Chance To Drive Race Car Helps Speed Up Lending
America's First FCU posted record loans in March thanks to a promotion that gives borrowers both a chance to drive a racecar and a shot at winning a new, customized Ford Mustang.
Kathy Dunlap, marketing specialist at this 18-branch, $630-million credit union, said that the credit union generated $16-million worth of consumer loans, most of them automobile loans, thanks to the promotion. It was the busiest consumer-lending month since the CU's founding in 1936, she said.
Dunlap added that the campaign didn't cost much. "Not at all, in fact we are below budget in marketing," Dunlap said. The credit union did have to pay for a 2005 Mustang that will be given away in a raffle on May 21. But most other costs other than the advertising were covered, she said.
Only members who took new loans or refinanced loans worth $5,000 or more earned the chance to take part in the new car raffle and will have the chance to use the speedway, she said.
Costs were kept low because the credit union has a longer-term agreement with the Talladega Superspeedway. "We are the official CU of Talladega Superspeedway and we have the co-branding for a second year," she said. The agreement has in the past allowed the credit union to give free-tickets, have advertising at the speedway, and is now making it possible to offer the promotion inexpensively.
Dunlap said that the Speedway will open just for the credit union on May 21, when America's First will also host a picnic. More than 150 people are expected to drive around the track, she said.
The customizing of the car is being done by a local company, Manheim Mark, that isn't charging for the work in exchange for having its name appear in any related brochure, poster or newspaper and radio ads that America's First is running.
Overall, the promotional campaign of this 90,000-member credit union that is Alabama's second largest has been very cost efficient, Dunlap said.
The high point of the campaign will be a parade on the racetrack just before the Aaron's 499 Nascar Nextel Cup Series at Talladega on May 1, where the winner and his Mustang will lead all the racecars in "a parade lap before the race."
The credit union serves more than 1,300 SEGs, including Blue Cross Blue Shield of Alabama and Protective Life Insurance Co. During the promotion it was offering auto loans at APRs of 4.9%.
Of the CU's automobile loans, "probably 65%" are indirect, she said. "Dealers do a terrific job promoting the credit union, promoting our rates," she said. A majority of loans are for new cars but "there are lots of refinancing," she said.
Dunlap said that many jobs in the area where the credit union is based are related to the medical industry and research. The University of Alabama Hospital at Birmingham is a leading employer.
Credit unions have a lot of competition as the area is also a "pretty large hub for financial" companies. The area was the seat of SouthTrust Corp. before its acquisition by Wachovia Corp., she said.
"We have quite a bit of competition but we (credit unions) sure can really hold our own," Dunlap said.
The credit union will soon start planning another campaign centered on Talladega for the fall, she said.