Where do you go from here, Credit Unions?

By Margie Church

Unless you've been stranded on a desert island without connectivity to America for the past six weeks, you know all about November 5. A grassroots movement that credit unions were slow to embrace, Bank Transfer Day took off without them, leaving some racing to ride the wave of free publicity it created. 

In case you missed these eye-opening results:

• Approximately 650,000 people have joined credit unions since September 29. This equates to more new members in October than in all of 2010.

• Credit unions realized approximately $4.5 billion in new deposits through October.

• 40,000 new memberships were opened on November 5, and

• Credit unions saw $80 million in new share accounts,¹ and

• Credit unions originated $90 million in new loans.¹

We may never discern what portion of this growth was motivated by Bank Transfer Day versus consumer anger about new fees and big bank arrogance. What matters is that Americans reacted, and credit unions were the big benefactors.

History has proven that Americans are fond of grassroots movements. And Bank of America likely smelled a grass fire when it cancelled its plans to institute the debit card user fee. But we all know big banks aren't going to go quietly into the sunset, licking their wounds, having finally learned not to mess with the Average Joe. They, and other banks, will find ways to increase existing fees and introduce new ways to get what they're always after – bigger profits for themselves.

Credit unions are sure to see an uptick in new business as long as this topic is kept in front of consumers. What can you do? Pick the low-lying fruit. Deepen your relationship with members by contacting them with another relevant and timely message now. 

Free checking is only one way credit unions save their members money every month. At this time of year, everyone seems to be cash-strapped. Boost your members' budgets by offering your lower-interest rate credit card. Tantalize them with savings examples when they transfer higher-rate balances. To those members who already have one of your credit cards, offer a great rate on a personal loan to help pay off holiday expenses or plan a winter get-away.

As we close out 2011, and look forward to next year, we have one piece of advice: full steam ahead.

1-      http://money.cnn.com/2011/11/08/pf/credit_union_switch/?source=cnn_bin

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.

No fee? Still flee?

by Margie Church

Bank of America's decision to drop its proposed debit card user fee has me wondering how credit unions will respond. The tremendous amount of negative national press has given Bank of America a black eye, yet it's given credit unions invaluable positive press. For free.  Some credit unions rushed to the unique opportunities presented by the user fee boondoggle and the Bank Transfer Day. They're communicating with members and rattling the chains of banks in their communities. 

Is your credit union going to take its "ball" and go home now, feeling the game is over? Or will you keep the pressure on to deepen relationships with your members and increase rolls because you're a better alternative?

The economy is slowly stabilizing. Consumers are cautiously spending, but they are spending. A new Bloomberg report stated this year, debit card spending in the U.S. increased 23 percent to $97 billion, and worldwide, debit card spending increased 35 percent to $62 billion. Credit card spending worldwide rose 21 percent to $469 billion from $389 billion a year earlier.* Holiday promotions are everywhere. Auto manufacturers are offering fantastic incentives to clear out 2011 inventories and they're promoting their luxury new models. Interest rates are rock-bottom low on auto loans. Many of you are promoting amazing new HELOC programs. These are all perfect ways to bring your relevant, timely, and personal messages to members and prospects alike.  Email is an inexpensive, fast way to be in touch even at year-end when budgets are spent or nearly so.

Some credit union officials have been fretting that those leaving big banks might be unprofitable members. Perhaps credit unions shouldn't be too quick to embrace them. Huh? If these people really were unprofitable, Bank of America, and others like them, would have found a different, quieter way to get rid of them long before now.** And we don't perceive these banks as the good guys just because they decided not to stick it to their clients. They just cried "uncle." Their greed will drive them to find another, less public, way to get the cash sooner or later.

Keep the heat on. Be the financial hero your community needs.

*http://www.bloomberg.com/news/2011-11-02/mastercard-profit-climbs-38-as-card-spending-increases.html?cmpid=bit 

**http://thefinancialbrand.com/20268/thinking-bofa-debit-fee-refugees-are-unprofitable-is-a-mistake/

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.

Email Marketing Effective, Inexpensive

By Margie Church

Has your credit union abandoned or embraced email marketing? Since 2007, the number of retail email messages has grown 61%; it achieved a 16% increase in 2010 alone. The economics of email marketing in a down economy could certainly be part of the reason for the jump. The advent of smartphones and electronic tablets also could be contributors.

