SIOUX FALLS, S.D.-Gone are the days when a credit union could simply throw out a low loan rate and get members to pay attention. Today it takes a rock-bottom price and something extra to stand out-such as a scavenger hunt, a sweepstakes, or clever use of social media.
That's the philosophy of three credit unions that jump started their lending this year with some creativity they say is desperately needed to get results.
Sioux Empire FCU's "Black Saturday" loan sale drew $1.75 million in auto loan preapprovals by assembling a promotion that featured ingenuity and a lot of moving parts. The $75-million CU offered special rates on a Saturday on a first-come, first-served basis. The first $500,000 in preapprovals got .99% APR, the next half-million dollars 1.99%, and the final million 2.99%. The CU's standard auto loan rate was 3.65% for the best credit.
Sioux Empire spent $3,200 to advertise on TV, and hit Facebook and Twitter hard to promote a scavenger hunt that took place one week before Black Saturday. The community was invited to complete a tour of selected local businesses based on clues provided via Facebook and Twitter, and from credit union reps at the businesses themselves during the hunt. The first three consumers to complete the hunt successfully were given passes to move to the front of the line on Black Saturday the following week.
That was not a bad deal, explained CEO Jeff Jorgensen, who told Credit Union Journal that almost 100 people lined up before SEFCU opened its doors at 8 a.m. in early June. "Some people showed up at 2:45 a.m. with a warm blanket and a cup of hot chocolate. We poured coffee for those in line, some people brought their radios. It turned out to be a great, fun event that the credit union and our members enjoyed."
Creating something different, like an interesting event, said Jorgensen, is a key to lending today both short- and long-term. "This entire event got people to notice the credit union and that we have money to lend. But it also got people engaged in the credit union. That's what you need, besides competitive rates, to get people borrowing again and again. We think many of these members will think of us the next time they need a loan."
The promotion also netted Sioux Empire some free press, as two local TV stations came out on Black Saturday.
Members had to have a minimum 660 FICO score to get the special rates, and that was stipulated in advertising. Jorgensen said only one member failed to qualify. "A lot of credit scores were over 800. This made the line move fairly quickly, and we approved the loans in a speedy fashion. There were no surprises in the credit of the borrowers. People who are rate conscious are typically persons with higher credit scores."
The special ran from 8 a.m. to 11 a.m. and members were given cards that said they were preapproved but had 14 days to conclude their purchase. Refi's were accepted as well.
"Everyone knows the auto loan market is extremely competitive, that's why we took this approach," said Jorgensen. "A great rate is not enough. You have to generate excitement in the community. We used guerilla marketing, where something is not usual, hence the Black Saturday theme, a scavenger hunt, and we even ran two weeks of teaser marketing that told the community something big was coming and to watch for what's next. We'll likely do the Black Saturday sale again, but not near Christmas-it gets pretty cold here in the winter."