DENVER -
"We're a lending machine," said Sandra Sagehorn-Elliott, vice-president, customer relationship management at Bellco CU here. "We really believed we were making our biggest dollars from lending."
The $1.6-billion credit union was "shocked" to learn instead that its depositors-nearly one-fourth of the membership-are the heaviest hitters, said Sagehorn-Elliott.
A profitability analytics solution that Bellco launched in 2003 revealed that members with large deposits, as well as members with large deposit and loans, make the CU "leaps and bounds more money" than those members who borrow only, according to Sagehorn-Elliott.
Bellco uses the Open Solutions, Inc., ProfitVision platform, which provides overall profitability of individual accounts and product lines.
Charge-offs and indirect lending expenses were two of the factors that seriously impacted the profitability of borrowing members, said Carol Koth, financial analysis manager at Bellco.
"Our provision for loan loss has been higher, what with the economy, and that has impacted our heavily-loaned members," Koth explained.
The profitability newsflash sent Bellco on a three-year mission to refine its member segmentation program and roll out the red carpet for depositors, Sagehorn-Elliott continued.
"We're always anywhere from 95% to 110% loaned out," she said. "The level of zeal used to be intense on promoting loans. That's not so anymore; our approach is very balanced between deposits and loans."
Bellco also feeds ProfitVision results, along with external demographic data, into MarketVision, a member data warehouse.
Add to that next-likely-to-purchase scoring, credit scoring and at least a dozen other data sources, and the credit union is able to make fairly informed decisions about targeted marketing, said Sagehorn-Elliott.
"We used to send out information about all 500 products to each member," she said. "It was just a data dump.
"Now, we have powerful knowledge about who our members are and how they are using us," said Sagehorn-Elliott. "A lot of opportunities and trends popped out when we started analyzing our members. ProfitVision helped us target those members who don't have the depth of membership we would like to see."
Currently, the Bellco products-per-household rate is 3.13, she said.
Even though Bellco has reached its initial goals, ProfitVision is beginning to reveal a new tear in the seam, Sagehorn-Elliott said. "The current numbers we're seeing out of ProfitVision suggest that we need to revamp our BellcoRewards program," she explained. "The program worked four years ago, but our membership has changed."
Currently, Bellco rewards its deposit/borrowing "Platinum" group-about 8% of the credit union's 150,000 members-by waiving application fees and half of the origination fees on mortgages, or gives them priority status in the call center, among other incentives.
Bellco is dreaming up new approaches to reward members, one of which may include tying incentives to a particular product instead of to the relationship level, said Sagehorn-Elliott.
ProfitVision, part of Open Solutions suite of business intelligence tools, is used by 23 credit unions nationwide.
