Are you thinking RAP is for a different, younger generation? In the world of music, you might be right, but in the world of marketing, it's always No. 1 on the charts.
No, we're not going to fire up YouTube and show you our latest video (even though that's a very popular way to market). We're going to teach you how to do it yourself.
RAP is an acronym for Retention, Acquisition, Prospect. Yup, the same song we're always singing. Why? Because it's important and it's the best way for a credit union-or any business-to hang onto the business it has, expand its rolls and groom other members to move into its most profitable profile.
We believe that every campaign should have a RAP strategy. It's not as complicated as you might think, nor is it expensive. In fact, RAP is smart and cost-efficient. First, let's understand each segment.
"R" is for "retention." This strategy focuses on the business you already have. Some CUs make the mistake of thinking that once they've gotten a member to open a loan they're good to go forever. What quicksand thinking that is. You know loan and deposit terms end. This business can waltz right out the door if you're asleep at the proverbial marketing wheel. What's more, many of these people are part of your most profitable member profile.
Turn things around right now. Commit to communicating with loan holders at regular intervals throughout their term. Use data systems or MCIF to find them. Use variable data to add a personal note to loan statements showing their equity progress. Offer upgrades to products and services via print and e-mail to reward them for their loyalty.
"A" is for "acquisition." Your goal is to entice these members into trying a product or service they don't have with you.
Many of these members are well on their way to becoming part of your most profitable core. Perhaps they're too young to need a HELOC, or just need a nudge to open a credit card with you. Whatever the reason, these people represent new growth with a twist - they're already predisposed to the CU philosophy. It's easier and less costly to sell to them than a non-member. So don't wait for them to come to you!
Segment your data and adjust images and copy to create a personal, relevant message. Direct mail is a very cost- and time-efficient way to deliver your campaign because you can use all kinds of variables to appeal to their lifestyle and life stage. If they have young families, start sending financial education information to help their youngsters start off on the right foot-with you! Make it super easy to contact you for more information, accept your offer, or get started. Online applications, PURLS and e-mail follow-ups are great ways to make this happen.
"P" is for "prospect." Prospects are moving targets. You don't know what's on their mind or what their current need is, so frequency and reach are crucial. This is the hardest, most costly segment to target, but that doesn't mean you should dismiss prospecting out of hand. You also shouldn't use it as your primary marketing strategy.
Like retention and acquisition, prospecting has a role. Contests, prizes and special incentives are especially popular components of prospecting campaigns. There are two components to this group: members who are unprofitable or inactive, and non-members who don't know you.
On the membership side, a hard decision must be made about whether to close the unprofitable accounts. Inactive members still need to hear from you. Use MCIF or data systems information to find the accounts you want to retain. Encourage greater participation by making a solid offer and encourage them to try related services that would save them time and money.
A letter or postcard is a simple, inexpensive way to start. Branch code the direct mail and include the name of a person the member should talk to. Make it easy to say yes by including a PURL, too. Use social media, the credit union newsletter, in-branch signage and your website to amplify the offer message.
For those who don't know about your credit union, mass market offers must be compelling. Know what your competition is doing so you stand out, not blend in. Everyone has e-statements, but do you have a twist, such as cash rebates for using them instead of paper statements? Is there a compelling rate promotion or additional discount for new members? Segment a purchased mailing list geographically and, perhaps, by age and marital status. Use inexpensive, but personalized postcards and e-mail to these non-members. To expand your reach, a mix of web banners, branch signage, billboards and local ads are worth considering.
Now that you understand the lyrics, let's turn RAP into music. Here's a credit card promotion illustrating how these strategies work together in the same campaign.
Offer: credit card. Fixed 9% APR on purchases, cash and balance transfers.
Benefits: Save money, predictable payments, responsible credit management, easy.
Overall campaign strategy: segment member data by those who have the CU's card and those who don't. Purchase a mailing list for non-members. Further segment the data by age groups. Copy and images are adjusted to appeal to those segments.
Retention strategy: These members already have your credit card, so they know about and appreciate the lower, fixed rate. Send a personalized letter thanking them for their business and reminding them there's no fee for balance transfers from a higher-rate credit card or for cash advances. If there's a premium version of the card, invite them to move up. Use a PURL to initiate a balance transfer or accept the premium credit card. Follow up with an e-mail reminder.
Acquisition strategy: These members don't have your credit card. These days, people don't want a sales pitch, they want a solution. The rate and a balance transfer are most compelling. Build a case that this credit card will help them save money and manage their credit responsibly. Use credit scoring to send a highly personalized, pre-qualified or pre-approved offer.
Consumers will make a split-second decision on offers such as these. Use a PURL to snap up acceptances. Follow up a week later with an email and/or another letter to those who haven't yet replied.
Not That Complicated
Prospecting strategy: Make a blanket offer to open a credit card. Pull MCIF data for addresses within 2.5 miles of the branches, and send an inexpensive, personalized postcard with the same strong savings message. Create a web banner. Display the rate on branch signage. Consider strategically positioned billboards and local newspaper ads if the rate is competitive.
Within the membership, promote the offer in your newsletter, as a statement stuffer, in social media, create a blog that illustrates how to manage credit card debt and use your card as a good example.
As you can see, RAP isn't as complicated as it sounds. Plus, using data helps target the message in each segment. You'll likely mail far fewer pieces that'll land in the trash. That means your ROI will increase. We bet you're going to be a lifetime RAP fan now, too.
John Blom and Margie Church are with Pinpoint Direct Marketing , Andover, Minn. For info: www.PDMKT.com.