BIRMINGHAM, Ala.-Alabama Telco CU here has seen significant increases in product sales and membership applications following the launch of a "Rate Your Rates Challenge."

The promotion offers to show potential members how they could save money at their local CU. Modeled after the old Pepsi Challenge, Rate Your Rates allows consumers to choose which rate is more appealing on a number of different financial products. After consumers select their preferred rate, the lower rate is revealed as being offered by Alabama Telco, while the higher rate is one offered by Regions Bank, one of the CU's largest competitors in the area. The credit union serves more than 51,000 members with $547 million in assets.

Stanton Davis, VP of marketing at the community CU, said that this method is much more "subtle" than forcing the lower-rates message "down a listener's throat, and it lets them choose which one is best for them."

The challenge is being brought to community events throughout the area, with Davis explaining that Alabama Telco is seeking to make it more about education and communication than a direct sale.

"We find that if you're at community events and you're trying to do a direct sale and push information down their throats, there's going to be some resistance there-particularly at events where they're really not looking to buy a loan or purchase a CD, like at a farmers' market. …They're out there to buy vegetables, not critique products at a bank or credit union, so we try to make it simple."

Strong Consumer Response

Davis said consumers in the area have responded positively, and that ATCU has seen a measurable increase in membership. With the exception of December, the credit union has received steady increases in online applications each month a television commercial featuring the challenge has aired.

When the commercial launched in Birmingham, 30 online apps were received in a month, volume that increased to 72 during a subsequent month (following a heavier buy-in in four markets). Successive months saw volume soar to 136, 210 and 188 respective applications until the spot finally quit airing. Even with the ad no longer running, Alabama Telco received 158 online applications in May.

Rate Your Rates is not tied to any kind of rate or promotion. Rather, it is meant to be strictly a branding campaign and a way to raise the CU's profile in the community.

"In our markets, most people are banking at a bank and that's what they feel like they can be a part of," said Davis. "And without talking about where you live, work or worship, when we just say 'Which one would you prefer out of these rates?' and say this is available to you, and we get rid of all of those barriers about what is a credit union [and what are the eligibility requirements]...from there we've already started a conversation."

After receiving positive reactions to the challenge, Alabama Telco filmed consumers' enthusiastic responses for a commercial. The challenge and the commercial have been so successful, said Stanton, that it's almost becoming harder to get people to take the challenge.

"We knew it was really working when we'd go to a community event and as we were asking people to come over to our booth, they'd just wave and say 'We already know the answer!'" said Stanton. "That was awesome. It was a breakthrough-it meant they'd retained it."

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