Bring New Members Onboard

Bank Transfer Day resulted in hundreds of thousands of new members. Now what?

March 1, 2012
Bring New Members Onboard


  • Last year's Bank Transfer Day highlighted the
    need for onboarding strategies.
  • CUs that persuade checking accountholders to adopt online banking and bill payment are far more likely to retain those members.
  • Board focus: Set policies that are friendly to new
    members and that encourage product use.


Credit union marketers have been so busy trying to attract new members they’ve had precious little time to consider what might happen if they were wildly successful. Bank Transfer Day—Nov. 5, 2011—and the months surrounding it saw hundreds of thousands of consumers join credit unions. That qualifies as “wildly successful.” The new challenge for credit unions: Now what?

Suddenly, the credit union conversation has shifted from attracting new members to welcoming new members. That puts member onboarding strategies on center stage.

Onboarding traditionally has been a concern of the human resources department. It had to do with the quality of a new employee’s first 60 or 90 days on the job. If a new employee felt welcomed—was given a mentor, took part in orientation, and was quickly embraced by a team or work group—that person would probably become a productive, long-term employee. If not, that new employee felt neglected or isolated, and was more likely to move on.

Now, onboarding strategies are a key component of member relationship management. These strategies help credit unions convince new members to move beyond solitary account relationships and use checking and deposit accounts, online banking, bill payment, mortgages, and other products and

Lessons of November

Bank Transfer Day highlighted the need to roll out the red carpet to new members. The Facebook-fueled campaign encouraged consumers to move their money from big, national banks to credit unions and other local, community-based financial institutions that charge lower rates and fewer fees.

Many consumers answered the call: Credit unions added approximately one million new members during the fourth quarter of 2011, according to CUNA estimates. In addition, there was 7.2% annualized growth in the number of share draft accounts for fourth quarter 2011 compared with an average quarterly growth rate of 3.2% from 2008 through 2010, NCUA reports.

Fueling the Bank Transfer Day movement were young consumers who embraced its social marketing approach, says Mike Schenk, CUNA’s vice president of economics and statistics. That makes the event and its aftermath “a tremendous opportunity for credit unions to gain ground in attracting young adults, an underrepresented membership segment.

“While these young members will initially bring deposits to credit unions, in the long run they’ll also bring loan relationships with them,” Schenk says. “This will be a very positive development over time.”

Holding on to these new members, he adds, will depend on how well credit unions:

  • Deliver the convenience young consumers demand through national surcharge-free ATM and shared-branch networks, online and mobile banking, and other emerging delivery channels.
  • Cross-sell by convincing young members that credit unions offer products and services that meet their needs.

“What matters most isn’t the exact number of new members gained,” Schenk says, “but what credit unions do with these new members.”

The fourth ‘bucket’

Consumers who switch financial institutions typically fall into one of three buckets, says Ron Shevlin, senior analyst at Aite Group. Consumers switch because they experience:

  • A “life event,” such as a new job, relocation, or marriage that changes their perspective or needs;
  • Dissatisfaction with their loan or deposit products; or
  • Poor service that makes them say, “I’ve had enough.”

Bank Transfer Day represents a fourth bucket of motivation by appealing to those who want to do business with a different type of organization. Shevlin says that makes Bank Transfer Day a one-time event rather than an ongoing pipeline of new members.

“Long-term, sustainable growth will come from better product performance and better customer service over time,” he says.

Shevlin says an effective onboarding process requires collecting information about members through brief surveys that explore satisfaction with the new relationship, their preferred communication channels, products they currently use, and when they expect to need certain products such as mortgages or auto loans.

He advises credit unions to focus onboarding efforts on new members who use products that offer a high potential for ongoing interaction, such as checking accounts or credit cards. Members who join through accounts that require minimal interaction, such as indirect auto lending, are less likely to be receptive to your onboarding efforts.

Next: Touch points

Touch points

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’

A CU’s ‘eWelcome’

New members who join $1 billion asset Meriwest Credit Union, San Jose, Calif., get an “eWelcome” in the form of emails sent at staged intervals throughout their first 90 days of membership, says Tony Cortez, vice president of marketing. The first week’s email welcomes the new member and offers a link to the credit union’s website for more information.

At the 14-, 21-, 30-, 60-, and 90-day marks, the credit union sends messages highlighting specific services—online banking, bill pay, and direct deposit—to those who haven’t yet signed up for them, Cortez explains. Emails promoting core products are also sent to segmented groups that have yet to adopt them.

The electronic communications work in tandem with an outbound calling program with similar criteria. While many members choose email as their preferred mode of contact, members can also specify other communication channels.

“Members can select the best method of contact—in-person, phone, mail, or email—and their favorite method of banking, whether it’s in-person, by ATM, mail, or online,” Cortez says.

An online account-opening process allows new members to join Meriwest and fund their accounts in one session. The same process is used for members adding products at a later date.

A switch kit offers a master account application, a close-and-transfer letter, and a direct deposit switch form. Setting up online banking and bill pay is a simple process supported by online videos. But members still face the time-consuming challenge of transferring their accounts.

This highlights the reality that switching financial institutions represents a major commitment for new members—making onboarding an ongoing challenge.

“Bank Transfer Day made a splash and caught the attention of many, especially the media,” Cortez says. “But something as serious as choosing your financial institution deserves more than a single day’s attention.”

Avoid the 'Emotional Unsubscribe’

Credit unions must ponder the timing and content of onboarding messages to avoid prompting new members to “emotionally unsubscribe,” says Ron Daly, president/CEO of DigitalMailer.

DigitalMailer and other vendors offer a “product matrix” to identify the next likely purchase for members based on current product use and demographics.

Daly compares this to online retailers’ recommendations for “products that may interest you” based on other purchases by “people who bought this item.”

“It’s not one-to-one-marketing, but it’s an approach based on making the messaging more relevant to the receiver,” Daly says.

Products and features most likely to engage new members include:

  • Low loan rates;
  • Better credit practices to extend offers to more borrowers;
  • Free checking;
  • Remote deposit capture, which allows members to make deposits remotely using images captured with a scanner or smartphone; and
  • Convenience services, including the virtual branch offered by online and mobile banking, as well as shared branching.

Daly says it’s essential to use the communication channels members prefer or they’ll simply ignore your messages.


Automated Onboarding

Member onboarding tools that are integrated with the core system make it easier to collect data, send mailings, and ensure members get the right offers, says Eric Olsen, director of professional services at Sedona Corp. Surveys and outbound calls can reinforce the relationship and gather data used to determine future offers.

“You’re trying to get a sense of who these people are, what their relationship with the credit union is, and what they want out of it,” Olsen says. “It’s not a one-size-fits-all environment.”

One way to impress newcomers is to facilitate an easy transition and ensure you have the right products to meet their ongoing financial needs, according to Harland Clarke, a CUNA Strategic Services alliance provider.

Harland reports the most successful onboarding strategies:

  1. Make it easy. Send every newcomer a personalized, no-hassle switch kit to encourage an easy transition from competitors and make it easy to sign up for a range of services.
  2. Communicate monthly. Deliver targeted communications to new members at least three times during the first 90 days.
  3. Ask how they feel. Schedule a new member experience survey early in the relationship to gain valuable feedback.
  4. Automate. Use triggers such as check re-order dates and anniversaries.
  5. Take aim. Use predictive intelligence to cross-sell the right product at the right time.
  6. Crunch your numbers. Measure the impact of your onboarding program.
  7. Do it right. Ensure compliance with regulations and legal requirements regarding security and confidentiality.