CLEARWATER, Fla.-To increase card penetration, credit unions must first make sure that they are retaining existing cardholders.
"If we're gaining a bunch of new accounts but losing cardholders we have today, obviously the net result isn't very positive," said Card Services For CUs' Bill Lehman, who implored CUs to "take care of what you have" with aggressive campaigns.
CUs must constantly look at their membership and understand that card products are not "one and done." Lehman emphasized CUs must take a life-cycle management approach to ensure they are providing the right products, rates and rewards for members based on their individual situations. Management must direct front line staff to embrace card services as a cross-selling priority.
"In branch marketing is crucial. Credit unions have a huge opportunity in that [they] know their members," Lehman explained, noting that cross-selling at every opportunity is the most cost-effective strategy for card adoption. In the past, many CUs have left cards on the shelf as a product they have but do not emphasize much. But that is changing. Data compiled by CUNA in 2009 showed CU-issued plastic made up 6.1% of the market by the end of the year. "I think that number is certainly starting to grow and credit unions are starting to eat away a little bit on that market share. We're making some progress. We're still a very small portion of the market, but as you look historically we are growing," said Lehman.
In a rewards-driven environment, CUs must understand their membership demographics and know what cards they are using today and then adopt strategies to woo members away from the competition. While some members may only want rewards, Lehman suggested offering incentives for car loans, home equity loans and "anything else to drive loyalty" while also demonstrating value to members.