Conceptual Wrestling: Deciding How To Pay Rewards

GROTON, Conn.-While several CEOs are stressing the importance of marketing year-end dividends and bonuses, others have also noted the tremendous challenge inherent in deciding how to best reward members.

Brian Orenstein, CEO of Charter Oak FCU, said his credit union struggled two years ago with the idea of offering a year-end dividend only to those with multiple relationships. This year COFCU paid $100 to every member of its Gold Rewards relationship program who met monthly requirements, handing out $271,800 in total (Credit Union Journal, Dec. 19). Gold Rewards members must have a checking account, direct deposit of $1,500 a month or four active bill payments a month, an aggregate loan and deposit balance of $20,000 or more, and have all their accounts in good standing."

We wrestled conceptually with this pricing change," explained Orenstein, who said that Gold Rewards members make up only 5% of the CU's total membership but account for a "significant" percentage of the credit union's loans and deposits. "It took us the longest time to decide. But we knew we had to provide greater rewards to members who play a bigger role in the credit union."