No matter which payment options and products a credit union offers, those portfolios will only grow if it commits to promoting them, according to several card services experts.
"I guess the bottom line is do something, anything, to promote your cards," said Glen Lee, SVP-sales and marketing at TNB Card Services. "We offer a host of marketing materials and campaigns, and we have charted a comparison of our clients who participate and those who don't. Last year, the outstanding [plastic card] balance for pariticpants grew by 5%, compared with a decline of 3% for non-participants. Similarly, participants' accounts on file grew by 2%, while non-participants decreased by 2%. Net retail sales were up by 11% for participants and up only 4% for non-participants. Interest income grew by 1% for participants and decreased by 4% for non-participants. Just by doing some promotion-even just reminding your members that you even have a program-will help spur growth."
TNB's marketing calendar includes summer usage and retention programs that center on summer travel, for example, where any travel and entertainment expenses accrued during summer are put into a separate, lower interest-rate "bucket" for a limited time. A similar program is scheduled for the holiday shopping season, as well. Convenience checks are marketed at tax time, as well as for back-to-school and holiday shopping, too. Other programs play up balance transfers and platinum cards.
An old benchmark program called 80/50/12 has been resurrected at Payment Systems for Credit Unions (PSCU) in St. Petersburg, Fla., according to Paul Steger, debit services manager. "The goal is 80% penetration. Of that 80%, we want 50% of those to be active, with members using the card three times a week or 12 times a month, hence 80/50/12," he explained.
Cash Incentives
One way to help boost those goals is to use a cash rebate incentive for using the card, Steger related. And to make the most of direct mail campaigns, PSCU avoids mail pieces that have to be opened.
"We use a lot of post cards. They don't have to be opened, and they're cheaper and can be very effective," Steger offered. "Or we use statement stuffers, so they're inside something you're going to open up anyway."
Another way to keep members from throwing away credit union mail solicitations is to keep direct mail only "for when it really counts," said Jon Osterberg of Washington School Employees CU, Seattle. "We solicit so infrequently through the mail that when our members do get something in the mail from us, they do open our pieces," he suggested. "We don't hit them up all that often. Plus, we have very close ties because we serve only school employees and their families, so there's a sense of community and loyalty that really helps us out."
Credit unions in general are more likely to see a higher response rate to direct mail solicitations because they aren't true mass mailings, added Tony Rizzo, president of Liberty Creative, Mounds View, Minn. "We start with the data, so we start with the right person. We're generally mailing to small segments," Rizzo explained. "Our average client has 30,000 members, and the average mailing is about 3,000 pieces. We use the MCIF, data processing and secondary research to determine the mailings. Then we move to the creative, where we have multiple versions of the same offer based on life stage. So, everything we do is highly personalized."
Tricky & Trickier
"It's tricky to get people to open direct mailers, and it's almost as tricky to get credit unions to do it," joked Lee. "We tested a program last year where the credit union provides us a list, we screen it, we scrub it, we produce the marketing materials and drop it in the mail. We even take care of receiving the responses, and we do all that for free. On the back end, we charge a fee for each new account opened as a result of the program. Our response rates are much higher than the national average for credit cards. Even the lowest response rate was double the national average, and the highest response rate was in double-digit figures."
