Reactivation and growth from unengaged members seems to be one of the hottest topics in credit union marketing circles. Why?
Many credit unions just received their annual report on member profitability. Executive teams and boards are staring at a section that lists the percentage of their members who are considered "unengaged" by the profitability model. From the clients we've talked to, the percentage is staggering-ranging between 20% and 30% of total members. To put that in perspective, if you are a 50,000 member credit union, you've got 10,000 to 15,000 of those members unengaged!
So now the bigger debate — whose fault is it that most credit unions have a significant number of unengaged members? The members' or the credit unions'?
I recently found out that a colleague had gotten his last car loan indirectly from a credit union through his car dealer because it offered the lowest rate. He took the credit union up on the offer and put $5 in an account to get the loan. After the loan was paid off, he became the typical "unengaged" member. When I asked him why he didn't do more with the CU he replied, "I heard from the credit union once or twice over the course of the four years when they sent me a paper newsletter. As far as I'm concerned, it's their job to let me know what products and services they could offer and they didn't do a very good job."
Key take-away: don't assume members know your product set as well as you do or that they all use the same communication channel.
Want To Get Engaged?
A recent article on the Bank Marketing Strategy Blog, "Collecting Behavioral Insights Increases Value of Relationship," states that best-in-class financial organizations supplement traditional new account opening with an onboarding process that includes a short survey of needs and behaviors of the new customer. While this survey can also measure customer satisfaction with the new account opening experience, most banks focus on gathering insights into the reason for opening the new account, communication channel preferred, the financial goals of the customer and what financial services the new customer holds elsewhere.
In addition, some banks ask questions to determine key life events that may be on the horizon and determine who in the household will be in charge of managing the new account. Forget whose fault it is!
If you believe the saying that "It is cheaper to get an existing member to do more with you than it is to find a new member," then marketing should be focusing heavily on the unengaged number in their reports.
As Jim Marous points out in the Bank Marketing Strategy article: "A deeper knowledge of the customer's financial goals, channel preferences, product usage, preferred channels and reason for coming to your institution is needed to personalize the onboarding communication and move the customer from product engagement to relationship entrenchment."
Think about it: an unengaged member could be viewed as a new member who may not even know about all the products and services available. The same onboarding e-mail engines and surveys used to educate new members could be turned towards unengaged members to learn more about their original reason for joining the credit union, gather current financial needs and introduce them to the benefits provided by the CU.
Technology offers a fast, inexpensive way to reach your unengaged members. Websites, social sites, text, e-mail, snail mail, etc. In today's multi-platform environment, consumers are calling the shots on how they receive news and information. And that includes promotions from your credit union.
Chances are, unengaged members don't respond to your offers because they don't know about them. To re-engage members, try using multiple channels. Better yet, ASK how they want to hear from you. A simple online or e-mail survey can provide a wealth of information about members' communication preferences.
Ron Daly is President/CEO of DigitalMailer, Inc. For info: www.digitalmailer.com or (866) 994-4900.