PORTLAND, Ore. — Consumers will move money if the pricing is right, as Advantis Credit Union here has learned.
At its new Hillsboro, Ore., location, the $723-million CU gained more than $20 million in deposits during a two-day grand opening in mid-March and signed 394 new members. Spillover from the event also helped Advantis reach $40 million in deposits at the new office by early May, and sign a total of 838 new members.
Wendy Edwards, Advantis VP of marketing and HR, told Credit Union Journal that traffic was so heavy at the grand opening that some people had to wait 45 minutes to open a new account. "We had to give some people who couldn't wait rain checks," she said.
Moving into a community in which Advantis was not well known, the 39,000-member credit union understood it had to come in with some strong offers. During the grand opening only, the CU offered an 11-month, 5% APY CD, and 2% cash-back on an auto refinance over $10,000. It also promoted its Fusion Checking, which paid 3.5% APY at the time.
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Edwards estimated that 70% of the new deposits went to the special-rate CD, and the rest to Fusion Checking, which averaged more than a $6,000 opening balance during the grand opening. The special-rate CD was only for new money and carried a $5,000 minimum and $50,000 maximum. The average deposit has been just over $33,000, and 27% of deposits have been from existing members.
"We knew we had to be pretty aggressive with this branch opening," said Edwards, who explained that the credit union's ongoing efforts to return a great value to members is also being recognized by more consumers. "I think people are wary of the stock market and are doing their research. If they look at our rates for loans or deposits, we are always very favorable. We rank in the top 1% of credit unions nationwide (by Callahan's) for the value we return to members (CU Journal, March 23). I think we are seeing a large number of people join the credit union who never considered being part of a credit union before."
At press time the credit union's CD rates ranged from 1% APY to 2.30% APY, depending on the balance and term. Advantis risk prices its loans: new car loans up to seven years started at 5.19% APR, and a 30-year fixed rate mortgage came in at 5.43% APR.
Edwards assured that Advantis is not being short-sighted, and that the costs to attract the new business will be recovered through deepening relationships with the new members. "We had a trained sales team in place at the grand opening to cross-sell products and services, and we are continuing to follow-up with new members," Edwards said, noting that it's too soon to gauge those results. Advantis relies on a marketing matrix to determine which additional products to promote, and when.
Some of that follow-up will likely be for loan products, since Edwards acknowledges that "we certainly are in a strong lending position now." Edwards said the credit union will first promote seasonal products-home equity and first mortgages-but soon will "get some aggressive loan offers out the door," as well.
Advantis spent $63,000 to advertise the grand opening, with a significant portion going to a 22,000-piece direct mailing to local residents. The effort included a ticket for prize drawings for gifts ranging from umbrellas to a flat-screen TV. "We also advertised in the local newspaper and on the radio," explained Edwards, who added that the credit union gave away a trip for two to Hawaii to those who came into the branch and entered the trip drawing.
Business results from the new branch are helping Advantis track at about 10% growth this year in a market in which 3% growth is typical, according to Edwards, despite setbacks form the corporate assessment. According to March 30 call report data, Advantis reported a $5.3-million loss for the first quarter, when it booked its corporate assessment. The CU's capital ratio stood at 10.4% before the write-downs, and Edwards expects it to land at 9% by year's end.
