Bonus Points, Airline Coupons Ignite Dormant Card Accounts
Team One Credit Union here lured 278 members to begin using their dormant credit cards by offering merchandise bonus points and airfare coupons.
As part of a test for its card processor, Certegy of Tampa, Fla., and Card Services for Credit Unions, Inc., Clearwater, Fla., Team One offered a three-month "spend-and-get" promotion that targeted 739 members who had either not activated their card within 60 days or had no purchase activity for more than 90 days but were current and in good standing.
"With the average cost to acquire a new cardholder about six times more than maintaining existing ones, it's not enough to have the member on the books if they're not using their card," said Konnie Werner, Team One's President/CEO.
Werner said while she doesn't understand why people receive credit cards then don't activate them, but she did know that many cardholders pick and choose which cards they use based on the rewards attached.
"You have people who used to use a particular card because they got bonus points (good for merchandise)," she said. "Then maybe GM came along and offered something better. And when GM lowers the value of that card, they switch again."
This promotion, she said, was intended to bring Team One's card back to the forefront.
About half of the targeted cardholders received an offer of a complimentary companion airfare coupon for using their credit union card five times and spending a total of at least $500 within the promotion period. The other half earned bonus points redeemable for merchandise. The more they used the card, the greater the value of the merchandise.
The result, Werner said: 278 or 38% took the bait, spending $108,733.
"Now that we have these cardholders using our card, we're going to make sure they keep using it," Werner said. "We're very pleased with the results of the promotion and the impact on our overall portfolio and plan to run it again in the coming months."
Certegy and CSCU were also pleased with the outcome of the test promotion and plan to make it available to other credit card clients starting this month. Werner said that staff and board members are also discussing using similar give-away tactics to increase usage of other products and services as well.
The $253-million Team One serves 35,546 members.