Time to Kick Butt on Credit Card Promos

By John Blom and Margie Church

According to Bankrate.com, the average interest rate on cash back cards is 16.39%. Balance transfer cards come in at 16.14%, and rewards card rates at 15.48%.*

Those rates are higher than most credit union credit cards. Heck, they're even higher than a lot of personal lines of credit that credit unions offer, too. Lots of these cards feature 0% introductory rates and afterward, a variable rate. All this has me wondering why credit unions aren't knocking down doors with summer credit card promotions. Last time I checked (which was this morning), Americans were still trying to pay down their credit card debt and carefully manage any new debt.

If your CU offers a rate lower than these and especially if you have a fixed rate and no balance transfer fee, this seems the perfect time to offer a pre-qualified or pre-approved offer. Dig into your data to find those members without your card and give them a hand up, credit unions! 

A razor-sharp direct mail piece that illustrates the savings could be a welcome sight in your members' mailboxes. The lower rate just might make them feel better about using credit to have a little fun for a change. Transferring a balance to save on interest payments and pay off the debt faster can be a real relief.  

Include a Personal URL with your direct mail and email to make it easy to communicate to your member and get an immediate response. Sending an email as a follow-up to your product offer is also a friendly reminder!

Using pre-screened data makes this campaign targeted and super cost-efficient. The end result is a higher ROI and a high-five from your lending department. Maybe you'll even have some budget left over to run a second flight. And we all know how important frequency and reach are. 

In the member's eyes, you guys are heroes, and the relationship between you deepens. Looks like a win-win for everyone.

Summer credit card promotions.  Simple. Fast. Profitable.

Bankrate.com rates 6/21/2012.

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Stop the Slow Leak in Your Auto Loan Portfolio

 By John Blom and Margie Church  Originally published on CUinsight.com.

Vehicle purchases frequently are impulse buys, and auto loans have become serious bread and butter to many credit unions. The wise marketer knows that getting a member's repeat business can't be an assumption. It must be earned as part of a strategic effort. 

"Hail Mary Marketing" has its place as a solid prospecting strategy. Use it to target members without auto loans and to create awareness in the communities the credit union serves. It works. However, this strategy isn't the best way to retain the valuable auto loan business the credit union already has. You need to have a more focused effort.

Stop-Leak Retention Strategies

We recommend developing a solid retention program today to keep millions of dollars in auto loans from leaving your credit union tomorrow. How? Bi-annually, append to your data with vehicle values to provide a good guide to how much equity a member has.  Sort the data, and create targeted messages depending on where this member is in their auto loan lifecycle. 

Here are the important markers to look for:

      The vehicle's trade-in value is higher than the loan balance. This is an open artery for an impulsive purchase. These loans are most vulnerable right now. These members must be hearing from you very regularly to ensure you're not forgotten. Pre-approval and special financing incentives via direct mail and email are good tactics to use. Perhaps a personal call from member services or the loan department can be made, too. 

     The vehicle's retail value is higher than the loan balance. Obviously these members can sell their vehicle outright, and use the money for a down payment on something new. The loan is vulnerable if the mood strikes. Increase your communication frequency to these members. Remind them about the benefits of pre-qualification, low rates, additional discounts, and any services that might steer them back to the credit union when they make a move. A refinancing offer to access the cash equity is something to consider, too.

     The member has no equity. Contact them a few times a year to illustrate their equity progress. Communicate sound financial practices and other credit union services to deepen the relationship with you.

Budgets are still very tight in America, and people save money by financing through a credit union. Help members avoid the costly mistake of choosing dealer or bank financing.  A strong retention program throughout the loan lifecycle reminds them their credit union is the best place to come for their vehicle (and all) financing needs. It strengthens your auto loan portfolio and other credit union products and services, too.

 

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Fabulous FABs: Features, Advantages, Benefits

By John Blom and Margie Church

Every product or service has these three components. Sometimes we have trouble figuring out the differences among them. When you identify the FABs of your product or service, you'll know how to best position it in the market so it stands out, not blends in with the competition.

