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.
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.”
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.