Giveaway Helps Boost Loans By Nearly 50% At CU 1
ANCHORAGE, Alaska-Credit Union 1 managed to jump start its fourth quarter lending activity and stir some excitement among its members with a "Clean Slate Giveaway" promotion.
The $747-million credit union offered members who closed on a loan between Oct. 15 and Dec. 31 an entry into a drawing to have all of their loans at the CU paid off, up to $25,000.
Rachel Ramsey, VP of marketing and communications, told Credit Union Journal the contest drew 2,831 entries. For the 10-week period of the contest, CU 1 originated 2,691 loans for a total of $40 million. In the same period in 2009, it originated 1,825 loans for a total of $28 million.
"Management found the contest to be very successful," Ramsey said. "As with most financial institutions, we want loans and this was just the push we needed to get members in the door. It also helped one of our members start the new year with a sizeable chunk of their debt erased. That is a pretty good feeling to be able to help someone like that."
Most Alaskans receive their Alaska Permanent Fund Dividend on Oct. 7 each year, which Ramsey said generates "huge excitement" in the state and lots of spending. Therefore, CU1 waited until after the frenzy wore down a bit before it launched the Clean Slate promotion a week later.
Some members won $25 gift cards during the course of the giveaway. Ramsey said Credit Union 1 thought a series of small awards would be needed to help out through the holidays as a way to keep up enthusiasm for the promotion by both the members and staff because there would be multiple winners.
"Turns out that it really didn't matter; the focus of staff and our members was on the grand prize of $25,000," she assessed. "The members thought the promotion was great because the odds of winning were not inconceivable. It is hard to think about moving loans or getting new ones during the holiday season but this promotion was just the nudge they needed to take action. It also was a great conversational tool for the employees and members."
"If we had to do it over again, the only thing I would change was the gift card giveaways," she added. "Those did not seem to make an impact one way or the other."
Credit Union 1 reported 2010 net income of $7.8 million before NCUA assessments. It paid $756,972 to the NCUSIF and $816,782 to the temporary corporate stabilization fund, leaving it with net income of $6.2 million.