SEATTLE-Saying the majority of CUs need to dig deeper into the use of analytics with their cards portfolios, two experts are offering data analysis strategies and tactics that are working.
Noting that card usage patterns and members' habits differ significantly between credit and debit-typically credit being used less often and for higher-ticket purchases-John Postle, general manager for JHA Payment Processing Solutions, and Dan Thompson, customer relationship manager for the same organization, focused on debit.
The big emphasis with debit analytics has been on ID'ing inactive cardholders or low-transaction users and moving them to much higher monthly usage numbers, said Postle.
"We are seeing analytics working with activation and usage campaigns," Postle said. "We have completed many campaigns with credit union customers that have identified groups of low users, maybe swiping their card one to two times a month, and moved that number up to 10 to 20 for much of the group. They target these end users with incentive campaigns."
The results have been significant, often driving 40% growth in overall transaction volume and doubling spend, something Postle said is padding interchange coffers now as the Durbin Amendment slowly chips away at per-swipe fees for those institutions below $10 billion in assets. Campaigns that have been working best are those that are simple to understand and have clear rewards. "So straightforward, simple campaigns-use your debit card 10 times and get 10 bucks, for example."
Complexity Kills
Thompson emphasized simplicity. "Complexity trips up consumers. The program and value proposition must both be clear."
It may be time to get moving with debit incentive programs, as PIN transaction revenue among credit unions appears to be falling, some stating this could be the "race to the bottom" among the PIN networks (CU Journal, March 11). According to a recent CUNA interchange survey of 155 CUs, during Q3 2012-two quarters after the routing and network exclusivity provisions of the Durbin Amendment kicked in April 1, 2012-PIN revenue among the study's CUs fell 8%, or more than 30% annualized, from the previous quarter. Postle said he has heard a number of CUs talk about the same level of PIN revenue drop-off during Q3 2012.
For info: JHA Payment Processing Solutions: www.weknowpayments.com
