Using Airlines' Model, Affinity Plus Pilots Its Own Loyalty Reward Program
Seeking to reward its 126,000 members for their various levels of loyalty, Affinity Plus FCU here has rolled out a program that is modeled on the Frequent Flier programs offered by the airlines.
One key, it believes, is that it has attempted to base the rewards on what members need and now what the $1-billion credit union believes they need.
"We're a very member-centric organization," according to Elizabeth Hayes, SVP and chief relationship officer.
Affinity Plus created its Member Loyalty Program, free to all members, and modeled it after airline frequent flier plans for simplicity. The program allows members to earn points that can be redeemed for a higher rate on certificates of deposit (CD), a lower rate on a car loan, or even to buy collared shirts with the Affinity Plus FCU logo on it.
Focus On Existing Members
Hayes said Affinity Plus concentrates on existing members versus seeking to attract new members, and had no desire to give front line staff something they would have to push onto the membership. Hayes said Affinity Plus knew of other credit union plans for member rewards, but they were focused on the path the credit union wanted to take and not the goals and desires of the member.
"They set them up around credit union goals and started with a balance sheet goal," she said. "This starts with member activity."
Starting in July 2005, members earn one point for every dollar paid in finance charges or dividends earned. Members also earned 100 points for each year spent with the credit union and 100 points for referring a new member. When members accumulate 2,500 points, it can be used for a 25-basis-point rate reduction on loans, or as a 25-basis point bonus on the prevailing certificate rate. A member who has earned 5,000 points is eligible for a 50 basis point discount or increase, respectively. In turn, as members get higher rates, they also get more reward points.
One surprise: many members have elected to put their points toward a credit union shirt. "I wasn't sure at first. A lot of our members like that," she said.
A Simple Plan
Hayes said it's a simple plan to follow and that members are used to the model as frequent flier programs have been around so long. Hayes said a company named Point Tracks "tracks" members' points and informs Affinity Plus, which in turn informs members in their monthly statement. Hayes said Point Track costs from $20 to $25,000 per year to track member points.
Hayes said the goal of the rewards program is to compensate loyal members for activity they're going to do anyway. For example, a college student with a simple checking plan and debit card will have different account activity and levels than a local bakery with six delivery trucks bought with a credit union loan.
"They can both earn points their own way," she said.
Hayes said the loyalty program has led to a movement to Affinity Plus of millions of dollars in deposits members have had with other financial institutions. Since the July start, Hayes said Affinity has had $1.8 million in new auto loans or loans brought over from other financial institutions. The credit union has been sponsoring focus groups and performing surveys to study the program's impact.
"Our members have been very, very appreciative," she said.
Hayes said many CUs, "big and small," have heard about Affinity Plus' plan and are calling with questions on the details of the program.