Cards Being Overlooked Local Appeal

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RIVERWOODS, Ill.-For Kevin O'Donnell, finding a growth opportunity in 2011 means looking no further than the fact fewer than one in three members carry a credit card from their CU.

O'Donnell, VP of credit issuance for Discover Financial Services, said there are "good opportunities" for credit unions to leverage credit cards. "Credit unions can grow loyalty with credit cards because there is a low penetration of credit union members having a credit card from their credit union: only 29%. There is plenty of opportunity to cross-sell and upsell."

CUs are particularly well suited for this opportunity, O'Donnell assessed, because they know their local communities. His advice: make sure the marketing is very personal and reflects the credit union's particular field of membership.

"It should seem and appear that being a member is for someone like them," he said. "I call this 'relateability.' Knowing the community and being able to tap into that personal knowledge is something credit unions can do."

Such a campaign would include marketing pieces that show people shopping in the local area, and rewards programs designed in collaboration with local merchants and/or charitable organizations. "Those local roots are high-touch areas where credit unions are able to differentiate themselves because that is their strength."

Credit card programs have four key product benefits that credit union members look for: 1) no annual fee; 2) good fraud prevention tools; 3) strong and flexible rewards program ("Many credit unions do not offer rewards in their cards programs, so that is an opportunity," he noted), and 4) a key benefit: excellent service.

"Those four areas are things we think make a lot of sense for credit unions," he said. "Our role at Discover is to offer a brand that stands for customer satisfaction, loyalty and rewards. We think issuing a card through the Discover brand halo will tap into that."

O'Donnell cited as one tool Discover's personal financial management suite, which allows consumers to analyze where and how they are spending money on their credit cards. Another tool helps make financial decisions about big purchases by allowing people to figure out how many months it will take to pay off the item.

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Growth strategies