MILWAUKIE, Ore.-The $241-million Clackamas FCU here has turned a Credit Union Journal article into its own success story with a 1%-off, one-day loan sale that booked big numbers.
Andrew Vahrenkamp, chief financial officer, said he read about a credit union in South Carolina that had a great turnout for its one-day loan sale. So Clackamas FCU borrowed the idea and offered a 1% discount on any vehicle or secured consumer loan that was approved and funded that day. The rate was offered to existing members and new members who opened an account on that date.
The promotion resulted in $1.24 million consumer loans funded, compared to $108,000 in originated secured consumer loan balances on a typical Friday in September, an increase of 1,053%.
"This was a pretty significant success for us in terms of balances we would not otherwise get," Vahrenkamp said. "Almost every loan we made was a used car loan, with a few boats, motorcycles and RVs."
Fully 100% of the credit for the success of the one-day loan sale should be attributed to marketing, Vahrenkamp continued. He said Clackamas promoted it by using an e-mail marketing campaign for the first time in its history.
"We sent e-mails to all the members who we had addresses for, and we did a newspaper ad," he recalled. "The newspaper ad brought us nothing, while the e-mail ad brought us a big crowd. People loved the pumpkin-headed guy."
'Felt Like The 1980s Again'
Clackamas accepted applications for the sale primarily on the phone and in its branches. Vahrenkamp said it is set up to take loan applications online but is not publicizing that capability yet as it is still rolling it out.
Feedback from the sale was "very positive," Vahrenkamp said, as the CU's branches were "busier than we have seen them in some time."
"As is the case with most credit unions we are experiencing a general decline in branch traffic as people use other methods to do transactions or access their funds," he said. "But on the day of the sale one longtime staffer commented it felt like the 1980s again."
In addition to the loans, Clackamas cross-sold a number of Visa cards at the same time. Vahrenkamp said CFCU has made an effort to cross-sell its platinum, fixed-rate Visa card whenever members come in to a branch.
The one-day sale "really kick started" lending over the subsequent months, Vahrenkamp reported, noting the promotion reinforced the notion that people "should come to Clackamas for a loan."
Eye-Catching Creative
"It has helped retain consumer loan balances and bring in dollars that might have flown elsewhere," he assessed. "The key was the e-mail. We gave people about a week's notice. We put banners on the branches to help remind people where the branches were. The clear creative caught their eye, and we gave them one day. The staff was motivated and enthusiastic, though we did not have any specific incentives."
Based on the success of its first one-day loan sale, it will host another in June. Vahrenkamp said the CU will time the new promotion with the start of summer to catch people who might be more interested in purchasing a vehicle.
