BATTLE CREEK, Mich.-The standard end-of-the-year dividend is anything but at one credit union here.
OMNI Community CU is branding its bonus dividend as its own stimulus package and using it to promote CU membership.
For the second time in as many years the credit union is offering a "cashback rebate," this year totaling $750,000, to be distributed to the membership. But instead of quietly crediting accounts, the $224-million institution has instead decided to play up its member reward across the board.
It is doing so in a market in which another credit union, DFCU Financial, has generated considerable awareness of its annual bonus payments.
"It's all about differentiation. We want to show the differentiation between dealing with OMNI and other financial institutions. That's what the cashback rebate is all about," said President/CEO Ted Parsons. "We're giving back to members in a time where people really need the extra money and we want to show our appreciation for their loyalty to our credit union."
How much each of the 33,000 members OMNI Community CU boasts receives through the promotion is based on how deep his relationship is with the credit union — the greater the relationship, the bigger the rebate. Qualifying members will receive .22% back on their 2009 average yearly balances for nearly every kind of loan and account — a member that simply has a $100,000 mortgage with the credit union will receive $220.
"Everybody gets interest or dividends on their deposits, but who pays them a rebate on their loans?" Parsons said.
The rebates, which will be distributed on Jan. 8, 2010, have been promoted heavily throughout the community on billboards, direct mail to both members and non-members and other advertising channels. Staff members are wearing t-shirts publicizing the rebate and the credit union's homepage has a large splash playing up the promotion as well. A widget on the website, which debuted during last year's cashback initiative, enables members to calculate exactly how much they will receive through the rebate. The widget received only about 100 hits on the first day of the promotion in 2008, but that number nearly doubled this year, according to chief marketing officer Chris Overbeek.
While the rebate is only two years old, Parsons said OMNI Community CU members will be able to count on it continuing on an annual basis for the foreseeable future as the decision to go ahead with the rebate two years ago placed special emphasis on sustainability.
"Being able to do this consistently is the key to long term success," Parsons explained.
The credit union is hopeful that as the rebate becomes more visible that it will essentially sell itself and bring in more business, as it did to one member who had a boat loan with OMNI Community. One day when he went to make a payment, he discovered he had an additional $250 sitting in his account courtesy of last year's cashback rebate.
"The guy was so impressed with that he subsequently has brought over two mortgages and he's going to earn upwards of $750 this year," said Parsons.
