CLEARWATER, Fla.-If there were ever a year to emphasize relationship pricing and relationship rewards, it's 2012.
Bill Lehman, VP of portfolio consulting for CSCU, told Credit Union Journal that 2012 will be "the year of bundling" for credit unions, when more issuers finally begin analyzing their membership and instituting pricing and product packages that reward members for using the credit union more.
"A lot of credit unions use MCIF data and crunch numbers and then talk about the profitability of members, but they never really do anything with that data to adjust processes and procedures," said Lehman. "They still look at different products with a siloed perspective. Credit unions need to begin building matrices and say because a member has a checking account and a mortgage they will cross sell that person a credit card with a 25-basis-point lower rate than the guy with just a credit card."
One of the reasons bundling is critical this year, according to Lehman, is because lending remains slow and all the new members are bringing over deposits. "Credit unions are capturing checking account share but they are not doing a good job of converting that new business to loans. We have to do whatever we can to get any kind of loan product into these new members' hands, and the best way is through relationship pricing."
It's also the year to maintain rewards programs, especially on credit cards, insisted Lehman. While he said that some banks that cut back on rewards have brought them back, consumers are aware of the banks' shenanigans. "You want to keep your rewards. Let members know you have them, have always had them, and are not changing and playing games with them."
While Lehman is in favor of adding credit card rewards if not being offered, he is not as confident about the value of adding debit rewards due to uncertainty over how the Durbin rules will impact debit interchange this year. "But if you have debit rewards, certainly keep them."
