Financial Institution: 1st Advantage Federal Credit Union
Problem: Lack of an effective means of online marketing.
Solution: Use an online sales-survey tool to promote 1st Advantage's big-ticket banking products.
Jim Craig had long wondered why providers of online promotions and marketing tools never seemed to emphasize core banking products in their pitches for personalized, Web-based customer targeting. Amid all the hubbub of merchant-funded offers aimed at boosting card use, most seemed fixated on discounts from nonbank retailers. Craig, vice president of marketing at 1st Advantage Federal Credit Union of Newport News, Va., heard nary a single pitch that focused on enticements for banking items which carry big return on investment for his institution, like auto and home loans. So finally he asked, and lo and behold, got what he wanted.
"When we started talking with Micronotes last year they wondered if I'd be interested in presenting what were basically just different coupons and offers from different retailers to home banking customers," Craig says. "I told them, 'Not really. But I'd like to be able to present the bank's products.' "
This led Micronotes to tweak its KulaMula retail online survey product, originally launched in partnership with Yodlee, the account aggregator and personal financial management tool provider, to fit the specific product sales needs of 1st Advantage. After testing this spring, the $530 million, 57,000-member credit union became in September the first live customer of Micronotes' KulaX — the revamped, banking specific version of the vendor's consumer survey tool.
Here's how it works. When online banking members click to log out of their session, a survey pops up promising gift offers. An example of a KulaX enticement: Certain 1st Advantage customers are offered $200 gift cards if they refinance their auto loans with the credit union.
Product offers are predetermined based on the institution's own workups via internal customer segmentations or next-best product marketing. Based on their responses to survey questions, 1st Advantage customers are offered unique discounts or cash gifts if they sign up for a bank product. The survey enabling customers to "self-segment" further refines targeting, says Devon Kinkead, Micronotes' chief executive and founder.
KulaX generates and digitally presents the questions and promotions online, emails the offers to customers and produces reports on accepted offers to the credit union for remarketing.
Customers can print out and redeem the emailed offers at the branch, or provide promotional codes to call center staff; 1st Advantage accepts auto loan applications by phone. Craig says he's awaiting confirmation that the new loan origination system 1st Advantage plans to deploy next year from MeridianLink (replacing TAPS from Akcelerant) enables online code redemptions.
The test results were very encouraging: KulaX offers generated a 600% boost in sales leads per week for 1st Advantage, plus a 3%-4% conversion rate across a wide range of products, including personal loans and bill payment. An improved version, applying lessons learned during the test, aims to focus the credit union's product offerings and boost remarketing efforts on big money makers, including first and second mortgages, home equity lines of credit, auto loans and new credit card accounts.
The credit union uses DMA Corp. for matrix marketing, but plans to deploy by this month Geezeo's PFM platform to incorporate customer behavioral data into its marketing decisions. 1st Advantage is working with Fiserv, its online banking provider, to add the PFM tab to its home banking page.
KulaX lacks direct feeds from source data such as marketing customer information files and personal financial management apps, which some marketing programs provide. This is not yet transaction-level marketing, either.
But KulaX generates leads using "predigested data very effectively," Craig says. "The assigned cell targeting method is a nice compromise."
Micronotes does seem to take the merchant-funded and PFM-based models a step further by focusing them on direct selling of core bank products, which Forrester analyst Brad Strothkamp calls "a smart play." BillShrink, Cardlytics, Intuit Financial Services and Segmint are among rewards and PFM vendors that have taken steps to aim their solutions more at bank products by moving closer to tracking or categorizing bank transactions.
Vendors of customized ads, like Deep Target, which serves small institutions, also work this niche. Providers like SapientNitro focus on large regional and national banks.
