Turning Loyal Members into Brand Advocates

How credit unions are turning their most enthusiastic members into new member referals.

 
 

Membership growth is slowing and share draft account penetration merely creeping upward. With increased competition, the simultaneous challenge that credit unions face is to attract new members while cultivating loyalty among existing members. Word-of-mouth campaigns are a successful way to accomplish both initiatives by turning loyal members into brand advocates, thus retaining their business while they market to friends and family.

The challenge for credit union marketers is to help cultivate the type of messages they want their loyal members to spread. It is estimated that more than 50 percent of American business is based on word of mouth advertising, according to Jeffrey Gitomer in Customer Satisfaction is Worthless, Customer Loyalty is Priceless.

Segmentation is incorporated into marketing plans every day such as targeting indirect members within a certain distance of branches or new members without bill pay. Word-of-mouth campaigns take segmentation one step further by examining member behavior, not strictly their geographic location or product portfolio.

Targeted Campaigns

Successful word-of-mouth marketing campaigns rely on directing your marketing message to a targeted audience. U of C Credit Union ($671 in Boulder, CO) launched a “Reality Bites” campaign with t-shirts and temporary tattoos to stir up interest with university students about the financial realities of credit card debt, budgeting, bounced checks, and more.

Service Credit Union , whose membership base is largely made up of members of the U.S. armed services, created a free “Euro Rate Watcher” e-mail that includes the daily Euro conversion rate for exchanging US dollars in their German Branches. To date, the e-mails have been a big success and are very viral because they are easily forwarded.

“This free service is very useful for our members in Germany,” said Angela Whiting, website marketing coordinator. “You can sign up to receive the Euro conversion rate updates every weekday. If you click the ‘Tell A Friend’ link, it automatically creates an e-mail describing the free service and you can enter a friend’s e-mail address and send it.”

Customized Programs

Point West Credit Union ($94m in Portland , OR) has a unique program that rewards loyalty actually and allows for members to “self-segment.” Rather than the credit union pre-determining candidates for specific promotions, the points system is flexible and allows members to determine how to redeem their own points based on their individual interests and needs.

The credit union implemented a points system that rewards members for their tenure with the credit union, interest paid, dividends earned and new member referrals. The points can then be used to lower the interest rate on a loan, increase the interest on a certificate, or pay any fees they incur. The program is open, allowing members to use the points for their own needs.

“It is really neat when someone is looking at better rate [at another financial institution] and then they learn they can use their points,” said Robert Barzler, CEO of Point West.

The program has generated a lot of interest among members and employees, as well as other institutions. “We really like it – it is a little unique. In our market, we’re the only ones that have it,” said Barzler.

 

 

 

July 18, 2005


Comments

 
 
 
  • Test by Kunal. Don't approve.
    Anonymous
     
     
     
  • A good chunk of my marketing budget is allocated to member referral incentives. It's so much easier and not to mention more cost effective when our existing members refer us new members. We encourage our members to refer their family, friends and coworkers to us. Currently we give away Blockbuster gift cards as an incentive but soon , I believe we will have to offer more.
    Anonymous