The I Quit KIT

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One credit union that challenged the "IQ" of prospective members is reporting a surge in member sign- ups.

Pinellas County Teachers Credit Union, Clearwater, Fla., spent 18 months developing a "IQ Kit" aimed at getting eligible non-members to move financial institutions. The kit consolidated all of its account-opening and service sign-up forms into one easy-to-use package.

The "IQ" in this case stands for "I Quit" and takes dead aim at overcoming the objections prospective members have for not closing accounts elsewhere and moving to the credit union.

Created in August of 2001, the concept took approximately two months to really take hold among the credit union's member service reps. In its first six months, member growth was up 48%, according to Leslie Galea, the former VP- marketing with Pinellas County Teachers who has gone into private consulting and is about to join agency Englehart/Dicken as a vice president.

Speaking to the CUES Marketing/Operations conference here, Galea noted the barriers to getting members to switch all their business are well known, noted Galea, including "too much trouble," not enough locations, don't want to fill out forms, etc. It's a list every member service rep has heard again and again, Galea related.

The overflow attendance at the session demonstrated the challenge many credit unions feel in getting prospective members to switch, and many in that audience quickly added other reasons prospects won't become ex-customers of banks, including limited ATM networks and checking accounts that are one small deposit ahead of bounced checks as other reasons for not switching financial institutions.

The Cost of Package

Produced at a cost of $1.28 a piece, the four-color kit (which has been copyrighted by PCTCU) represents the whittling down of all the forms that were previously used by MSRs into a more compact package that requires approximately a half-hour to complete.

Included in the kit are a membership benefit list, a "how-to" form for filling out the kit in the event an MSR isn't present, a "Let's Do It" form, an automatic payment form, a close-account form, ACH forms, coupons offering savings on products, and more.

The "Let's Do It" form is what Galea described as the "heart and soul" of the packet. It was also the issue over which marketing and operations most readily disagreed, she noted, pointing out that marketing wanted a form that was simple and fast, while operations wanted a form that "fit the system." A compromise was eventually reached.

"This is the first form that the MSR fills out with the member," she said. "One thing you'll notice is that every (product and service) on the form is checked. That's what we called 'assuming the sale.' " Those "checks" include every product the credit union offers, with the option given to the member to opt out of any product he or she didn't want. Members simply sign the form to sign up for the whole menu.

Galea said not one member has opted out of the services that were automatically "checked," and noted that usage of those products is approximately 60%. She also said the credit union has run into very few problems with members who were later denied credit following a credit check. "I think most people who have credit challenges know they have credit challenges, and they're not surprised when they're turned down."( For members with bad credit histories, Pinellas County Schools offers a "Builder Account" that allows members to build a credit history.

She added that the turndown rate in the program is approximately 50%, about the same as without the IQ Kit. A credit report is pulled with every new member filling out the IQ Kit.

For the close-account form, the credit union faxes it to the previous financial institution, or gives it to the member to take it to their previous bank or credit union. Galea said the credit union has not been challenged by any large bank saying it would not recognize the close account form.

Also included:

* The Direct Deposit Payroll form is two pages and has been designed to be as consistent with as many company payroll forms as possible so that it would be used by as many companies as possible. Most firms have used the form, she said.

* The ACH form was an equally simple, one-page form. None of those have been returned, said Galea.

*The bright-yellow mini-app, which Galea acknowledged is an "ugly form," has nonetheless been an effective means of generating a loan. Members are given the form to keep in the kit to be used at any time in the event a subsequent loan promotion appeals to the member.

* The last form in the IQ Kit is coupons, which Galea called "the best thing we put in the kit to promote usage." Coupons include a free order of checks, a half-percentage-point off on a transferred loan, a quarter-percent off on payroll deduction, and more.

Pinellas County Teachers used a "kick-off" meeting to launch the IQ Kit, and Galea acknowledged that she met with resistance from employees to the kit who didn't like the change. "At first, the MSRs started stuffing the old black-and- white forms into the IQ Kit," she said. "But now after using it for six months and they see the products and services they're bringing in, which have doubled, they've started to love it."

PCTCU is averaging approximately 700 new members per month, growth it is attributing to the IQ Kit.

The Time Involved

How long does it take an MSR to work all the way through an IQ Kit? Approximately a half-hour, even when members don't have all the information they need. "The goal was not to have the member take the forms with them," she said. Galea added that the IQ Kit did increase branch traffic, but it decreased the time with each member.

Galea said PCTCU sent out postcards to promote the IQ Kit. The cards were sent to non-members who met certain criteria (homeowners, income level) in a three-mile radius around its branches. Posters were also distributed to SEGs. Galea said the second and third mailings on the IQ kit actually pulled stronger than the first, with a 13% response rate to that third mailing.

Posters in branch asked, Want to feel smart? Use your IQ Kit." As an advertising theme, PCTCU has been using "Smart. Very smart." Galea said many current members have also used the kit to sign up for products and services they didn't have, even through that hadn't been a goal.

Galea said that one area that the credit union has found terrific growth opportunities are in so-called "indirect members," that is those who are members only as the result of having gotten a loan at an auto dealer. PCTCU has found that most of its single-product members are these indirect members.

As a result, the credit union has moved to distribute the IQ Kit to dealers that have agreed to distribute it. In addition, it has boosted marketing to those members.

Members who complete the IQ Kit are hit with one follow-up mailing per month for six months. Galea said the credit union found long letters with a coupon pulled almost no response. "They've been replaced by bright, oversized, round postcards that change faces and messages," said Galea.

The CU preprinted the pieces in shells, with color on one side and blank on the other so it could drop in black copy later and to avoid having to discard any pieces.

"And if your MSRs aren't saying to new members, 'Thank you and welcome to the credit union,' they should start," Galea offered. "They should say, 'While you're here I'd like to give you three or four more IQ kits to take with you. Get their relatives, co-workers, children and every other referral. If you're not asking for referrals at the new-member, happy-point-of-contact, you're missing the boat."

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