Publcity, Not Deposits, Goal As CU Offers 5% APY Certificate Rate

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BATAVIA, Ohio-A 5% APY CD turned out to be the perfect promo to cap off Sharefax CU's 50th anniversary celebration.

The $5,000-maximum, five-month certificate was offered for one week just before the credit union's 50th anniversary event, as a marketing move and a way to give back to members, explained CEO Art Kremer, who said the expense for the certificate fell right into budget.

"We did not need the deposits," said Kremer, who noted the credit union had been promoting its 50th anniversary for the last year. "This was more of a marketing expense and a special dividend to our members. We wanted to let them know we have been here for 50 years, we are not going anywhere, and really get some name recognition. We manage the credit union very well from the standpoint of keeping our spreads, and we performed an analysis as to what this would cost us."

The promotion, which intentionally limited advertising primarily to statement stuffers and a website announcement, attracted $1.65 million through 146 certificates. Sharefax had budgeted for as much as $2 million. "We looked at what gaining $2 million in the CD would cost us for the five-month period. We looked at what we expected to get on return on investments, because we are not 100% (68% loan-to-share ratio) loaned out."

Knowing it could not cross-match the funds, Sharefax compared the 5% rate against the 1.4% average it was getting on investments. Kremer said SCU assumed it would lose about 3.6 percentage points of spread on the $2 million for just under a half year, costing the credit union $28,000.

"We are doing much better than budget this year, plus we assume we are going to hold onto about 70% of that money after the five months are up," Kremer said.

In recognition of its 50th anniversary and to thank members for their loyalty, SCU also gave away a car and invited members to send in their own video commercials-of which some were aired on local TV stations-about why they do business at Sharefax. Special events were held June 10 at the credit union's main office here, including a remote broadcast by a local radio station, demonstrations from local fire and police departments, and food and games.

The car giveaway took place earlier in the year at the CU's annual meeting. By playing a trivia contest over the last year, 12 members were eligible for the drawing, as well as one member who was randomly selected at the annual meeting. The giveaway, for a Ford Focus, brought a big turnout. "It was quite an annual meeting, 345 members showed up," Kremer said. "Typically we are lucky to get 120."

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