APPLETON, Wis.–While analytics are being touted as the best means to target members, at least three credit unions have found that creativity is not a bad second strategy.
Fox Communities CU here, for instance, capitalized on the fervor of local Green Bay Packer fans, running a sweepstakes for two tickets to one of the National Football League team’s home games. Every swipe of the card was another drawing entry. The campaign increased the $880-million CU’s number of credit cards by 67% and usage by 9.5%, while cash advances jumped five-fold.
Sales Trainer Kristin Steede said the objective was to stand out. “Packer tickets are impossible to get unless you know someone. This was a great promotion.”
At Community Financial CU in Broomfield, Colo., Chief Lending Officer Jeremy Pinard said the $130-million CU devised a unique way to battle the big card issuers’ rewards programs, which often give away more than a point for each dollar spent. CFCU determined it could afford to give away more rewards points if the CU tied the extra giveback to relationships.
Going Beyond Classifications
Community Financial had already classified members by their depth of relationships—Platinum (highest), Gold, and then Community, giving those with more products and services benefits such as lower loan rates and higher deposit rates.
“We felt we could afford to give away more card points for increased use of products and services, and to also find another way to reward those already considering the credit union their PFI,” said Pinard.
Under CFCU’s Relationship Rewards program, Platinum members receive two points per dollar spent, Gold 1.5, and Community 1. Points are redeemed through RewardsNOW, Dover, N.H. “This year our number of credit cards has grown by 50% and balances are up 70%,” said Pinard. “Since the start of the year we had 450 cards and we now have 700.”
Tim Kolk, principal with card consulting firm TRK Advisors, as well as analysts in previous reports (CU Journal, Aug. 13), believe credit union rewards programs can also take on the major issuers by having a local flavor, giving discounts or points through local businesses, as long as the program is easy to use and is not restricted to a website.
Card Tied To Charities
VacationLand FCU in Sandusky, Ohio, sees the value of a local tie-in, introducing a card that allowed members to make donations to one of two local breast cancer centers via card usage and balance transfers. Last year the $146-million CU generated $654,000 in balance transfers along with $398,000 in net portfolio growth. VFCU’s total credit card portfolio is $5.6 million.
“For every new Pink Ribbon card that was opened last year we donated $10 along with 1% of their balance transfer up to $50,” said Terry Souter, plastic card officer.
The focus on credit promotion does more than encourage members to take the CU’s card and push it top of wallet, its helps offset debit interchange losses, sources emphasized.
Fox Communities’ Steede told Credit Union Journal that the impact of the Durbin rules on the CU’s debit interchange contributed to the development of the Packer promo.
“Durbin had a lot to do with the program. We are seeing the trickle-down effect. Our debit transactions are heading up, but total debit interchange is staying the same, which means what we are getting per swipe is coming down, we think it’s about ten cents less. We have to find a way to offset that, and credit is it.”