A July 2011, MailerMailer survey revealed that open rates have increased in banking and marketing, while all the other surveyed industries declined. Open rates have climbed each year to a 12.8% open rate in these two industries, too. Banking also had a 2.9% overall click rate, some of the highest in the industries surveyed. Plus, banking emails sent to 25-499 recipients, for example, had the highest click rate of 14.8%.*

That last sentence is critically important.

We believe that using data modeling to target your message is an important key to a campaign's success. Data modeling helps ensure the recipient is highly qualified and/or highly likely to respond the way you want. By using MCIF or Data Systems information, you may end up sending fewer pieces than you expected, but if the recipients are the most qualified to accept/act on your offer, isn't that more worthwhile? 

Use electronic marketing tools

Some credit unions say their members don't like email marketing, or electronic response tools such as PURLs and QR codes. We believe there will always be a portion of your membership that prefers print. It's one reason why we subscribe to a cross-channel marketing philosophy.   

But we believe totally dismissing electronic marketing is a mistake.

Revealing statistics

If members truly don't prefer electronic communications, then why is mobile banking gaining such momentum and acceptance?  In 2010, approximately 17.8 million customers used mobile banking, according to data from TowerGroup, a financial services research firm. That figure is expected to jump to 27.4 million customers in 2011. By 2013, it's predicted that 53.1 million consumers will adopt mobile banking. 

Electronic communication isn't coming. It's here and growing FAST.

•        91% of the U.S. population uses a mobile device. (CTIA, 2010)

•        420 million smartphones are expected to sell in 2011. That's 28% of the mobile handset market. The figure is predicted to rise to over 1 billion in 2016, comprising half the market. (IMS Research, 2011)

•        23% of the U.S. population uses a smartphone. (Frank N. Magid Associates, 2010).

•        97% of U.S. households use email. (e-Dialog, 2010)

•        82% of smartphone users check and send email with their device. (Google, April 2011)

•        Mobile's share of all opened email was 16% in March 2011, an 81% rise from October 2010. (Return Path, March 2011)

Email Campaigns: Inexpensive, Excellent Reporting

By the time you've paid for your print collateral creative, the cost to convert a piece to email can literally be pennies per address. That's right. Pennies. One auto loan can easily cover the costs of the email campaign. 

Hot and warm leads are so easy to capture with email campaigns. You'll have the email address of those who opened, clicked through the message, and you'll even know how many times they read. Choose a reporting system that manages unsubscribers for you, too. When email is combined with a PURL for responses, you're able to efficiently capture a lot of information about your membership's behavior. Over time, using email marketing repeatedly provides you a profile of your most receptive email users. There's a valuable marketing tool your credit union can use.

Gen X and Y are using their smartphones and tablets for email, banking, and so much more. Aren't these people the future of your credit union? Consumers are looking for better alternatives to big bank greed. We know that budgets are slim by this time of year. Email is an effective tactic you can use right now to keep your message in front of members.

*MailerMailer http://www.mailermailer.com/resources/metrics/2011/open-rates.rwp

 

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.

Be Proactive with Checking Opportunities

By Margie Church

The debit card user fee proposed by several of the large banks has pushed Joe Public to take action. Angry consumers are leaving them in large numbers. Last December, The Financial Brand wrote an excellent article about the importance of free checking to the typical consumer. One valuable nugget: 57-percent of the checking account customers in America are highly at risk to switch banks if their institution began to charge fees for what were previously free services for their checking accounts.¹ 


In response to aggressive fees, a social uprising called Bank Transfer Day has emerged. The social movement started on Facebook, and encourages bank customers to take their cash out of big banks by November 5, and put it in smaller banks and credit unions instead.² Whether this movement will be successful won't be known until after November 5, but grassroots movements have been successful many times before.

 

Is your credit union waiting for these people to walk through your doors, or are you going after them? 

Whether your competition is tacking on a specific new debit card user fee or eliminating free checking, the fact is, credit unions are a better value. They always have been.  

A checking account is the perfect product to draw new members to your credit union and deepen your relationship with current members who don't have a checking account with you. You're providing a better solution at a time when people are looking for one.

Even if your marketing budgets may be nearly spent, there are several very inexpensive, effective tools you can use to capture new members and their business right now. Here are a few great strategies and tactics to reach out to members and prospects.

1. First, use MCIF or DP data to identify members who don’t have a checking account.  Send them a postcard or letter that states the benefits of your account. Keep your message positive and explain how your credit union will make their transition pain-free. 
2. An email with a PURL for responses is a great twist for follow-up or for members preferring email communications.
3. Canvas your entire membership with a statement stuffer and possibly offer a referral reward.
4. A web banner is a must to communicate to prospects.
5. Experience the effectiveness of multi-channel marketing. Use in-branch posters, scrolling signs, drive-thru banners, and building signs. 
6. Consider a billboard in high-traffic areas.

