DENTON, Texas-DATCU has set up a program to reward members who have deeper relationships with it.
"We've been very fortunate-we've got about 14.5% capital-and we wanted to begin to find ways to reward members; to begin to turn some of that profit back to them," explained Dale Kimble, CEO of the 66,000-member, $607-million credit union.
While DATCU began by offering enhanced end-of-year bonuses, it "found out that many people didn't have enhanced relationships with us, and it meant nothing to them. And though we value all of our members, the ones who seemed more appreciative were the ones who had two or three services with us."
DATCU created its Member Value Program (MVP) in 2011 to address that issue. To participate, members must have a checking account (including at least 10 transactions per month), accept e-statements, and have an aggregate loan or credit card balance of $1,000 or more, or perform at least 10 debit card transactions per month. In exchange, MVP members receive free money orders, cashier's checks, travelers' checks, two free non-DATCU ATM transactions per month, an 0.25% APY discount on loans, and more.
According to Kimble, about 11,200 of the CU's 66,000 members (17%) are MVP members. To put it another way, of about $600 million in shares, $100 million of that corresponds to MVP membership; similarly about $80 million of the CU's $500-million loan portfolio is part of the program.
Kimble noted that MVP has grown significantly over the last nine months, as has its checking base (which has gone to 400 to 500 new accounts per month from about 125). "We've opened more checking accounts than share accounts in some months," said Kimble. "We're converting people that have never really had a deep relationship with us, and that makes us feel real good."
There are no concerns about alienating or upsetting members who are less involved with DATCU, said Kimble, adding that "it's really been an educational opportunity for us. For those members who have a question or concern about it, probably on 90% of those occasions we're able to convert them to whatever additional piece they need to qualify, and that's why it's building as quickly as it is."
Kimble said that DATCU does not aggressively market the MVP program, but does promote it via e-mail blasts and in the occasional newspaper advertisement. The biggest driver, he said, is word of mouth. "It's a testimony that what we're doing is working, it's credible and it's providing a worthwhile benefit to members that they're excited about it and willing to share that information with other people."
MVP is currently growing at 10.5% per quarter, said Kimble, noting that limiting participation to a select group of members has helped control costs. He added that the increased product penetration has more than offset the costs from products/services it gives away.