Zero In On Member 'Triggers' To Make More Loans

Someone forgot to tell Susan Chapman, vice president of marketing strategy for Smart Financial CU in Houston, that there is a recession going on. A sharp focus on the consumer relationship market this year generated more loan activity for Smart Financial and led to a budget increase in 2011 for her marketing department. "If I can go to our board committee and say for every dollar spent we're bringing back $10, or whatever it is, I can get an OK to spend more money," Chapman said.

Smart Financial and other credit unions around the country are making as many, if not more, profitable loans in the current economic downturn. Rather than concentrating on mass marketing or new media, they are zeroing in on consumer behavior, building robust data warehouses and looking for "triggers" to know when to strike with an offer that matches members' needs. They are providing relevant, specific, targeted loan offers, and often with less marketing investment.

The CUs doing well in the recession are focusing on marketing basics: segmentation, offer creation, consistent execution, and tracking. There are two kinds of marketing. One makes you feel a certain way; that's brand building. Social media falls in this category. Having a page on Facebook and a presence on Twitter may generate online followers and fans, but so what? How can you tell if any of them are being converted to members or if those fans are purchasing products? The impact of social media is difficult to measure, and in this economy, it's not a significant focus of successful credit unions.

Rather than creating a feeling or emotion, the other type of marketing prompts action. Top-performing credit unions are spending more time in back-to-the-basics, action-generating direct marketing. These institutions are analyzing members' behaviors and searching for instances or events that will indicate a loan need. Looking for "triggers" is a highly targeted, defined method that saves money and yields results.

Focusing In On New Members

For example, Smart Financial experienced great success by focusing in on new members in their first year with the credit union. Founded in 1934 as a teachers' credit union, Smart Financial now has 17 branches in Texas and Louisiana. In its new "on-boarding" program, Smart Financial sends a new member an offer every month for 12 months. The offers are based on psychological and demographic information to better determine who is most ready for an auto loan or personal loan. This way an older member will not get a pitch for a student loan. "The triggers are as targeted as we can get them, and we've seen great success with that," Chapman said.

Even credit unions that are seeing their marketing budgets shrink are able to market more effectively by being very focused in their promotions. Anoka Hennepin Credit Union, a mid-size institution with eight branches in the Minneapolis/St. Paul metro area, effectively used consumer relationship marketing even though its marketing dollars had been reduced. LeAnn Achtenberg, vice president of marketing, shifted the attention to current members rather than launching expensive campaigns to attract new customers. "We got smarter," Achtenberg said. "The return on investment with our current members has gone up even though our impressions are fewer and our dollars are fewer."

The Right Offer At The Right Time

By tracking members' behavior, personal data and financial activity, Anoka Hennepin sent the right offers at the right time. Someone who recently took out an auto loan would get an offer in the mail for a new credit card. The CU used to wait 36 months-the average amount of time members paid off a car loan-before sending a new pitch. But by monitoring members' behavior, the institution realized members were paying off loans sooner, so Achtenberg stepped up the timing. "We know they are looking for new cars in this time frame, so we want to tell them, don't forget about us when it's time to buy your next car," Achtenberg said. The triggers are automatically set up, saving time and money.

CUs are getting assistance from data-mining non-core systems to generate big returns. Smart Financial mines its bill-pay data and recaptures loans being paid outside the credit union. Smart responds to the trigger by sending a direct mail piece that reminds the member of its services.

CUs are making offers through multiple channels (mail, e-mail, web, phone, in-person) as a means to focus their message, get attention and increase results. Peak performers will often combine events with multiple touch points to ensure their message is getting noticed. For example, a birthday message combined with a product offer will often be presented in the mail, via an e-mail as well as on the phone. Key to this strategy is automating the workflow so two things can happen. One, marketing gets done. Two, marketing gets measured. In this economy, marketing dollars are limited, but top-performing credits unions are tracking the results of their promotions. They focus their dollars on what will bring the biggest impact to the bottom line.

Achtenberg at Anoka Hennepin was able to detect a decline in the number of new members when the CU cut back on mass mailings to find new customers. But she also saw an increase in loan activity among current members through the new, targeted marketing program. "We proved these communications are bringing in dollars and creating action," she said.

Trigger-based marketing produces action that will lead credit unions through a challenging economy. Knowing the consumer, anticipating their needs and being ready at the right time with the right offer can increase loan dollars and make the most of marketing budgets. Credit unions that actively measure as they go and passionately pursue their members are succeeding in spite of a recession.

Tony Rizzo is the general manager and creative director of MARQUIS Software Solutions, a provider of MCIF/CRM solutions, Plano, Texas. For info: www.gomarquis.com.