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Co-op Member Satisfaction Correlated Very Strongly with Management, Pricing Policies

Satisfaction Also Correlated With Opinion That Co-op Was Doing Good Job Of Marketing Milk And Returning Best Price

Washington—Dairy cooperative member satisfaction with their co-op is very strongly correlated with satisfaction with the co-op’s management and satisfaction with the co-op’s milk pricing policies, according to a recent study.

Member Satisfaction With Their Cooperatives: Insights From Dairy Farmers was written by Carolyn B. Liebrand and K. Charles Ling, agricultural economists with USDA Rural Development.

During the past two decades, USDA’s Cooperative Programs has provided technical assistance to several major dairy co-ops in conducting five membership surveys to find out directly from their members what they think about their co-ops. The report by Liebrand and Ling pools the data of four of these surveys for further analysis (data from the fifth, and earliest, survey was irretrievable).

The membership surveys were conducted independently in January through March in various years between 1993 and 2012. The four surveys combined had 2,379 mailed-in responses. Individually, a majority of each co-op’s members sent in their questionnaires, ranging from 53 to 60 percent of the co-ops’ members.

In addition to soliciting members’ overall levels of satisfaction with their co-ops, questions that were asked on all surveys fell into six general topic areas: milk pricing; co-op services; co-op operations; co-op principles; co-op governance; and member connection with their co-op.

Among the highlights of the respondents’ ratings for each key factor associated with member satisfaction with their co-op:
• 20.3 percent of the respondents indicated they were very satisfied with their cooperative overall.
• 18.1 percent were very satisfied with their cooperative’s board of directors, and 16.8 percent were very satisfied with their co-op’s management.
• 34.7 percent were very satisfied with their co-op’s bulk milk hauling services, more than for any other service asked about, but only one-half of that (15.2 percent) were very satisfied with their co-op’s milk hauling policy.
• While a majority indicated that the co-op kept them informed about operations and programs (63.0 percent), fewer indicated that they received as much information as they need (44.9 percent).
• The majority of respondents indicated that the co-op’s offer of a secure market for their milk was a major reason for belonging to the cooperative (54.1 percent).

Management, Marketing Are Key
Member satisfaction with their co-op overall was most strongly correlated with member satisfaction with their co-op’s management, the study found. Also, satisfaction with the co-op overall was very strongly correlated with satisfaction with their co-op’s pricing policies.

Moreover, satisfaction with the co-op overall was strongly related to agreement that the co-op does a good job of marketing members’ milk and returns the best price for their milk.

In addition, member satisfaction with the co-op overall was strongly related to satisfaction with their co-op’s management of operating and marketing costs, and satisfaction with the co-op’s board of directors. All but one reflect corporate-level issues that concern how well the co-op is run (board and management) and items that affect members’ pocketbooks (pay prices and co-op costs).

The more satisfied members were with their co-op, the less likely they were to drop out, or vice versa, the study said.

Three communication (member relations) issues were strongly correlated with members’ satisfying feelings toward the co-op.
Agreement that their co-op keeps them well-informed about its operations was strongly correlated with overall satisfaction with the co-op.

Similarly, member opinion on the influence they had in the co-op, and level of satisfaction with their influence on how the co-op is run, were both strongly related to overall satisfaction.

Moderately Correlated
A number of items were moderately correlated with overall satisfaction with the co-op, the study noted.

These include items that affect members’ pocketbooks (agreement that the co-op pays all members fairly for their milk), and communication (agreement that members receive as much information as they need about operations and programs).

Also moderately correlated with overall satisfaction are items concerning members’ feelings of connection to their co-op.

Disagreement that the co-op was more concerned about operations than the members was moderately associated with a higher satisfaction level with the co-op overall (in other words, a satisfied member tended to view the co-op as not more concerned about its operations than about its members, and vice versa).

Agreement that belonging to the co-op is an important part of the member’s identity as a farmer and that the member feels that he or she is part owner of the co-op were moderately related with the level of satisfaction with the co-op overall, the study said.

Further, agreement that the co-op is just another place to do business was inversely related to overall satisfaction with the co-op. This indicates member satisfaction with their cooperative overall is moderately correlated with a view of their co-op as a unique organization.

Five service aspects were asked about in the surveys. Individual surveys asked other questions about services provided by the co-op, but these five were comparable across surveys: level of satisfaction with the co-op’s provision of marketing, its milk hauling policies, the co-op’s field representative, the co-op’s laboratory services, and the co-op’s milk hauling services.

However, satisfaction with milk hauling services (operating or arranging routes) was weakly correlated with satisfaction with the co-op.

The relatively weaker correlation between member satisfaction with their co-op and satisfaction with the various services provided by or through the co-op may be because of the individualistic nature of the relationships between service provider and member.

Members may hold service providers, such as field representatives and milk haulers with whom they have direct contact, accountable for the quality of the services provided rather than the co-op itself.

Member satisfaction with their co-op may be more heavily influenced by how the co-op guides the provision of these services, the study said.

For example, member satisfaction with, or rating of, the co-op’s milk hauling policy is more strongly correlated with satisfaction with the co-op overall than was members’ rating of the milk hauling service itself.

To enhance member satisfaction, first and foremost, co-op members should elect a board that is competent in setting policies and recruiting and supervising a capable management team that does the best possible job of marketing members’ milk, the study continued.

Secondly, the co-op should devise a mechanism for members to exercise governance influence. Thirdly, the co-op should have an education program to augment members’ understanding of the milk market and the nature of the cooperative business model.

Last but not least, the study said the co-op should ensure that service providers who are in direct personal contact with members are well trained in technical expertise as well as customer service.