BURBANK, Calif. -
The solution: a focused e-mail campaign designed to encourage members to take the next step, thereby saving Lockheed FCU the expense of paying for non-use.
Andrea Carpenter, the $2.5-billion CU's senior vice president of marketing, told the Credit Union Journal the first wave of e-mails was sent to members in November 2006. Members were offered an incentive-a $15 retail store gift card-for making three online payments. Of the 507 inactive users targeted, 99, or 19.5%, responded by making an online payment.
A second e-mail in May of this year resulted in online payments from 179 of the 1,680 recipients, for an 11% activation rate. Carpenter said CheckFree has found the average activation rate for e-mail campaigns is 2% to 11%. "The whole thing was fairly simple," Carpenter said. "We pay for folks who are signed up, and since we don't pass on fees to members, as most institutions do these days, it adds up."
Carpenter said each month a group of members sign up for bill pay with the best intentions, but then do not get around to registering their payees, much less making actual payments. "Over time, the population of inactive folks grows, so we thought it was a good idea to let them know they need to use it or lose it. When we say 'lose it,' they could re-enroll later, but we code it on the system so the credit union is not charged," Carpenter said.
Stephanee Maxwell, Lockheed FCU's marketing director said she was pleased with the results of both campaigns, and added the e-mail effort has become an ongoing project. "We receive a list of members each month who have not used the service within 60 days of signing up, and we send them an e-mail," she explained. "We no longer offer the $15 gift card. We've already been paying for them to have the privilege of using the service, so why should we reward or incent them for not using it? Eleven percent is still good, and there is a lot of extra effort to go back through the system to confirm which members have made three payments and then send them a gift card."
Added Carpenter: "We started out thinking we needed an enticement, a carrot, rather than a use-it-or-lose-it message. The first one was great, but adding the card added a cost. So we tried sending a message reminding them to use it. The 11% activation rate wasn't as good as 19.5%, but it still was pretty respectable."
According to Carpenter, bill pay is a tough service to grow materially. She said Lockheed FCU has seen incremental growth, especially by members who also use online banking. "But like a lot of credit unions, we're still looking for answers."
The credit union has encouraged its frontline staff to explain to members how to use the bill payment service. In addition, it sends members a monthly e-mail with educational tips. "To give it more urgency, we offer a prize each month," Carpenter, said. "The e-mail points out the benefits of bill pay, including knowing a guaranteed payment date, rather than guessing when the Post Office is going to deliver the check."
To qualify for prizes, members must make three payments. Carpenter said the requirement was designed to create a habit, or at least get members invested in the service. "Saying 'sign me up' is one thing, but setting up payees and registering a payment is a whole other activity," she said.
Lockheed FCU brands the service as Web BillPay and uses PSCU Financial Services' PayLynx online bill payment platform. To grow the bill pay subscriber base beyond its current total of 11,000 members, the CU is in the process of adding a "how to" video from PSCU Financial Services to its website and now uses the cooperative's communications package to get subscribers to take the next step once they are enrolled.
Leslie Reistrup, director of e-services for St. Petersburg, Fla.-based PSCU FS, said Lockheed FCU has been an excellent partner in the effort to boost bill pay usage. "They look out for their members at all times, and they look for ways to increase usability of their products, which helps members in the end," said Reistrup. "They have a dedicated team that is very experienced. They are passionate about e-commerce in general, especially products that will help their members in the long run."
FOR MORE INFORMATION
www.lockheedfcu.org
www.pscufs.com
