3 steps to generate fee income by improving your holiday skip-a-pay process

Because it’s the holiday season, many credit unions offer a holiday skip-a-pay promotion. However, from our ongoing research and analysis of credit union websites, the majority of credit unions require a member to download, print and complete a PDF of the holiday skip-a-pay form and then bring it into the branch. That’s three steps too many.

The benefit for improving the skip-a-pay process could mean additional fee income for a credit union. Our research has found that some credit unions charge a small fee of $25 to $30 to process this transaction. Some credit unions are even offering members a chance to win $250 to $1000 for completing a skip-a-pay form.

Imagine what a 10% to 15% increase in holiday skip-a-pay conversions could mean to a credit union to close out the year.

1. Simplify the skip-a-pay process | Watch more about simplicity >>

The first step in improving the holiday skip-a-pay process would be to create an online form, optimized for mobile, that would pre-fill a member’s basic information.

As an added bonus for the member, the form would also import all applicable loans a member could choose to skip-a-payment for. Let’s be honest: how many members know their loan numbers off the top of their head? Most don’t, but a credit union’s core system sure does. Don’t make a member go searching for it. Simplify.

This would take a highly complicated, multi-step and multi-location system to a simplified process that could be completed by simply clicking a pre-filled application confirmation button.

2. Segment your membership | Watch more about segmentation >>

To improve upon this process further, credit unions can take a pro-active approach in offering the skip-a-pay offer to specific members. For some of the credit unions we consult, we observe they put just one link to their skip-a-pay PDF on their cluttered home page.

As an alternative, we recommend the credit union play the role of being a member’s financial advocate, one that recommends the best personalized offerings for the member. This is “people helping people” in action. Credit unions do this by running a targeted email campaign sent to those who might best qualify for the skip-a-pay offer.

Notice I don’t recommend implementing a spray and pray of this offer because it may not appeal to every member at the credit union. To segment this list, we recommend running an analysis to find common patterns about who took advantage of last year’s holiday skip-a-pay offer. Through this analysis, a more targeted list can be compiled with the possibility of yielding higher conversions.

3. Tie in referrals and social sharing | Get 4 tips for using referrals >>

As I have written before, referral and social sharing must be made part of a credit union’s overall marketing process. Both can have a huge impact for your credit union as it turns your members into the most trusted marketing channels that have ever walked this planet.

Once a member submits the pre-filled holiday skip-a-pay form, they are then prompted to refer their friends and family to the credit union via email, Facebook and Twitter. A prefilled message would be composed along the lines of:

Local Credit Union just gave me one of the best gifts this holiday season. They allowed me to skip a loan payment. This now gives me an opportunity to give the gifts I want to give to my friends and family.

They also wanted me to give you a gift as well on their behalf as they are offering you $100 to move your auto loan, home loan or credit card over to them. Click here if you want to get started.

Traditionally, credit unions might think to link the offer to a loan application, but from our experience, this would break the entire referral process for two different reasons:

1.      It’s too direct and consumers may not be ready to convert just yet

2.      There is no way to capture basic information that can be used to nurture the relationship overtime

Instead, our recommendation would be to link this offer to a landing page with a lead generation form.

Enjoy The Gift That Keeps on Giving

Let’s assume that with the traditional PDF process, your credit union manually processes 1,000 holiday skip-a-pay requests at a fee of $25, generating a total of $25,000 in fee income.

By implementing the above three steps, let’s say you experience a 15.8% increase in conversions resulting in additional fee income. That’s an additional $3,950 in fee income.

The real benefit can be found by tying referrals into the process. Let’s assume that 13.7% of the members who took advantage of the digital optimized promotion used the referral and social sharing.

A month later, by reviewing the landing page analytics, you find that these Facebook posts and tweets helped to add over $1,000,000 in loans to the books from consumers moving their auto loans and credit cards over to the credit union.

Now that sounds like a pretty good gift any credit union would like to find wrapped under their tree this year.