CU Goes From Bleeding To Leading With Cards

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Credit Union: Trane FCU

Nominated by: PSCU Financial Services

Nominated For: Overhauling Card Program

Officials at Trane Federal Credit Union always wondered if the marketing and development efforts they put behind their credit card program were sufficient to provide good service to their 48,000 members.

As offers from out-of-state providers began clogging members' mailboxes, they knew something had to be done if the $380-million credit union was going to stay competitive with credit cards.

"We knew we were losing market share for our Visa Classic card and our goal was to stop the bleeding," explains Bob Bakalars, financial analyst for the credit union.

It was PSCU Financial Services, Tampa, Fla., that helped stanch the wound with its Advisors Plus consulting services.

As credit card service provider, PSCU had a relationship with Trane and had provided its Visa card since 1991. The credit union began working with PSCU's consulting department to better understand the market challenges and look for new ways to maximize the card program.

Advisors Plus representatives worked with Bakalars and other Trane staff to enhance the program and promote greater usage. In March, the credit union upgraded its better cardholders to gold and platinum status with an "opt out only" mailing. More than 3,800 members received the offer and very few rejected it, Bakalars says.

The new cards raised the line of credit, but also lowered interest rates to 9.9% from 12.9% on its Classic Visa card. "We had to take a step back in revenue expectations before we could move forward," he said.

A July-August promotion for balance transfers at an introductory rate of 2.9% netted an easy $1.2 million for the credit union.

The promotion attracted many from the original mailing, but others as well who had heard about the promotion and wanted to take advantage of the offer.

"PSCU told us to expect a 4% response rate and we netted 7%," he says.

Member research and targeting helped drive the new promotions, along with a more sophisticated product. PSCU's CU Rewards program, offering points for every dollar charged redeemable for airline and cruise tickets and merchandise, helped draw customers to the cards. The no-fee feature helped reel them in, says Bakalars.

"We haven't done an across-the-board credit line increase in some time so that's definitely coming up," Bakalars says. Right now, Trane still has about 8,000 of the old cards in circulation and would like to upgrade as many of those cardholders as possible to the new program, he said.

PSCU's involvement will help, says Bakalars. The Florida-based provider helps segment and target audience members for promotion. They assist in marketing and measure the effectiveness of Trane's strategy and execution, he says.

"Credit cards had always been a stepchild of sorts, since we tend to concentrate on other in-house services we offer," said Bakalars. "It was time to get back into the game, if only for our members' sakes."

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