'Urgent' Effort Leads To 15% Income Increase

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LAKE JACKSON, Texas-Overdraft revenue at TDECU is up 15%, thanks to a comprehensive marketing campaign that positions courtesy pay as a member benefit.

"Courtesy pay can help you handle all of life's unexpected events!" has been the message delivered to TDECU members, who have responded-75% of eligible overdraft users and 84% of all members who actively use the service have opted in. "There are things that come up and you need access to funds when you least except it. That's what we have been telling members," explained Stephanie Sherrodd, SVP-member services, who believes the new overdraft rules present a marketing opportunity.

The $1.6-billion CU did not wait to take advantage of the rule change, starting marketing in April of 2010 with a multi-channel effort that included mainstream media, direct mail, e-mail , website, and live and automated outbound calls. "This has been an organization-wide effort," stressed Sherrodd. "We started an employee incentive contest to get our staff engaged. We believe that contributed a lot to employees talking to members about overdraft, which is an important part of the entire effort."

The marketing push led to overdraft revenue increasing by 15% over last-year's levels starting in June and continuing after the new rules kicked in. After Aug. 15, TDECU has employed e-mail and text message communication for members who have not opted into courtesy pay and have had transactions denied. "If we have their cell phone numbers we send a text message saying if you need help give us a call and we can opt you into courtesy pay immediately and rerun the transaction. We have sent out over 500 text messages in the two weeks following the deadline."

With $800,000 a month in overdraft revenue at stake and TDECU earlier in the year conservatively budgeting for a 50% decrease post Aug. 15, the jump in revenue is a windfall for a CU already enjoying 70 BPs of ROA this year. "We have overdraft in our marketing plans through October, but had planned to taper that off," shared Sherrodd. "Based on the results so far, we may change our marketing approach going forward."

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