DEARBORN, Mich.-Plenty of credit unions offer year-end dividends. But DFCU Financial Credit Union has gone one step further and is showing non-members the type of bonus dividend they could earn by joining the credit union.
The $2-billion DFCU has launched the "Dividend Calculator" that in seconds shows individuals how much in a year-end payout they could receive by doing business with the credit union. The tool is located at www.paystobelong.com, and the site and the calculator are aimed squarely at bringing in new members and persuading existing members to bring over more services.
DFCU CEO Mark Shobe said the calculator shows people "what they are missing. The fact the credit union pays annual dividends is not that well known outside of the credit union and its members."
Easy-to-use, the calculator has windows that permit entries for deposit amounts, including CDs, checking, and savings. Loan entries include amounts for mortgages, home equity, auto, credit cards, and "other loans." Once users enter their information, they click "calculate special dividend" and see their potential dividend amount immediately.
Introduced in January 2008, the calculator has helped DFCU grow by more than 1 million members in the last year, and gain greater share of members' wallet, Shobe pointed out. "This is in a market suffering from the auto industry downturn and many credit unions here are not growing at all or are moving backward. It's also been very effective in driving lending and signing young members."
Members with first mortgages at other financials see the benefit quickly form the tool, Shobe pointed out. Often the potential dividend shown, once the mortgage balance is included, covers one house payment. "Members will ask, 'You'll make my final payment?'" Shobe said.
The calculator is appealing to young members when they see that the minimum $100 deposit brings a $50 dividend-the minimum dividend payment. "It encourages them to join and we end up getting more business from them," Shobe said.
The idea for the calculator had been in the works for several years, Shobe explained, saying the credit union wanted to ensure it first established a strong financial position, operating highly profitably and efficiently so it could "continue to deliver" a healthy dividend. Dearborn Financial recently announced it plans to pay members a $17 million dividend for the third year in a row. DFCU, Michigan's largest credit union, has had a banner year so far in 2008, with $28 million in net income for the first three quarters, up from $22.2 million for the same period last year.
Besides allowing individuals to calculate the benefits of credit union membership at home, the calculator is a great point-of-sale tool, Shobe said. "Our member service team can turn around their computers, punch in the numbers, and show members what they gain by bringing over more business."
The calculator is part of a larger effort to attract new members. The www.paystobelong.com microsite, which can also be reached through the credit union's main site, includes numerous enticements to join DFCU. The site gets straight to the point: "Why Should You Move Your Money Over" is the headline that dominates the page, and then when users click through to the calculator they're prompted to "do the math."
If the dividend money isn't enough to persuade individuals to sign up, DFCU emphasizes there are many reasons to become a member, such as friendly service, financial education, and a "full array" of products and services. DFCU is also offering new members a free one-year membership to the local Henry Ford Museum when they sign up, and has an online application that allows members to refer people to the CU.
With banks reeling, Shobe acknowledged that the time is right to aggressively go after new members, adding that the window of opportunity will not stay open for a great deal of time.
"This is something that we planned a while back when we realized there would be issues facing the automotive industry," Shobe noted. "Obviously we couldn't predict how tough things would get for the entire economy. But this tool and the Web site are allowing us to grow, while many financials around us are not."
The DFCU dividend will be distributed during the first week of January to about 133,000 members. Members must have maintained a minimum average account balance of $100 throughout this year to qualify for the payment.
