DALLAS – Acquiring new cardholders isn’t always as easy as pre-qualifying members and letting them know about your below-market rates, but this simple strategy paid off for credit unions participating in TNB Card Services’ 2006 spring card acquisition promotion.
At Harlingen Area Teachers’ Credit Union in Harlingen, Texas, for instance, the acquisition promotion far exceeded expectations as well as the credit union’s annual goal for new card accounts. By pre-qualifying members for the campaign – its first such acquisition promotion ever – the 13,883-member credit union identified members with targeted FICO scores. By strategically targeting high-scoring members and offering them a 60-day introductory rate of 3.9%, the credit union received a 2.45% open rate from the 1,549 members solicited.
In a little more than two months, the promotion generated 50% more new accounts than the credit union’s goal for the entire year.
“We felt our portfolio had been underperforming,” said Missy Morrow, CEO of Harlingen Area Teachers’ Credit Union. “We knew we had to try something different to get the word out to our members about our attractive rates. By pre-qualifying members, we were able to target our membership with rates they couldn’t pass up. It also helped us focus our effort on acquiring quality cardholders.”
For AMOCO Federal Credit Union of Texas City, Texas, the acquisition promotion was its first since 2003. The credit union targeted members with average scores, in order to allow more members to respond. With an introductory rate of 6.9% for six months and no fees, AMOCO received a 1.56% open rate for its efforts.
Vicki Walker, credit card manager of AMOCO Federal Credit Union, explained that “This was the first acquisition promotion we had done since we stopped offering a classic card. Because of TNB’s flexibility, we were able to modify the criteria to our specifications, which enabled us to actually target the promotion to members with an average FICO score.”
With more than 43 different offers and rates from 0% to 6.9%, the acquisition promotion as a whole generated a 0.75% open rate, more than double the national average for this type of solicitation, for the participating TNB processing clients.
Another top performer was The Education Credit Union of Amarillo, Texas. A firm believer in marketing its card program, it runs an acquisition promotion at least once a year. This year’s generated an open rate of 1.49% among the 3,025 members solicited.
April Altom, director of marketing for The Education Credit Union, said this year the credit union “did more than just send out the direct mailer for the promotion. We spent a lot of time analyzing the rates and benefits of competing card offers. We featured a report on our findings in our member newsletter to illustrate how our credit card compared to national cards. The newsletter story coincided with the promotion mailer. It enabled us to emphasize the value of our card.”
In Altom’s view, “Acquisition promotions are an ideal way to increase cardholders. As long as we continue to see an increase in cardholders from this type of promotion, we will continue to do it.”
About TNB Card Services
TNB Card Services, owned and directed by credit unions since 1976, provides electronic payments processing, as well as an agent issuing solution for credit unions nationwide. Serving more than 450 financial institutions and managing more than 1.6 million cards, Dallas-based TNB enables credit unions to enhance member loyalty through credit union-branded card products. For more information about TNB, go to www.tnbcard.com or call 1-888-742-0260.
