Credit unions are finding new and exciting ways to keep the cooperative buzz alive one year out from 2011’s Bank Transfer Day. They’re offering better products and services than what most consumers expect and what many for-profit institutions choose to provide.
Membership across the industry is up 2.7% annually in 3Q 2012, according to Callahan & Associates’ Peer-to-Peer Software. There are multitudes of ways credit unions are attracting members, but it’s the free and value-added options that continue to pull in fee-weary consumers.
Year-over-year, the average non-interest income earned per member was up roughly $15. Still, credit unions aren’t necessarily turning to fees to achieve this extra income. Fee income per member increased only $2 over the same period, indicating many credit unions are using alternative strategies such as debit awareness campaigns to boost interchange and gain wallet share.
Let The Games Begin
Gamification is a buzz word in mobile and online interactions, but it is also a proven strategy for credit unions that want to influence real world behavior like debit purchases.
Belvoir Federal Credit Union ($293.6M, Woodbridge, VA) dramatically enhanced debit usage by entering members in raffles for prizes like an iPod or gift cards every time they used their debit card. Every swipe entered them into the drawing and there were no limits on the number of entries. Belvoir boosted debit cards with at least one transaction by 3%, total transactions by 7%, and signature transactions by 10%.
Little Rewards. Big Impact.
With its fall “It Pays To Switch” campaign, Freedom Credit Union ($586.3M, Warminster, PA) didn’t just refuse to charge members for services such as checking accounts, it actually paid members to use them. For up to one year, members earn $5 for every month they use their Freedom debit card.
Other credit unions also have had success with similar strategies. At the beginning of 2012, First Community Federal Credit Union ($681M, Parchment, MI) brought together gamification and cash incentives by paying members up to $5 a month based on aggregate debit purchases and offering 12 weekly prizes of $500 to top users — with a grand prize of $5,000 based on aggregate activity for the full three months of the campaign. The campaign resulted in an 11% bump in debit purchases and 9.2% growth in new accounts versus the same month’s levels the year before.
Make It About More Than The Institution
Since 2011, Texas Trust Credit Union ($753.8M, Mansfield, TX) has paired up with four regional school districts on a debit campaign that gives individual schools 15 cents every time a member uses a cobranded card to make a purchase.
To date, the program has generated more than $138,000 while creating an incentive for members to use the credit union’s debit product. Other operating income, which includes credit and debit interchange as well as mortgage sales to the GSEs or unconsolidated CUSO income, is up more than $385,000 at the credit union from 3Q 2011, and membership growth has gone from -4.33% to 9.92% over the same period.
Make It Personal
Ask incoming members about their experiences with their previous institution, and you might get responses that vary from mildly negative to a profanity-laced tirade. So why not give consumers a chance to vent some of that stress and make a financial change all in one fell swoop?
San Diego County Credit Union ($5.8B, San Diego, CA) did just that with “Shred Your Big Bank Debit Card Day.” Timed to coincide with Bank Transfer Day, the monthlong campaign gave consumers the chance to win $1,000 just by opening a new account with SDCCU and getting their picture taken as they shredded their old bank card. The credit union drew in members at a rate 235% higher than normal for that month. It opened 4,049 new accounts — which is 65% higher than its average rate — and secured extra social media buzz, including a 25% increase in Facebook likes.
Given the right messaging and support, there’s no reason a campaign like this wouldn’t work for credit unions at any time of the year.