Holiday usage campaign improves BCU’s cost-effectiveness

BCU is a purpose-driven organization that empowers people to discover financial freedom. At $3 billion in assets, it is the fastest-growing credit union in the past 35 years, propelled by its commitment to provide extraordinary service to nearly 250,000 members across the U.S. and Puerto Rico.

BCU places a significant focus on cardholder engagement in order to ensure it remains relevant and provides ongoing value to members. The not-for-profit, member-owned credit union headquartered in Vernon Hills, Ill., has been a PSCU Owner for nearly two decades and a longtime subscriber to PSCU’s Advisors Plus group, which aims to help credit unions meet their financial and business challenges to generate increased revenue and growth as a result. As part of the credit union’s strategy for card-portfolio growth, BCU works with Advisors Plus to execute card usage campaigns for improved cost-effectiveness.

The Opportunity

BCU knows all too well the increasing competition for cardholder spending. The credit union rewards cardholders with additional points or cash back for purchases in select categories in order to ensure its “share of wallet” during peak spending periods like the Q4 holiday season. For a holiday usage campaign at the end of 2017, Advisors Plus was engaged with an additional objective to solve a recurring problem. Due to system limitations in past usage promotions, all targeted cardholders automatically received additional rewards for purchases in select merchant categories. Although this approach provides additional value to all targeted cardholders, the credit union incurs additional rewards expense from unintentional purchase activity.

The Approach

BCU and Advisors Plus formulated an innovative plan to test an activation requirement for a portion of the travel rewards portfolio. Before cardholders could qualify for the additional rewards associated with the promotion, they were required to “activate” the offer.

The objectives of the test were threefold:

  • Measure cardholder response to activation requirement vs. automatic receipt of rewards
  • Track spend behavior – activated vs. automatic receipt of rewards
  • Quantify expense reduction as a result of the activation requirement

In the month preceding the promotion launch, cardholders in the test group received two emails with easy click-to-activate instructions. The idea was to simplify enrollment for cardholders who were intentional about participating in the promotion. To manage member impact, the test group was limited to under 20 percent of total cardholders in the promotion.

In addition to transaction-level rewards (TLR) requirements, account selection criteria and project management, Advisors Plus set up a branded website to support the activation test.

The Results

As a result of the campaign, it became clear that cardholders who activated accounts in the test group were considerably more engaged. Specifically:

  • 85.5 percent response vs. 62.3 percent for non-activated accounts
  • $2,149 avg. responder amount vs. $1,546 for non-activated accounts
  • 25.09 transactions per responder vs. 17.36 for non-activated accounts

Most importantly, the activation requirement allowed BCU to significantly reduce rewards expenses associated with the test group. BCU now plans to employ the activation requirement more prominently in its next usage campaign.

For BCU, every campaign is viewed as a learning experience. The credit union likes to conduct testing to understand which offers and approaches best resonate with members, and it relies on Advisors Plus for its operational expertise, attention to detail and great overall execution. With support from Advisors Plus, BCU plans to continue to expand the scope of growth initiatives, test new offers, and develop additional targeted and cost-effective account management strategies.

Misti Hons

Misti Hons

Misti Hons is responsible for coordinating all new incoming marketing business to Advisors Plus. She is also the marketing analyst for several Alliance-level clients. Misti has been on the Advisors ... Web: Details