GROTON, Conn.-Is the year-end bonus dividend a gift to the member or the CU?
Charter Oak FCU contends it's both-if the reward is correctly structured and marketed. While many CUs have announced year-end bonuses and interest rebates for all members, the $690-million Charter Oak is only giving a cash bonus to selected members who use it as their primary financial institution. Every member who is part of COFCU's "Gold Rewards" relationship program and meets the offering's monthly requirements all year is receiving $100 in the mail this holiday season.
"We want to be our members' primary financial institution and people who bring that kind of business to us deserve to be rewarded," said CEO Brian Orenstein.
Gold Rewards members make up only 5% of the CU's total membership, but account for a "significant" percentage of loans and deposits, the CEO shared. Gold Rewards members must have a checking account, direct deposit of $1,500 a month or four active bill payments a month, an aggregate loan and deposit balance of $20,000 or more, and have all their accounts in good standing. Each month members meet those requirements they receive rebates for all ATM fees, a 50-basis-point bump on CD rates, a 25-basis-point discount on personal and auto loans, free bill pay, checks, traveler's checks, cashier's checks, money orders, and a $100 credit on first mortgage closing costs.
It's the second year Charter Oak is handing back the money. This year it is paying out $271,800. Last year it paid back $260,000.
"That's only about a 4% increase this year over last in the number of members who qualified for the $100," explained Orenstein, acknowledging the CU missed an opportunity by not promoting the bonus last year. "We just mailed a $100 check to everyone who qualified, told them why they got the money, and thanked them for their business. But we did not do any more publicity than that."
'Jammed' Mailbox
Orenstein realized the CU had to step up promotion for the give-back to encourage more Gold Rewards members to qualify each month and to persuade other members to be part of the program. "I remember the affect this had on members last year. My mailbox and e-mail were jammed with thank-you notes," said Orenstein.
To make sure the good deed gets noticed by the entire membership and community this year, Charter Oak has rolled out print advertising that says, "Did you get a $100 BONUS from your bank?" There is supporting media, including radio and web.
This year, too, Gold Rewards members get a polo shirt with the program's logo. "Our Gold rewards members are important to us, and now they will be doing some advertising, hopefully walking around our lobby with their polo shirt on."
Orenstein understands that not everyone can qualify for Gold Rewards, but thinks a lot of members can. "They may not have $20,000 to deposit, but most people have at least $20,000 in mortgage and car loans. So if they want to get into this program they can, but they will have to move all of their business to us, and that is what we are looking for."
