When I was looking to purchase a new vehicle, I went to three dealerships to shop for the best deal. When it came time to finance it, I also shopped for the best deal and visited a local bank and my credit union.
This got me thinking about the differences between banks and credit unions, and more specifically how credit unions seek to differentiate themselves through their marketing efforts.
There are more than 6,000 credit unions in the U.S., and these non-profit, member-owned financial institutions provide competitive rates for loans, and checking and savings accounts to its members. You must qualify to become a member of a credit union, as many credit unions serve specific geographic areas, employee groups, associations, or religious or fraternal affiliations.
Credit unions are subject to federal regulations and offer many of the same services as banks. Banks are typically larger than credit unions and may offer more loan and account options. It is important to compare interest rates between credit unions and banks when you are looking for a mortgage or vehicle loan, or opening a checking or savings account. But there’s more to what differentiates banks and credit unions than just rates. The focus of their marketing efforts is unique as well.
The Facts on Credit Unions and Direct Mail
Direct mail plays an important role in credit union marketing efforts. Credit unions mailed more than 37 million mailpieces in Q1 2017 according to Comperemedia. These were mostly acquisition mailings promoting their auto loan (34%) and mortgage/home equity credit line (32%) products. Almost half of these direct mail offers included discounts or cash incentives for qualified loans. Credit unions are combining direct mail with multichannel marketing efforts to direct members and potential members to their website (91%) or to call an 800 number (83%).
Credit unions are heavily emphasizing potential member savings in a variety of ways in their mailpieces. These include highlighting how much members and potential members can save on their mortgage by refinancing. Some credit unions are offering a “$10 buy back” incentive when members bring in their old debit cards and unused checks when opening a new account. Sweepstakes, free gifts, and cash incentive offers are prominently marketed to prospective credit union members, with nearly 54% of offers being a cash incentive.
Credit unions also know they must compete on convenience, which is why mobile and online banking capabilities are a key focus in a majority of credit union acquisition direct mail offers. These capabilities are especially popular with millennials. Data from “Financial Lives of College Students – US, January 2017” shows that nearly 40% of students have a checking or savings account at a credit union.
Direct Mail Enhances Credit Union Member Acquisition Efforts
Credit unions can further enhance their direct mail acquisition efforts and increase their return on marketing investment (ROMI) by featuring the important benefits of being a credit union member with one-to-one, highly personalized, highly targeted offers to members and potential members. Full-color variable-data digital personalization technology is ideal for programs ranging from one thousand to more than one million mailpieces.
If you’re responsible for credit union marketing, follow these tips to make the best use of your direct marketing efforts:
- Differentiate your credit union by using direct mail to highlight the local, personalized customer service credit unions are known for.
- Add a personal touch by including a photo on the mailpiece of the member’s or potential member’s Member Services Representative.
- Invite the recipient to stop by your local branch to learn about your loan and account interest rates as well as mobile and online banking features. If you have multiple branches, use variable data to include a map of the recipient’s closest branch.
- Focus on the personal service you provide. According to the American Customer Satisfaction Index survey from CFI Group, credit unions surpassed banks with their customers’ overall satisfaction rating at a score of 87 out of 100, 8 points higher than the banking average. This suggests credit union members are more likely to feel valued and feel they received more personal attention as a credit union member.
- Draw attention to one of the most important reasons people become members of a credit union by using a Johnson box to highlight your low interest rates, low monthly payments on a mortgage or vehicle loan, or your monetary incentive offer for opening a new checking or savings account.
- Emphasize that your credit union also provides mobile and online banking capabilities for members, since these features are often associated with traditional banks.
- Don’t forget to include multichannel marketing and direct members and potential members to your website or call center for additional information.
By following these tips, credit unions can differentiate their brands and create new members. For more ideas about how to enhance your credit union marketing efforts and grow your membership base, please contact me or one of IWCO Direct’s direct marketing specialists today.
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