Occasionally, we see only the feature stated in an ad. Consumers are have to figure out the advantages and benefits themselves. Will they guess the answers you wanted them to? Want to bet those products sell poorly? Like leaving off a strong call to action, not stating the clear advantages or benefits of whatever you're selling is like giving someone a flashlight without batteries. It totally defeats the purpose of advertising. 

Show me how!

I'm a fan of the blank sheet of paper. Start with the product name and brainstorm the answers. Bring member services in for the activity. They have front-line information you can use. Your answers are likely to be different, from mine because of your individual situation. That's terrific. Don't censor yourself. You can erase later.

Product: Credit Union Credit Card

FEATURES (Unique Value)	ADVANTAGES (How Product/Service Makes Life Better/Positive)	BENEFITS (Quantifiable Results)
9% APR	Cheaper than many bank and store credit cards.	Save money in interest payments and fees.
	More financially responsible, smart.	Pay off debt faster.
	Feel better when using the card.
Fixed rate	Cost of credit more predictable than variable rate.	Debt-free faster. Saves money.
	Easier to manage budget. Payment is more predictable than variable-rate cards.	Less stress.
	Easier to determine cost of credit if balance is carried.	Better budget management.
	Not an introductory rate, no unhappy surprises	Save money, predictable payment, easier to budget, pay off debt faster.
No fee for purchases, cash, transfers	No financial penalties.	Save money.
	Don't have to remember rates or carry multiple cards.	Convenience, less stress.
	More financially responsible, smart.
Rewards	Feel-good prizes and incentives given to use the card. Competitor's cards don't.	Enjoyment, fun.
	Status/prestige elevated to carry this card compared to other cards.	Consumer loyalty acknowledged.
Automatic payments	One less check to write/payment to manage.	Convenience.
		Protects credit rating when payment is never late.
		Easy to manage account.
Local Credit Decision	Personal decision based on an individual, not a number or corporate sales goal.	A less-than-ideal credit score could still qualify for a great, money-saving card.

I see some buzz words on the chart – SAVE, CONVENIENCE, EASY, SMART. One or two of them could be used in an attention-grabbing headline. You might illustrate one or two of the strongest advantages in your copy – perhaps in a rate comparison or payment example. End with the most important benefits. You don't need to use all these FABs in your advertising. Doing so would be cumbersome and clutter your ad.

Hidden Benefits

Leverage your concept and content in as many ways possible to save money, reinforce  message, and increase frequency. I call this giving a concept "legs."  Hand a chart like this to tellers and member services as a cross-selling aid. When staff members understand exactly what to say, the process is easier and more comfortable.

Take the time to identify your FABs and you'll be seeing FABulous results soon, too.

Do you take the time to identify FABs? How do you use it to support member services?  What's worked? Share! We learn from each other.

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Did you miss these?

By John Blom and Margie Church

We spend most of our time at our "home" blogging about credit union marketing techniques and philosophies. As always, our goal is to help you become better and more successful at your job. Recently, our peers have published some of our work. If you haven't read these articles, please do. You're bound to gain some new insights.

At The Financial Brand:
Harnessing the Power of Email: 3 Strategies for Financial Marketers
Learn ways to build success and confidence using email marketing.

Targeting Gen Y: Rich Opportunities with Direct Marketing
This diverse audience has lots of needs and issues. Learn how to engage the group with age-appropriate messages that aren't expensive or complicated to create.

At CUinsight:
Stop the Slow Leak in Your Credit Union's Auto Loan Portfolio
Building a solid loan retention program today can help you from losing millions in future auto loans.

We'd like to hear your thoughts. Please leave a comment, and if you like what you see, please subscribe to our blog.

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Wires crossed on cross-channel marketing?

By John Blom and Margie Church

Lately, we and other marketing firms have been making a lot of noise about two very traditional marketing methods: direct mail and email. Time and again, it seems credit unions have misconceptions about how these different channels (print and electronic) work together. Some have the notion direct mail is too expensive or email is just plain worthless. After all, what good is the campaign if it ends up in the spam folder or Tuesday's trash bin? If you're still holding onto those fears, it's past time to learn more about how to use this combination effectively.

