Credit Unions could be faced with a significant increase in the cost of sending
required statements in the coming months. Why? The U.S. Postal Service announced
in October that it was taking drastic actions to protect postal workers. Although
this action is more than warranted, it translates into possibly a 20% increase
in postage costs. eStatements offer a number of strategic opportunities to combat
rising statement costs and gain strategic business advantages that generate
additional revenue. Here are three strategies to consider:
1. Control Rising Postage Costs through Digital Presentment
The possible increase in postage cost is coming at a time when CU executives
are challenged with declining income from historically low interest rates. In
most cases, credit unions can eliminate costs by transitioning their statement
delivery process from paper to an electronic method. Consider these eStatement
facts:
- eStatement cost savings increase, as postage continues to increase for paper
delivery
- eStatement costs do not increase when postage increases
- The higher the eStatement adoption rate, the more your CU will save
Here’s an example. If a 20% increase in postage occurs, a CU with 30,000 statements
delivered each month could be faced with an increased cost of $21,000 per year.
If this same CU implements eStatements and achieves a 10% adoption rate, the
CU could realize a cost savings of approximately $18,000 per year. By implementing
eStatements the CU’s net cost only rises $3,000 per year. An adoption rate of
12% could offset a 20% postage increase and for every eStatement delivered over
the 12% rate the CU could begin to reduce operating expenses!
TIP: In estimating your CU’s adoption rate expect approximately 40% of online
banking users to switch to eStatements and the same number of non-online banking
members to sign up if eStatements are delivered outside your online banking
product.
2. Tap Your E-mail Database for Hidden Revenue while Providing Statement
Information
There’s gold in those e-mail addresses. CU’s need to begin to use e-mail marketing
to keep in touch with members by sending newsletters, promotions, updates or
offer special deals. This strategy will not only reduce costs, it can increase
services per member.
Surveys have shown that permission-based e-mail marketing helps sell products
and build member relationships. A survey, conducted by Callahan & Associates,
reported that nearly 70% of credit union members surveyed said they are willing
to give out their e-mail addresses to their credit unions, and another 11% said
they would do so under the right conditions.
Steps to take are:
- Formalize a strategy and a budget for e-mail marketing campaigns
- Get the member’s permission to use his or her e-mail address
- Create a member e-mail database
- Use MCIF information to develop special, targeted offers
3. Use eStatements Proactively – Make Every Contact Count!
Getting the Right Offer, to the Right Member at the Right Time generates revenue.
eStatements with custom, targeted offers will better enable your credit union
to compete for your member’s business in an efficient & cost effective manner.
Targeted banner and button campaigns are crucial to an essential part of your
eStatement delivery, which helps to get the right product in front of the right
member, at the right time.
EStatements can:
- Provide thousands of new marketing opportunities per year to generate additional
revenue
- Present targeted, personalized offers for new services to each eStatement
member
- Build and enhance member relationships
- Increase member loyalty
- Use existing technology to deliver products & services 24/7
How Does $80,000 in Savings Sound?
Since implementing eStatements in September 2000 NWFCU (Herndon, VA) has achieved
a 15% adoption rate and has saved over $80,000 in statement cost!
Joan Stroud, Marketing Manager of NWFCU hasn’t stopped with just the savings.
She is making every member contact count. This summer NWFCU capitalized on an
eStatements campaign that provided and presented targeted offers to eStatement
members that did not have a car loan at NWFCU. Stroud is happy to report ''$2,300,000
new car loans in a click!''
Put $$ in Your Pocket ~
DigitalMailer, Inc. is an eStatement provider that assists our clients in gaining
a strategic business advantage over competitors via electronic statements, newsletters
and e-mail marketing campaigns. Our eStatement products were designed by CU
professionals to reduce operating expenses, enhance cross-selling opportunities
and increase revenue for our clients. We service credit unions and mortgage
service providers. For more information on DigitalMailer, Inc. please go to
http://www.digitalmailer.com
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best practices and valuable lessons learned from credit unions and financial
service providers, click on the link below:
http://www.digitalmailer.com/newslettervol1iss6.html
Contact Information:
Ron Daly
rdaly@digitalmailer.com
Toll Free (866) 994-4900