EUGENE, Ore. — A second chance for members to finance their car loans has led to first-rate results for SELCO Community CU.
The results have been "consistently great," according to Jennifer Ward, marketing research analyst for SELCO. Indeed, the response has been sufficient to merit a Credit Union Journal Best Practice Award.
The goal, said Ward, was to grow membership through SELCO's direct lending channel, rather than indirect lending. "For cross-sale purposes, we thought it would be a great idea to get our loan team involved," Ward explained. "Dealers really push financing with a lender of their choice, but we want to go to our members and tell them they have a choice."
The CU's marketing team worked with a credit reporting agency to obtain detailed information to target recipients for the mailing. Recent auto loans (in most cases, within 90 days), credit scores, size of loan, loan rate, and proximity to a SELCO branch all are criteria for identifying the targeted borrowers. As a result, mailing lists are small, which Ward said results in a high response rate and a higher ROI for the mailing.
The mailing costs approximately $1 per piece, including printing, postage, and the cost for the mailing lists. An in-house designer created the oversized postcards with colorful images of auto buyers expressing some level of anxiety or distress. One goal was to have a simple message-encouraging members to call or visit a branch for a switch to financing from the credit union. The pieces also mentioned value-added services for a new auto loan, including Gap and mechanical breakdown insurance, as well as other bundled services.
A December 2008 mailing brought in 29 auto loans, with total balances of $507,404, plus 20 Visa accounts, 19 new checking accounts and several other deposit accounts from time of mailing to Feb. 28.
Encouraged, SELCO sent out a second mailer using the same themes in March. That batch brought in 44 loans with total balances of $801,145. A third round went out in July, netting 54 new auto loans with total balances of $1,043,073, plus other relatonships.
"The results are consistently great," Ward declared. "It is a targeted campaign, so we always get a high and healthy return."
One of the keys to procuring a good response is identifying the rate of a member's current loan, she reported. "People who have 0% rates from the manufacturer just aren't going to switch."
An aspect of the mailer that did not work so well: early versions attempted to bundle a checking account, offering a discounted APR to those who made the move to SELCO. "But it didn't work and we took it out. If members have too many hoops to jump through, they are not happy."
A recent addition to the program is the addition of outbound-calling lists, which are provided to branch teams for additional follow-up with members.
The biggest lesson learned, Ward said, is "this is important and it gets a good return. The next step is to cross-sell these members to get them to take advantage of the products and services we provide."
Asked if she had any advice for other CUs looking to put together a similar program, Ward said it is imperative to allot sufficient time for planning.
"It is not a quick campaign and there are always roadblocks. There is a new challenge every time. You have to start talking with the credit bureaus and putting together a plan a good month and a half in advance of when you want the mailer to go out. Do your homework and take your time because it does take time.
"We will continue this for a long time," she added. "It is definitely one of those campaigns that will continue to be on the budget for years to come."
The Bottom Line
December 2008 Mailing
Goals
- 1% response rate (3,685 total mailed)
- $14,000 average loan amount
- Total loan balances: $504,000
Results
- 36 members responded
- 54 accounts total opened, including 29 auto loans, with total balances of $507,404
- Average loan balance of $17,496.
- Also opened 20 VISA accounts, 19 new checking accounts, and misc. deposit accounts from time of mailing to February 28, 2009.
March 2009 Mailing
Goals
- 1% response rate (3,140 total mailed)
- $14,000 average loan amount
- Total loan balances: $434,000.
Results
- 52 members responded
- 44 loans were opened with total balances of $801,145
- $18,208 average loan balance
July 2009 mailing
Goals
- 1% response rate (5,900 total mailed)
- $14,000 average loan amount
- Total loan balances of $840,000
Results
- 82 members responded taking on quite a few products
- 54 new auto loans with total balances of $1,043,073
- $19,316 average loan amount
Best Practices CUJ 2009
CU: SELCO Community
Best Practice: Refi Auto Loans, New Relationships
Vendor: Internal
