You Have Chosen ... Wisely

Purdue Federal procures longer lasting financial relationships with its affinity card product.

 
 

Founded on Purdue campus in 1969, Purdue Federal Credit Union ($641M, West Lafayette, IN) offers financial services to a 59,000 strong international member base including Purdue students, faculty, staff, alumni and communities where Purdue has a regional campus.

From having $72 million in their total card portfolio in 2006 to an outstanding $131M in 2010, Purdue has been strategically developing it card program for a number of years, bolstered in part by its affinity card products. 

Perdue Federal 2006 – 2010 Portfolio Sales Volume

 

2006

2007

2008

2009

2010

 Gold

$15M

$12M

$483k

 N/A

N/A

Classic

$16M

$10M

$3M

N/A

N/A

Platinum

$36M

$36M

$44M

$43M

$43M

Affinity

$3M

$29M

$53M

$67M

$86M

TOTAL

$72M

$89M

$103M

$111M

$131M

Prior to forming a strategic partnership with Alumni Association in 2006 that give legs to the Affinity program, Purdue has been experiencing stagnant card growth, hovering for years at $25M. The credit union also found itself dealing with high attrition.

“The same student who opened an account were, four years later, closing the account” says Stephanie Hainje, the institutions credit card program specialist.

 When Purdue Alumni Association became unhappy with their previous card issuer (MBMA?) now bank of America, “We were a natural choice for them,” she says.  

Rapid developments gave Purdue Federal less than 2 months to create and set their bid, and once accepted, they had less than 6 months to implement the program.  

  • Going into effect on July 2006, the credit union issued 52 new cards the first day, with instant issuance so members could make purchases right away and not be kept waiting.
  • In the first month, 302 new cards were issued with $842,000 in new credit lines.
  • That number has been exceeded nearly ever quarter (save two) for 5 years.
  • The highest production month created 3.3 million in new credit lines, through they average between 1-2 million monthly.
  • Saw an immediate improvement in student membership retention (17% in first year affinity cards were rolled out.)
  • Their most profitable product, it was ranked by their issuer visa as the 105th most profitable portfolio among issuers.

The card launched with two Purdue based designs, and eventually launched a 3rd featuring athlete Drew Brees. “The card image extremely important to our success” says Hainje, and each graphic appeals to a different member demographic. A customized cash back rewards program also allows points to be contributed to the alumni organization or the John Purdue club.

The credit union also developed its existing, non affinity cards, combining both its gold and classic cards into its platinum program in 2007. Deepening relationship for card holders also remains a strategic priority at Purdue.

 Of its entire card portfolio, the credit union has only 606 single service accounts (defined as just a card and savings account) and maintained an average 3.24 relationship per member as of Feb. 2011

 

 

 

March 17, 2011


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