You might be wondering whether we have a vested interested in one over the other. The simple answer is no. Can we create an effective direct mail or email campaign? Absolutely. But we are stronger advocates of cross-channel marketing. Doing so doesn't have to add significant cost, but it can significantly increase ROI.

"I Need Advice."

When you look at your budget compared to your objectives, you might think you need to put all your eggs in one basket and do a bang-up job. You'd be right about the bang-up part. You might also be thinking you should create this fabulous, one-time campaign and lob it into the market. You'd have some success. Hail Mary marketing has a role, but it's a flash in the pan. You need frequency to make your brand memorable in the marketplace.

You've bumped into a brick wall. Before frustration takes over and you do the same thing you've always done or worse yet, do nothing, step back and ask yourself what really needs to be accomplished. Write that down. Now think about all the ways you could communicate that information to the market. Don't censor your ideas. That's the fun of brainstorming.

I bet when you look at the finished list, you'll see some crazy ideas and you'll also have listed things like send a letter, offer a free workshop, put a sign in the branches, etc. Those are perfect examples of cross-channel marketing. You already understand that doing a combination of these things puts your credit union's name and offer in front of members and non-members.

"Yeah, but doing all that stuff is really expensive, and I'm just one person here."

Simplify. Think about the times you've seen a car ad, for example, on television, heard it on the radio, and maybe saw it in the Saturday newspaper. They used the same graphics and message, just re-purposed for the different channel. And you remembered that, didn't you?

Here's how you can do it, too. Choose a strong headline and graphic. Start with direct mail. Use data systems or MCIF to identify the members and prospects most likely to qualify and/or respond to your offer. Compared to a mass mailing (prospecting only), the number of addresses could drop significantly by doing this. That's okay, because this group of people is most likely to say yes, and that increases your ROI.

Next, grab qualified member email addresses and send with the same offer the following week. Use the same attention-getting headline and offer. Use a PURL to make responding a no-brainer. (Do you realize that emails and PURLS can cost as little as $0.05 per address?)

Then, leverage this program further by turning your headline and graphic into a web banner. Create a statement insert and in-branch signage for prospecting to members and non-members. Tweet about the promotion, put it in the newsletter, and post it on your Facebook page. If you blog, figure out a clever way to turn the offer into a relevant blog subject. None of these activities has to be expensive, but each time they're seen, they make an impact.

Frequency and reach matter!

A combination of scheduling and the media you use, plays on the channel strengths, impacts your audience more effectively, and brings the highest response. You might achieve awareness of your message in five to seven exposures. People might take action after 11 exposures. Can you see now why a one-time blast into the market will have limited results? And the more time that lags between your marketing efforts, the harder it'll be for people to stop saying, "Who?" and start saying, "I'm going to the credit union to check this out."

By using a cost-efficient service-provider, and keeping a level head about where to sink your cash, you might be able to rerun the campaign a couple of times. You keep reaching out and making an impression on that member wherever they are. In the case of prospecting, even if the recipient isn't ready to bite on the current offer, you've made an impression. Keep it up, and when the time is right, they'll be at your door. You'll also save time and be smiling when you report your results to the Board. Cool.

That's the scent of cross-channel marketing success.

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Command Performance: Direct Mail

By John Blom and Margie Church

Many credit union marketing budgets were slashed or suspended during America's Great Recession. Now, these CUs are fighting to get back in the market, while others are taking advantage of loan opportunities that have been hard to find in the past few years.  

We often hear that direct mail is too expensive and while it certainly can be, as a rule it doesn't have to. Ask yourself, is your credit union's marketing viewed strictly as an expense or is it an investment? In these lean times, take a realistic approach to what you need to accomplish and we'll bet that winning a design award isn't going to be part of your annual objectives. Furthermore, if you're sitting smack-dab in the middle of strong competition, an annual squeak from the cheap seats isn't going to make you the credit union hero either.

So, how can direct mail help solve your problems? Direct mail is the only tool that is going to give you complete access to members and non-members.  Don't believe me? Do you have every member's email address? Have the ability to get the email address of every person within a two-mile radius of every branch? Can a newspaper ad speak personally to every reader who doesn't have an auto loan at your credit union? No, no, and no.