This is absolutely the wrong time for credit unions to take a low profile approach. Consumers are shopping for value. Make sure they know your credit union is the best place to get it.

What's going on in your area of the country? Are you experiencing any backlash - positive or negative from the new debit card user fee issue?

1-The Financial Brand, 12/16/10. http://thefinancialbrand.com/16108/datahead-switching-credit-cards-social-media-channels-more/

2-Yahoo Finance, 10/13/11. http://finance.yahoo.com/banking-budgeting/article/113658/bank-transfer-day-mainstreet?mod=bb-budgeting

About us: Pinpoint exclusively serves the credit union market. We provide excellent, turnkey or a' la carte creative services at a great value.

Why Would You Skip a Skip?

By Margie Church

Traditionally timed for the holiday season and summer vacations, credit union members find skip-a-pay promotions as irresistible as fresh popcorn. They provide a service that members want and generate income for the credit union. In other words, skip-a-pay promotions are gimmies.

You don't have to do anything extraordinary to have a successful campaign. Our clients who send a simple letter have seen 137% ROI. Those who use more than one channel – either a letter with a PURL or email with a PURL—see significantly higher returns. In fact, one client saw an ROI of over 1,500%. While that number is atypical, many clients see 300% or more ROI.  As you can see, the fee income is usually more than enough to pay for the promotion (at least at our place), and the interest income is an added bonus. Some clients have experienced such success with skip-a-pays that they promote them as part of the initial loan offer. There's a win-win for everyone involved.

Skip promotion also give you a relevant, timely reason to contact your members. They boost your visibility at a time when home and auto loans are scarce, and credit card use has declined. Do you know the formula for creating top of mind awareness? Contact the same person three times in seven nights sleep to remember your message. To have long term recall, you also need to have that contact on a regular basis. Long-term recall is critical to building brand awareness. Remember, when need meets awareness, you get a sale. 

Even if your budget has been spent or nearly so, resist the urge to cut a promotion that's a sure thing. If you've never tried a skip-a-pay, isn't it time to add this effective tool to your marketing plan? 

When you think about it, not having an annual or semi-annual skip-a-pay promotion actually costs your credit union money in terms of lost income.

6 Ways to Bring in Black Friday Gold

By Margie Church

Tie your next promotion to a current event to increase your credit union's year-end sales goals, membership, and visibility in the communities you serve.  I'm sure you've tried the following promotions before, but what if you remodeled one especially for Black Friday or Cyber Monday? Depending on your promotion, you could start a few days prior to Thanksgiving and extend the offer until Christmas.

Put a new spin on one of these timely promos.

1. Auto loans are very hot right now. Offer a very competitive rate. Capitalize on any manufacturer incentives available for new car loans. Consider offering discounted GAP insurance, holding a grand prize drawing for a substantial gift card, making their first month's payment (including the interest), 90-days-no pay to get through the holidays, or some combination of these.
2. Skip-a-Pay, personal loan, and credit card promotions. Help shoppers feel better about managing holiday expenses by offering a skip promo. These are incredibly popular. Offer a special, lower interest rate on personal loans. Reward new credit card accounts with a cash incentive to transfer higher interest balances and save. Provide payment/savings examples for instant appeal on any loan products.  
3. Increase the dividend rate on a CD or other investment product. Have a gift tree or prize box members can select from when they take advantage of your offer.
4. Using QR codes, hold a website scavenger hunt to get members to try electronic banking services.  Make sure landing pages are formatted for mobile viewing.
5. Hold a Help Our Neighbors project. Invite community members to drop off an item or cash for the local food shelf or other charitable organization your credit union supports. Provide materials to write holiday cards to deployed soldiers. Hold an adopt-a-family promo to help ease holiday/winter anxiety for a deserving family.
6. Hold a membership drive at the branches and online. Treat new members right by waiving or matching the membership fee and deposit the money into the new member's share account. Provide refreshments and plenty of enthusiasm to whoever comes by. Let children decorate ornaments or cookies while your staff talks to the adults.

