What are you doing to turn members gained through indirect loans into active, long-lasting members?
Asked of attendees at CUDL's Annual Meeting In Las Vegas
It is a struggle for us, just as it is a challenge for many credit unions. We have not been particularly effective trying to contact indirect members at the close of their loan. When we do reach them, we ask about the buying experience at the dealer. We want to improve upon turning CUDL members into regular members.
I am at Mountain America's one small branch in New Mexico. We use indirect lending to bring people into the family. We see a number of people with poor credit, so we have developed programs for them such as rescue loans. We show them we have better rates or terms to save them money. For other indirect members, we offer checking accounts and small business loans. The more services we offer to them, the more we can get them to stay.
We stopped doing indirect loans for non-members, although there are a select few auto dealers we trust to sign up new members. Most of our business is with existing members and about 20% is new members. We use indirect lending as a convenience channel rather than a build-up-membership channel. We farm credit reports to the branch closest to where the member lives. The branch identifies cross-selling opportunities.
We are trying to be aggressive. We market to new members as quickly as possible with pre-approvals- generally a credit card offer. When we send the introductory letter for the loan, we include a welcome packet with the opportunity for the person to refer a friend or family member. We also call every new member. Approximately one or two months in, depending on what day they took out the loan, the new members are rolled into our system.
For all of our C, D and E borrowers, we contact them upon funding the loan-in part to make certain the person by that name at that address just took out a loan. The first task is confirmation; the second is to inform the new member of what we offer. We try to bring them on board with a Visa or checking account promotion. For our A+, A and B borrowers, we offer a pre-approved Visa promotion via teleservices. We have about 5% to 7% penetration on our Visa offers.
All indirect members must open a savings account, and we are trying to convert them by pre-approving an additional service for each individual. Our call center staff makes a follow-up call on all indirect loans. We let the new members know about other products and services we have.
Our goal is to convert them to a checking account. We offer several options, including a new start checking if the person has credit issues. Mainly, we are trying to open a checking account and sell other services, including to people in underserved communities.
-Reported, photographed by Michael Bartlett
