Credit unions must establish “touch points” that determine when, where, and how they engage new members, says Susan Eick, vice president of program innovation, research, and development at Deluxe Corp.
Understanding the member’s product purchase sequence allows credit unions to identify the next logical product the member will use so the credit union makes the right offer at those touch points. Analyzing the results allows credit unions to refine their onboarding programs by tracking how many members were contacted, during what time frame, with what messages, and how they responded.
Eick says credit unions that persuade checking accountholders to adopt online banking and bill payment are more likely to retain those members, citing a 2010 study by Deloitte.
“Every year, 20% of customers at financial institutions who have only checking accounts will switch institutions,” she says. “If you make sure they have a checking account and bill pay, that drops to 1.5%.”
Credit unions should also aim to reduce the time and effort required to change direct deposits and electronic payments, Eick says. Deluxe introduced its SwitchAgent Service in October 2011 to offer “concierge-level” switch services.
New members at participating credit unions sign a form that authorizes the SwitchAgent Service to move accounts on their behalf. Deluxe then contacts the new member to collect account information, notifies payers and creditors to move pre-authorized transactions to the credit union, and provides a schedule for the process, updating the accountholder along the way.
The service takes advantage of Deluxe’s relationships with billers and payers to reduce the time required to transfer deposits and payments from an average of six weeks to three weeks or less.
“In these economic times when people are living paycheck-to-paycheck, it’s difficult for people to fund two accounts and keep them open,” Eick says. “It’s critical to reduce that transition time for both the member and the credit union.”
A microsite approach
Local Government Federal Credit Union in Raleigh, N.C., uses a microsite to guide members and nonmembers as they switch to the credit union’s checking account. The site, “Make the Move,” takes a conversational tone to help members shift their financial relationships, says Ashley Ruffin, vice president of marketing for the $1.1 billion asset credit union.
A three-step process determines new members’ eligibility to join the credit union, with ineligible applicants directed to sites that help them find another credit union.
New and current members alike can use the site’s tools and printable work sheets to follow a step-by-step process for switching accounts and e-payments.
“It’s almost like someone is standing beside you going through the switch step-by-step,” Ruffin says. “When you complete the process successfully, it may tell you, ‘Way to go.’ ”
Bank Transfer Day and the “Make the Move” promotion combined to deliver a 46% increase in new checking accounts in October 2011, followed by 17.6% growth in November 2011. That compares with 8% to 10% monthly growth in checking accounts during the first nine months of 2011.
“We focus on the checking account because that’s where we see the greatest depth of relationship,” Ruffin says. About one-fourth of members have savings-only relationships.
Local Government Federal, which had an average annual member growth rate of 14.2% from 2006 through 2010, faces a unique onboarding challenge because it has no branches.
“We don’t have the latitude to say we’re going to run this Make the Move program and ask people to promote it on the front lines,” Ruffin notes. Instead, members can use 239 branches operated by State Employees’ Credit Union in Raleigh.
Local Government Federal has six field development officers who visit area government offices to explain credit union products and services to employees.
A seven-month onboarding program for new members starts with a welcome letter. That’s followed by messages promoting checking, convenience services, auto loans, credit cards, personal loans, mortgages, and home equity lines of credit.
The program ends with a request to refer a friend or family member to the credit union. “Our greatest asset,” Ruffin says, “is word-of-mouth.”
Next: A CU’s ‘eWelcome’