Direct mail can do all of that and much more. As a stand-alone technique, it has the broadest reach. Use it to retain, acquire, and prospect for business within your membership and the communities you serve. Segmenting your data will refine the list to those most likely to respond. In the end, you might produce fewer pieces, but you'll have minimal waste and a higher return on investment.

Electronic gadgets are all the rage, so many credit unions have abandoned tried and true direct mail for trendier tools. We wholeheartedly agree electronic channels are important, lightning-fast ways to reach out, but they aren't effective for prospecting. Direct mail, however, leverages your creative investment and budget, and increases frequency and reach. When combined with email and prospecting techniques such as in-branch materials, newspaper ads, and statement stuffers, you'll have a very powerful campaign that reaches far and wide to reinforce your brand and snaps up those loans.

You might be thinking direct mail is an old school technique, not worth pursuing regardless of cost. Consider this: as traditional mail volume decreases and electronic mail and social media increase, your chances of being noticed and read better than ever. An over-sized postcard is like a mini billboard in the mailbox. The open rates on letters from "your financial institution" are shockingly high.

If you still believe direct mail suffers under the stigma of junk mail, truthfully, you're not using current techniques and should switch marketing partners. Match-mail envelopes, as opposed to window envelopes, are only one way to let the recipient know they need to open this letter. Variable data fields personalize everything to a high level, too. That's only the beginning.

The market for loans has shifted to more solid footing. If you're looking for a way to capture this business, and reacquaint members and non-members with your credit union, direct mail should be your first choice.

Pinpoint Direct Marketing creates data-driven, electronic and print marketing campaigns for the financial industry. Its customized campaigns achieve excellent results without premium costs. Learn more about Pinpoint Direct Marketing at www.PDMKT.com or call Kerry Blom, owner, 866-784-7555.

Here and Gone

 

By John Blom and Margie Church 

Sometimes we get so busy reacting to the current trend, that we lose focus on the future. Yes, auto buying season is upon us and rates are fantastic. This year is projected to be very strong for manufacturers and dealers. Consumers are loosening their purse strings and shopping for vehicles to replace those they've held on far longer than they historically have.

With auto shows popping up everywhere, it's the perfect time to run a pre-approved or pre-qualified promotion to your members. Arm them with money to shop realistically for a vehicle they want— and you keep their business. Everyone is happy

Going after brand new auto purchases might be a no-brainer, but what about the members who have equity in their vehicles? They are ripe pickings for a trade-in and a new loan, too. Have you made the credit union's rates and terms top-of-mind to help ensure these members don’t make the mistake of financing at the dealership or bank? Ouch.

And as long that new car scent is in the air, this is a great time to scrutinize your entire auto loan portfolio, not just a bottom line target. Take a look at the exposure you've got from loans coming to term in the next twelve months. Formulate a strategy to reach these members in case they're thinking of trading, or want to use the equity in their vehicle for another purpose. 

While you're investigating, learn the health of your auto loan portfolio and the quality of your VIN data. Having this information helps you recognize the exposure your credit union has in potential loan turnover and loss. Millions of dollars in auto loans could walk out of your door to a bank or dealership.   

And you'll be thinking those loans were here and now gone.

Is your credit union doing any of these things to hang on to its auto loans? Share with us. We're always interested in learning.

Pinpoint Direct Marketing exclusively serves the U.S. credit union market. We provide excellent, turnkey or a' la carte creative services at a great value. Click to learn more about us.

Seven Ways to Change Your 2012 Business Landscape

By John Blom and Margie Church

At this time last year, many CUs were idled back, waiting for the New Year to reveal which direction to take. Many CUs wouldn't put a stake in the ground and chart their own course. They had their budgets and ideas under lock and key. In a down economy, we can understand a conservative approach, but doing nothing puts a business in perpetual reactionary mode.

If your credit union is still navigating without a rudder, we offer seven suggestions to get you moving in a forward direction right now.

1.  Do a post-mortem on 2011. Take out the white board and write down successes and failures. In simple terms, try to understand what made each item your list fall where it did. Then, try to figure out which are worth pursuing further/again in 2012.

