the cooperative.  This sense of ownership can be maximized by distributing profits in the form of allocated equity (as opposed to increasing unallocated reserves), managing the equity retirement program, and celebrating equity retirements.  Members’ perception of fairness and equality also appears to drive satisfaction.  In justifying decisions managers and board members should stress their commitment to treat all members equitably.  Finally, members appear to have different levels of interest in receiving information from the cooperative.  Cooperatives should considering targeting more information to the sub-group of “power users”.

There is no greater challenge than understanding member needs and no greater satisfaction than in exceeding member expectations.