By Tony Rizzo
If you are looking for high performance marketing ideas, look no further. Here are four case studies that have increased volume and member participation in just 100 days. All of these examples are real. All of the results are based on analysis and tracking from an MCIF system.
How much can you save each month?
This $1-billion credit union was looking to recapture loans financed outside the institution. While the concept of loan recapture is not new, the strategy was. Each member’s credit report was analyzed across each consumer loan category. This included looking at current rates, terms and payments versus what the credit union could do for the member. This allowed the credit union to focus on those who could reduce their monthly payments on at least two or more consumer loans.
Using variable data printing, the savings was clearly presented to the member along with a clear call to action. To further demonstrate knowledge of the member, lifestage codes were used to vary the photography of the piece. Taking this additional step increases results because the member psychologically identifies with your message to a greater level. To complement the direct mail effort, follow up phone calls from an internal outbound call team were also used. This is an excellent way to leverage your direct mail message and open the door for a meaningful conversation with the member. While the outbound call function is often overlooked, we have found it to increase overall response rate by several percentage points each time it is used.
The results of the campaign yielded eight dollars in profit for every one dollar invested in marketing. From the members’ perspective, it gave them another reason to believe in the money saving message this client reinforces in all of its marketing and sales materials.
This piece was a classic loan recapture with a twist. It presented savings opportunities across multiple loans.
State the case, make the sale!
This educational based credit union with over 100,000 members faces a not-so-unique marketing challenge–reactivating single service members. We know from our analysis of over 35 million households the risk of a member leaving dramatically declines with the more products they have. In fact, single account households have a 50% chance of leaving you in the next 12 months. Households with four or more products carry just a 5 percent risk of attrition. Clearly (and intuitively) the more you sell, the better the relationship.
A model was built that analyzed member demographics and psychographics, and compared profitable households to this group in order to predict what should be sold in the household. This is a critical step in order to maximize campaign response rate and minimize investment. Historically, this group is hard to motivate; therefore, be cautious with your marketing dollars or you’ll end up overspending for little results.
Before any marketing materials were sent, this credit union also assembled a series of compelling offers to get the member’s attention. Once the target market and message were established, a series of postcards were sent showcasing the product benefits.
The homework has paid off. For every one dollar spent on marketing, $1.21 in profit has been returned to the credit union. While this make not seem spectacular, it’s important to note the campaign returned a profit, reactivated single product households and decreased attrition.
A series of postcards were sent to this educational credit union FOM to increase participation and decrease attrition.
All aboard the credit union train!
Eighty percent of cross-selling occurs within the first 120 days of the new member relationship. If you are not systematically cross selling your new members, you are missing a significant opportunity to increase lifetime value and decrease attrition. At a minimum, you should reach out to the new member with a piece of direct mail and a phone call from an officer welcoming them to your institution. More detailed programs include a series of letters, emails and phone calls designed to be deployed over a six month period.
We see onboarding programs consistently pay for themselves. This $1 billion credit union has consistently generated $1.86 in profit for every one dollar spent on the onboarding program. The program has a number of product and life stage versions all designed to sell the next most likely product over the first 100 days of membership. Note the use of a non-window envelope in figure 3. We have found the elimination of window envelopes for this type of program increase response rates since the message appears more personal and less like “junk mail.”
An effective onboarding program increases lifetime value. Note the use of a non-window envelope to increase the feeling of personalization.
Looking for additional income?
Long a staple of most marketing plans, the skip a payment program provides your credit union with additional revenue and the member with some extra cash when they need it. Typically, these programs run during the holidays and summer months. What makes skip programs ultra successful is giving the member several ways to skip their payment. For this campaign (see figure 4), a member could skip via phone, personal web site or via business reply mail. Most responses were seen through the personal web site. Another item to consider is keeping your communication clean and simple. Ask for only what you need and use variable data printing and programming to have forms pre-completed for the member. The easier you make it, the better the response. Also, deploy the skip message in as many marketing channels as possible. Consider direct mail, email, newsletter, inserts and point of sale to effectively spread the word about your campaign.
This $500-million credit union generated significant results. For every $1 spent on marketing, $16 in profit was returned to the bottom line.
Generate significant fee income and give the member a break from monthly payments at key points in the year with a skip-a-payment program.
Stay tuned to this column over the coming months for additional ideas on how you can increase profit, lifetime value and member participation.
Tony Rizzo is the general manager and creative director of MARQUIS Software Solutions. MARQUIS is the largest provider of MCIF/CRM solutions to credit unions world-wide, with a long-standing reputation for excellence.