2.  If you haven't already, create a new member program to deepen your relationship with these people. Many of them may have joined because of the November Bank Transfer Day. They could already be disillusioned if they haven't been hearing from you. Correct this now by convincing them that your friendly staff and comprehensive services are perfect for all their financial needs. Time is running short. The first six months of membership are crucial.

3.  What's your new idea for 2012? According to Callahan & Associates, credit unions that increased their marketing budgets in the second quarter of 2011 noted substantial increases in member growth and balance sheets. U.S. credit union marketing expenses increased 3.8% to reach $483 million. This was the fifth straight quarter of annual increases. Profitability will remain a key issue for CUs in 2012. Take a look at your promotions calendar and compare it to your membership profile. What can you do to make promotions fresh and more effective?

4.  Reposition specific products and services to answer a need. Are you trying to reach people aged 22 to 35? Did you know:

• Sixty-five percent access their account information through the Internet, while 28% use a mobile application from their bank or credit union. 
• Six percent use mobile devices to remotely deposit checks. Among those using the service, 54% use it at least once a month; 39% use it weekly. 
• Sixty-four percent said that tracking account balances is the most important feature they currently use while banking online, followed by paying bills (34%), and transferring funds (28%). 
• Seventy percent wish they could see their entire financial picture, and manage all of their finances in one place, regardless of the information source. 

5.  Stop talking about Gen Y and Gen X and start talking with them. They are highly connected with social media and the Internet. Be yourself. Be authentic. Give them reasons to engage with you by providing information they can use and easy ways for them to respond.

6.  Get to know your members better this year. Do something proactive to keep them, and foster younger members into becoming your most profitable members. Invite them to quarterly events, put polls on your Facebook page, or make a commitment to collect and use membership data.

7.  Identify one bad habit you're going to kick this year. Maybe it's overcoming a resistance to using email marketing. Maybe you'll start asking your member services staff for input at the front end of a campaign so more leads are converted to sales. Perhaps you'll study the performance reports from your campaigns, and finally be able to justify the expense (or not) because you know what is working and what is not. Maybe you'll stop being reactive or passive and get out in the marketplace acting and sounding like the winner you are.

The economy is improving, and interest in credit unions has never been higher. Make the best of your marketing landscape. We'd love to hear how you plan to meet 2012 head on.

Pinpoint Direct Marketing exclusively serves the U.S. credit union market. We provide excellent, turnkey or a' la carte creative services at a great value. Click to learn more.

How to create impulse buyers

by Margie Church

With the growing emphasis on electronic marketing tools, we pay particular attention to our clients' success rates when they use emails and PURLs in their direct mail campaigns. Can a credit union get members to act like impulse buyers? We think so.

Here are three typical examples of how our clients proved our theory.

1.  We learned that a PURL, email, and letter is the perfect combination for skip-a-pay campaigns. Our clients typically see an average of 10% PURL visits and over 80% conversions. In other words, hot leads. "I want your offer, and I want it now." 

2. Using emails to promote auto loans and credit cards also proved successful. We see an average read rate of 20% on these campaigns. Including a PURL gave an additional 1% lift rate.

3. We have clients that use a PURL with their new member mailings. The PURL reduces the "I'll think about it" behavior. The recipient can directly and conveniently sign up for new services or products when they receive their monthly letter. If your credit union needs to improve the number of products-per-member ratio, adding a PURL has delivered an average 1.5% response rate.

What's the typical cost per hot lead?

Let's say you sent 2,000 emails with a PURL. At our place, an email costs a mere five cents per address and so does the PURL. Your expense is $200 for this portion of the campaign. Our average response rate on any campaign is 2% on PURLS, giving you 40 visits. The average conversion rate (PURL submissions) is 70% or 28 hot leads, costing you $7.14 each. Seems like the expense is justified, don't you think?  

Emails and PURLs take dead aim at fast delivery and responses. Sure there'll always be people who prefer to come in or call, and there's nothing wrong with that. But using email and PURLs help ensure you strike while the iron is hot, and don't leave business on the table.

Pinpoint Direct Marketing exclusively serves the U.S. credit union market. We provide excellent, turnkey or a' la carte creative services at a great value. Click to learn more.