How Rogue Credit Union Posted 12.6% Growth In Its Credit Card Portfolio

Merchant discounts helped this Oregon credit union turn its cards into a must-have shopping accessory for state consumers.

 
 

According to the 2014 BrightLocal SMB Internet Marketing Survey, creating awareness on a limited budget is one of the biggest challenges small to medium-sized businesses face. In fact, 83% of the survey’s respondents said they spent $1,000 or less on marketing per month.

Statistics like these are one of the reasons Rogue Credit Union ($914.0M, Medford, OR) started its Buy Local program, a network of area merchants that offer discounts to Rogue members whenever they use a credit union credit or debit card.

Rogue’s efforts have made its cards more top of wallet and have driven cost-effective cross-promotion for small businesses in two critical areas: online promotion and organic word-of-mouth.

Luckily for the credit union industry, Rogue turned the card-linked partnership into a business boon using three distinct steps that credit unions of all sizes can also follow.

ANOTHER PERSPECTIVE

For a different approach to many of the same issues discussed here, check out the three-part breakdown of Vermont State Employees Credit Union’s VERMONT Platinum Credit Card, which offers a 4% APR discount on in-state purchases.

 

The Problem

Rogue took on a significant rebranding effort in 2007. The credit union made big changes to everything from its organizational tagline to its individual product lines, says Jeanne Pickens, chief marketing officer.

CU QUICK FACTS

ROGUE Credit Union
data as of 09.30.14
  • HQ: Medford, OR
  • ASSETS: $914M
  • MEMBERS: 83,577
  • 12-MO SHARE GROWTH: 5.69%
  • 12-MO LOAN GROWTH: 22.59%
  • ROA: 1.51%

“The idea was that everything we do needs to center around either living, giving, or supporting local,” she explains. “That essentially became our new brand filter.”

The credit union supported these goals through its own philanthropy and other measures, but it also wanted to reward members and the community for doing the same.

“The best way to do that was to look at how and where they used our products to spend their money,” Pickens says.

The Pitch

Rogue’s first step was to create a 1% cash-back Platinum credit card that offers a lower APR than the credit union’s classic card — 9.5% versus 12% — as well as a higher credit limit.

From there, Rogue concentrated phase two on creating its Buy Local program, where a network of merchants would provide discounts to consumers making a purchase with any Rogue credit or debit card.

To further drive this local message home, the credit union created 12 different card designs that feature images from within its branch footprint — which extends from Klamath Falls to the South Coast. And it used a photographer who shoots iconic Oregon imagery to do so.

Buy Local did not require Rogue to modify its system, as it is the merchants that apply all discounts, Pickens says. However, Rogue did provide the businesses with point-of-sale signage and also profiled them on in-branch displays.

“We knew the fact that we could advertise these businesses to our more than 80,000 members using our website would be a great selling point,” she says.

That’s important because, according to the BrightLocal survey, 28% of respondents listed “word-of-mouth” as the most effective type of promotion for their business, followed by “SEO” and “online local directories” at 20% and15%, respectively. 

We continue to see lots of interest from new businesses and new types of businesses. But it’s not about the quantity as much as the quality of the discounts they offer.

The credit union also pays for cobranded TV spots for businesses that provide larger discounts than their peers.

“For example, we had one local grocery chain that started out with a 10% discount,” Pickenssays. The company later scaled the amount back to 5% because it was so popular, yet the credit union remains committed to providing extra support because of the grocer’s initial willingness to go the extra mile.

The Results

Today, the Buy Local program has nearly 120 partner businesses, all of which are managed by the credit union’s sole community development officer.

“We continue to see lots of interest from new businesses and new types of businesses,” Pickens says. “But it’s not about the quantity as much as the quality of the discounts they offer.”

In 2013, Rogue members spent almost $640,000 at Buy Local businesses. And by the end of third quarter 2014, they’d already spent $724,000 more. According to third quarter 2014 data from Callahan & Associates, Rogue credit card accounts have grown 12.6% annually and credit card penetration is nearly 4% higher than its peers.

 

 

 

Feb. 2, 2015


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