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.

A Forgotten Practice: Data Segmentation

By John Blom and Margie Church

Data segmentation in marketing is a practice you may have forgotten about, but it's one we recommend for every campaign. By appealing to members' needs at various life stages or situations, you're making your message more personal and relevant. A more refined message will have a positive, stronger impact on your campaign. 

We always recommend using the credit union's data or MCIF to create a retention, acquisition, and prospecting strategy for every campaign. Using auto loans as an example, here's how to do it.

First, reach out to the people who have auto loans with you now (or recently so) to retain their business. You can't assume that once a member has opened a loan with you, they'll come back for more without any incentive. Their loan can be at risk the moment the balance due is lower than their vehicle's equity. Remember auto purchases are usually emotional decisions. Be clear about all the financial and time-saving benefits of financing their next vehicle with the credit union. A pre-qualified offer, additional rate discount, or other incentive should be considered.

For an acquisition strategy, modify the message slightly to reach members who have an auto loan with another financial institution. Maybe a cash-saving refinance offer will help you acquire the business of these members. Make payment examples, rates, and terms front and center to show how much money could be saved by financing at your credit union.

A broad-sweeping, prospecting message is the third important tactic to take. Sadly, this is often the only marketing strategy many credit unions have for all the segments. Prospecting typically promotes a single product. With good frequency, they also familiarize the community with your existence and the benefits of membership, but prospecting does little to protect the business the credit union already has. Put rates, terms, and payment examples front and center to make it easy for people to compare their current payment and/or their budget with your offer. You'll write some new loans because your offer reached some people at the right time and place, but waste a lot of money on those who are in no position to buy or aren't interested. That's why prospecting shouldn't be your primary strategy. 

You might be thinking you can't afford to create a custom campaign using segmentation. You don't need to have a do-over for each version to accomplish this. In fact, you might send out fewer pieces, but your  overall results will be better because you strategically positioned your message. Switch out the graphics, headline, and a sentence or two and you're done. Not very costly at all. 

Here's something else to think about. Pre-approval auto loan offers are a really hot item right now, but credit scoring is costly and time-consuming. Think about shifting the expense of credit scoring to repeating the campaign two or three times for greater exposure. If you've segmented your data, you'll benefit from a targeted message and increased frequency, perhaps more so than a one-time pre-approval.

The true value of segmentation is often in the eye of the beholder. Make sure your members are seeing your credit union clearly.

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.

Use Credit Reports to Score?

By John Blom and Margie Church

What if you started using credit report inquiries to reach members and prospects who are on the hunt for new loans and refis outside your financial institution? Tapping into credit inquiries for auto loans and mortgages (first and second) could have a pretty good payoff. Consumers are still spending conservatively, so anything your credit union can do to help them save cash is potentially worth the effort.

What about the expense of doing this? 

There's the potential sticking point.  

There are two costs to consider: lead acquisition and fulfillment. Ask your service provider for some historical information about the kinds of data you're seeking. The lead volume may be quite low, but if you're confident about the quality, that could diminish or negate the acquisition cost concern. 

Managing a program such as this in-house, requires a real commitment. Leads must be checked and pursued every day. Many credit unions don't have a large staff, and for that reason, using a direct marketing firm for fulfillment probably makes more sense. They have the systems set up to handle projects like these automatically.

What's the right response?

This is a 100-percent prospecting activity, so keep your costs low, and make wise choices. Using cross-channel marketing helps to maximize your success. Start with tried-and-true direct mail. Timing is everything, so send a postcard, via first class mail, to any prospect.   

Do you have the member's email address? Use it for a fast and very cost-efficient way to reach them.  Is the member using mobile banking? Send an alert or text message! A combination of these tactics lets your credit union strike while the iron is hot.

As the economy's knees stop knocking, other opportunities are knocking. Mining credit inquiries could open a new door.

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.

Bill Pay a Data Goldmine?

By John Blom and Margie Church

The information you have about members using Bill Pay services, is potentially a marketing goldmine. You've had access to the data for years, but likely it's been costly and cumbersome to access. You may have been reluctant to make the time and financial investments until your credit union could gauge how successful Bill Pay would be among your members.  

Nationwide, Bill Pay's adoption is strong. Is it time to have a conversation with your service provider about whether you can cost-efficiently use that data to increase your loan portfolios and membership roll? We think so, especially since portions of the economy seem to be stabilizing, and some loan products are seeing good uptick.

Short-term, you might compare the cost of quality leads against your budget. Perhaps you'd choose a few seasonal promotions versus a full-blown commitment. Long-term, we contend that if the data gives you a high level of confidence you'd reach a ripe-for-the-picking audience, and the cost to get the leads is reasonable, pursing this is something you should seriously consider. It could be a very lucrative component of your credit union's retention and prospecting strategies. 

Once you have insight to a member's financial habits and obligations via Bill Pay, you can show them time and money-saving products and services they might want. The not-for-profit charter of credit unions puts you in a position to do this without appearing as the money-grabbing, for-profit bank that has had their hands in the members' pockets far too deep, far too long.

A secondary benefit, is that you'll ride the leading edge of creating a new membership profile: your most active eBankers. As the financial industry continues evolving into virtual banking, you'll be in a position of strength to have products and tools your members want at the time and place they want them. That's just smart marketing.

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.

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.