Cross-channel marketing: a must-do

A combination of electronic marketing tools with print is the best way to get your brand and your offer in front of busy people. We recommend this strategy all year long, for every campaign. Shoppers especially look for holiday bargains on Black Friday, Cyber Monday, and during Christmas week. Online sales sometimes eclipse onsite sales on Black Friday. In a September 15, 2011 article, Google predicts 15% of Black Friday searches will to be made using mobile devices (smartphones and electronic tablets). The bottom line is you can't ignore the preferred method of shopping and information-gathering for Gen X and Y: it's electronic. Whether your campaign runs for a few hours or longer, we can help you can turn Black Friday into gold.

Start your promotion with a personalized postcard, statement stuffer or letter. Include a QR code for mobile device users to respond. Follow up with an email. Use PURLs/GURLS to capture responses fast. (Did you know that when a person clicks on the PURL/GURL, their information is captured and you have a lead, even if they don't submit their information?) Landing pages must be formatted for mobile viewing. Many website and blog hosts provide this service already and with a click of a button, everything is reformatted for you.

At the branch, use banners, posters, counter cards, fliers, and buttons to grab attention from members and prospects. Use website banners to alert online bankers to your promotion.

Do you have a great campaign success story or an epic failure to share? We'd love to hear from you.

That New Car Smell

By Margie Church

The fourth quarter always has that new car smell to it. Auto manufacturers ramp up their holiday advertising schedules for luxury cars and then set their sites on Super Bowl mania. Last January, a record number of auto manufacturers spent record amounts of advertising dollars on the "game of the year." They included social media for a brilliant cross-channel mix that reached buyers of all ages and affluence.

Manufacturers are demonstrating their confidence in bold strokes. American automakers and foreign-based firms in the U.S. are putting billions of dollars into building and refurbishing plants. Ninety-thousand auto manufacturing jobs have been added in the past two years. Dealers are making more money per sale this year than they have in years.*

The holidays and the Super Bowl are going to arrive. Auto manufacturers are cuing up their ad schedules and offering incentives to clear out 2011 models to make room for 2012 beauties. Some are offering 90 days no pay options that'll take buyers through the holidays' financial stresses. TrueCar.com estimates incentives will rise 5% through year-end.

But low interest rates and manufacturer incentives aren't going to be the only hooks to get fence-sitters into your credit union.

Try a packaged offer using:

1. Appended MCIF or DP information with other sources, such as NADA data, to target the offer.
   
   We always recommend using data to make offers personal, relevant and timely. Consider reaching out to a slightly younger buyer, aged 25 through 45. These people are in their prime earning years, and new vehicles are necessary for their growing family. They want good value. A pre-approved offer will have better impact when combined with a payment example, but pre-approved or pre-qualified offers don't hold the same appeal they did when the economy was stronger.
   
   People older than this group are more inclined to resist adding new debt. Their earning years are waning, and the economy makes them consider whether the new vehicle is a necessity or a luxury. Since they are more interested in reducing their debt, target them with refinancing offers first.
2. A very competitive rate with flexible terms.
   
   The reality is that at any given time, a person could buy a car. They've been putting it off for any number of reasons, and today is that day. According to BankRate.com, average loan rates nationally are under 5% for new or used vehicles. Many credit unions are offering rates under 3%. A great rate for new, used, or refinanced from another lender, combined with excellent service will get their attention.
3. Offer additional discounts for automatic payments or another time/money-saving service your credit union offers.
4. Use branch-coding. The younger portion of this group may be buying a vehicle on their own for the first time. Reduce their anxiety by providing a name and contact information at the credit union. 

 What else can you do to bring loans in? 

   1.  Provide information they can use. Put it online. Remember this  generation is Web-savvy and uses mobile devices - smartphones and electronic tablets - with ease.

• Online application
• Electronic and mobile banking services
• Highlight the benefits of pre-approval before shopping
• Provide payment calculators
• Describe the benefits of GAP insurance
• If the credit union has a free car-buying service, promote that. These people are busy and if they can get a good deal in a stress-free way, that's appealing.
• Explain and promote CUDL financing if you have it.
• Provide information on refinancing benefits and savings.

2.       Offer a free car-buying seminar.

3.       Offer bi-weekly payments and show how much finance charges they could save.

4.       Offer 90-days no payment.

5.       Offer a prize or contest. Gas prices are still very high. If you decide to offer a gas gift card, it needs to be substantial and perhaps have only one winner. Consider a drawing for a payment holiday – the credit union makes the entire first payment.

We hope some of these ideas help you achieve your auto loan goals for Q4 and Q1.  

*Star Tribune, August 30, 2011.