Study Examines Credit Union, Member Behavior In Online Services And Usage

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Credit union marketers no longer view offering online products and services as a means of differentiating themselves from competitors, but as a necessity for doing business, according to a recently released study on online marketing trends.

The study also found that individuals who use online services are the most desirable members for credit unions.

The findings were included in "Online Marketing: Effectiveness and Impact on the Credit Union Industry," a study distributed to approximately 75 credit union marketers attending a pre-conference workshop at the 12th Annual CUNA Marketing & Business Development Council Conference.

The report, which is available for free online, was the result of a study commissioned by CUNA Mutual Group, CUNA, the CUNA Technology Council and the CUNA Marketing & Business Development Council. Research was conducted by the University of Wisconsin E-Business Consortium (UWEBC), in Madison.

Members using online services are proving more valuable to credit unions than members who do not use these services, said Marc Gagne, CUNA Mutual's marketing campaign manager, who presented key survey findings at the workshop. "Online members are more profitable, have higher loan and deposit balances, respond better to marketing and cost less to serve," Gagne said.

"They also have more assets, higher income and better credit scores than their slightly older offline counterparts," he added.

Respondents indicated they prefer to promote their online services using offline marketing tactics, including branch staff, call centers, print newsletters and statement stuffers. "This could be part of the answer as to why some credit unions struggle to gain online members. Websites were ranked high as a channel, yet email marketing was not nearly as common," Gagne said.

The study's findings are based on a national survey of credit unions of all sizes and a focus group of marketing executives who provided insights and validated the findings, said Eric Gagliano, vice president of marketing with River Valley Credit Union, Miamisburg, Ohio. Gagliano is a member of the CUNA Marketing & Business Development Council Executive Committee and participated on the study task force.

"The survey results provide great insights into the online marketing trends among today's credit unions," said Gagliano. "Clearly, credit unions of all sizes said their members expect banking services to be available online. Not too many years ago, offering online products and services was a way to differentiate a credit union from the competition. Now, it's become a necessity for doing business," said Gagliano.

Despite the increase in importance and effectiveness of online marketing, credit unions of all sizes cited many challenges. These include:

* Raising member awareness of online products and services.

* Increasing member access to the Internet.

* Assuring privacy and security.

* Building an accurate email database.

* Devising targeted email campaigns.

Workshop co-presenter Paul Jaramillo, chief operations officer of DocuMatix, LLC, Salt Lake City, offered participants some tips on meeting these challenges. He urged learning as much as possible about "phishing," including how to spot a phishing email, and understanding the CAN-SPAM Act.

"Today, 65% of all e-mail is spam, and there is a concerted effort by companies and individuals to limit the receipt of these nuisance emails through spam filters. Unfortunately for credit unions, legitimate e-mails they send to members are sometimes suspected to be spam and not getting to recipients. That's why it's important for credit unions to know how to avoid having emails get caught in these filters," Jaramillo said.

The online marketing survey builds on a series of successful annual research projects that have been conducted collaboratively by CUNA Mutual,

CUNA and UWEBC. "The project team compiled information from a representative group of credit unions having different sizes and locations," said Alfonso Gutierrez, UWEBC associate director for research and education. Information gathering and analysis methods included an online survey, a focus group with eight credit union executives, and an in-depth case study.

"This type of collaboration among credit union industry leaders, in conjunction with academia, is essential to helping credit unions compete in today's challenging business environment," said Cheryl Sorenson, director of CUNA councils.

Visit www.cujournal.com.

CUJ Resources

Results of the study are available online at the following websites: www.cuna.org; www.cunamutual.com; and www.uwebc.org.

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