Getting the most out of your card data

We are bombarded with a nearly constant stream of reports and statistics about a variety of factors – all with the potential to affect our card portfolios, member engagement and revenue. While numbers are great, they are often too high-level to drive action. Instead of working to uncover actionable insights that could help increase penetration, activation and usage, many of us rely on guesswork and speculation.

Just like the old saying, “the proof is in the pudding,” credit unions need a way to easily leverage members’ card data to validate and/or challenge commonly held assumptions. Leaner, more effective growth strategies should be earmarked by solid documentation and understanding of transactional trends. By identifying areas of opportunity and revenue growth, and applying logic and experience to the data, credit unions can become high-performing businesses and grow their relevance.

Sounds good, but easier said than done, right? Wrong. Thanks to Member Insight, a proprietary suite of analytics solutions developed by PSCU, credit unions can now get the most out of their data, ultimately spurring data-driven decision-making. Every aspect of Member Insight was designed with the credit union business-user in mind, so it makes leveraging data easy. It provides credit union users with long-term cardholder and transaction data, for both credit and debit card portfolios, with strong analytics to shape strategy and drive value to overall member relationships.

PSCU’s newly released whitepaper uses 2015 holiday spending as a lens to offer an in-depth case on how credit unions can use Member Insight to quickly and easily uncover actionable insights. Here are some highlights:

Beginning the Data Journey

We started by taking a broad look at the spending landscape and diving into the year-over-year numbers for the months of November and December. For the purposes of this analysis, we adopted the “same store” approach, used in retail, and tracked spending on just those card programs that were continually active throughout the entire reporting period. This represented over 8 million credit union members spending $8.5 billion dollars on their credit and debit cards over the two-month holiday period. One of the first key observations we found was since 2013, the historically reliable consumer spending spike in November and December began to flatten. The total spent in 2013 and 2014 looked remarkably similar. In fact, credit and debit card spending constricted by almost 2% in 2014 when compared to the same holiday months in 2013.

While individual credit unions may see different performance, the study indicated that holiday spending, overall, may have reached its peak.

A Crossroads

Even though spending on a monthly basis was not incrementally higher, we wondered whether there were other perspectives that revealed more meaningful insight into holiday spending. So, we analyzed consumer spending during the week of Black Friday 2015 compared to 2014, and found that Black Friday week was approximately 2.5% higher in 2015 than the previous year. The actual week showed a positive variance while the monthly comparison showed a negative one.

We also looked at how Black Friday and Cyber Monday compared to a “typical” week. To do this, we aligned Black Friday/Cyber Monday week with the equivalent week of the prior month and discovered a 19.1% increase in sales. It appears that the entire week may be a better barometer of holiday spirit than overall spend.

Digging Deeper

Knowing that advertising budgets going into Black Friday and Cyber Monday are huge, and since overall volume did not change all that much, we wondered who got a good return on their advertising investment. We compared merchant sales volume during this year’s Black Friday week against the equivalent week in October using Member Insight’s Merchant Category feature. This feature aggregates individual store volumes up to their Merchant Category – a standard industry grouping – and then up again into 25 Merchant Category groups uniquely defined by PSCU.

It was no surprise that the Large Retail Category group (Department, Grocery and Discount chains) had the largest single increase in total spend. However, this category is only one of four Category Groups that showed any increase whatsoever. The Miscellaneous Stores group had an increase of 33% overall, which is significant. We then drilled down into this group to see if we could identify the top movers by sales volume. The top 10 winners, by Merchant Category, saw their sales more than double (up to 140%) over the same week a month earlier.

Uncovering Actionable Insights

Now the big ticket question: Is there something actionable to be taken away from all this analysis? We think there is. By drilling down into merchants within the Miscellaneous Stores Group, we identified that sales at Hobby Stores, Artist Supply Stores and House Furnishing Specialty Stores increased markedly. We then filtered down to those located within a few of our member credit unions’ footprint using the merchant address information. From there, we have the information needed to create holiday season promotions with local independent retailers for this year and next.

This is just one example of how Member Insight can empower PSCU member owner credit unions to take a deeper dive into their data and explore the impact of the evolving payment landscape. To learn more about Member Insight, visit PSCU.com/MemberInsight, or download the entire whitepaper for a more in-depth look at the above case study.