Low-Budget Methods For Boosting Online Usage Are Shared

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How can credit unions encourage members to do more transactions online without spending a lot of money on marketing?

Speakers at an educational session at the Digital Insight National Conference here shared some creative thoughts.

Mike Armbruster, senior vice president and chief information officer at ESL Federal Credit Union in Rochester, N.Y., said his 225,000-member, $2.4 -billion credit union did a promotion last summer that it called "Get Out of Line" that boosted usage. Prior to the promotion, ESL averaged about 750 new Internet banking users and 300 new online bill pay users per month.

"We wanted to drive up Internet banking and reduce the number of members in branches and using our call center," said Armbruster.

To boost usage, ESL paid members $1 for sitting through a demonstration at the branch, and $10 if they used online banking within 30 days. The latter offer drew a 40% response rate. The credit union had contest rewards for its employees, and distributed posters and buttons with the slogan "Just Try It-You'll Like It."

The results, Armbruster said, were spectacular.

"We had significant growth-53% above normal for Internet banking and 55% above normal for bill pay," he reported. "Some branches did better than others. We found the high performing branches dedicated an employee to actually pull people out of teller lines and show the members a demo of what they could do online."

Carolyn Parelli, e-commerce manager for Affinity FCU, a 110,000-member, $1.2-billion credit union headquartered in Basking Ridge, N.J., said her membership is extremely technology savvy-50% of members use Internet banking.

"However, we saw a weak penetration of online bill pay compared to Internet banking," she said. "This is important, because a bill pay user is four-times more profitable and much easier to retain. Therefore, we wanted to increase bill pay."

Affinity segmented its marketing plan in order to increase bill pay adoption. Internet banking users and non-online members were pitched differently.

Aggressive E-Marketing

"For Internet banking users, we launched an aggressive e-marketing campaign in January," said Parelli. "This included targeted banner messages, an e-newsletter to 6,000 subscribing members, a footer on every e-mail, and a tile ad on the home page to measure member response."

In late February, Affinity added a bill pay prompt to its website. Visitors to the site are asked if they wanted to sign up for online bill pay. Parelli said this prompt has generated many new bill pay users.

"The prompt has been viewed by 17,621 people, with a 5% response rate," she said. "We had 106 registrations for bill pay in one week, compared to a monthly average of 84 registrations before using the prompt. The tile ad generated an additional 777 views of the bill pay information page."

ESL's Armbruster said his credit union also has had success with a bill pay prompt. He recommended making Internet banking and bill pay training mandatory for all member-facing staff.

Reaching Members Who Are Not Online

Affinity looked at the marketing campaign directed at non-Internet users as an opportunity to move members online, Parelli continued.

"We had a chance to promote the benefits of both Internet banking and bill pay to these people. We created a branch merchandising plan to showcase and demonstrate Internet capabilities."

"The most important thing is you really need to understand the segment you are going after," she added.

Wendy Kish, online banking manager at Sand Ridge Bank in Schererville, Ind., just outside of Chicago, offered a small bank's perspective. With little money to spend on marketing, Kish said Sand Ridge needed to increase the awareness and usage of its online channel. The bank averaged 134 Internet banking registrations per month in 2001.

"We put ads on our statements and on our drive-thru envelopes. We mentioned online banking at the start of our bank-by-phone message, and we put an ad on our ATMs," she said.

As a result of this effort, Internet banking registrations more than doubled to 286 in February, the first month after the program's launch. "We look at this as not a campaign, but an ongoing program integrated into the way we do business," said Kish.

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