In an effort to stimulate its collateralized loans, Library of Congress Federal Credit Union ($208.1M, Washington, DC) is trying to add a slam dunk on this year’s auto loan promotion amid the nation’s March Madness NCAA obsession.
“We wanted to offer a premium and get a conversation going, get our brand out,” says Marsha L. King, CEO of Library of Congress Federal Credit Union of the original auto loan promotion launched in January that offers 1% cash back on all new and used vehicle loans and refinancing.
In 2011, credit unions made 10% and 20.1% of new and used auto loans, respectively, capturing 14.6% of the overall auto market. In 2012, credit unions like Library of Congress FCU are looking for ways to continue growing this part of the loan portfolio, which many still consider to be the bread-and-butter of the industry.
And economic indicators are pointing to a rebound in auto sales in 2012. February auto sales are expected to be at or higher than 14 million vehicles for the second month in a row, and Edmunds.com is projecting 13.6 million new vehicles will be sold this year – a 6.3% increase over 2011’s forecast. So far, consumers are obliging. Ford’s U.S. sales increase 14% over February 2011, Chrysler’s increased 40%, and GM’s increased 1.1%.
Originally, Library of Congress FCU had hoped to book $500,000-$800,000 for each of the three months it planned to run the promotion. The credit union has achieved – and exceeded – its expectations. In January and February, the credit union booked $1.1 million. So far in March, it has approved more than $1 million in loans. Approximately $650,000 of that is booked with $409,000 that is approved and waiting for the member to choose their vehicle.
So how has Library of Congress FCU added an extra kick to this month’s basketball obsession?
People go mad in March, and so did Library of Congress Federal Credit Union, who embraced a basketball theme as a fitting finale for its auto promotion. Along with the NCAA and the nation, the credit union went mad, and added five basis points to its promotion, bringing the total to 1.5% cash back for March only.
The NCAA basketball tournament winds down this week, with the final four showdown occurring on Saturday, March 31, and the championship game taking place on Monday, April 2 (read our prediction for who will win the national championship). The tournament grabs nationwide attention, with even nonfans completing brackets and participating in office square pools. Last year, Chicago consulting firm Challenger, Gray & Christmas estimated the 2011 tournament would garner as much as 8.4 million hours of online viewing during work hours.
The credit union originally wanted to hit $800,000 in March auto loans, but is on track to break $1 million. To drum up excitement, it sponsored a two-day basketball giveaway in its branches and had members lined up at the doors waiting for the credit union to open. It purchased nearly 400 basketballs and gave most of them away in one day.
“We wanted to do something different for spring,” King says. “It was a lot of fun. Fun for staff. Fun for members.”
Library of Congress FCU is now “bumping up against $2 million,” King says as the 91-day promotion still has a week to go.
The success of the promotion goes to show a little creativity and pre-planning can go a long way. The credit union’s marketing consultant pitched the idea in November and the credit union launched the promotion less than eight weeks later. The basketball twist was just enough to keep employees and members interested and engaged through the home stretch.
“You can’t do the same thing over and over or you lose momentum,” King says. “I’m glad we did it. It has been so successful, and the members have enjoyed it, too.”