Every credit union wants to be the resource members turn to when they have a financial need or challenge. But what does it take to become the choice members think of first? The best mortgages? Great CD rates? Low fees?
Those are important, of course, and credit unions tend to have a leg up when it comes to rates and fees. But are these the secret to go-to status? CO-OP CU thinks there’s a better way.
At the recent Marketing Association for Credit Unions (MAC) Conference, keynote speaker Samantha Paxson talked about convenience, frequency and the value of “flipping the funnel.” Instead of focusing on big-ticket, once- or twice-in-a-lifetime financial products like mortgages, she urged credit unions to recognize that today’s consumers want a financial services partner who’s there to help manage their day-to-day lives. Give members fast, convenient, highly personalized tools that they rely on again and again, and you’ll be more likely to lay the foundation for long-term relationships and top-of-mind and -wallet status.
CO-OP CU arrived at its convenience-is-king recommendation after conducting research for their CU Growth Outlook Report with EY, a global consulting firm, and Mastercard, which they relied on for a better understanding of consumer payment behavior.
The research found that:
- Credit union members have 3x the number of financial relationships as non-credit union members—proof many don’t perceive their credit union as able to meet all their financial needs.
- Convenience features and digital payments are primary drivers of daily interactions and member engagement.
- There’s a direct link between daily money management and long-term spending and savings. Give members an easy way to stay on top of their spending and payments today, and they’re more likely to choose your credit union for mortgages and investments tomorrow.
Based on these findings, CO-OP CU recommended that credit unions find ways to engage with members every day, provide financial guidance, and offer the tag team of competitive rates/pricing and member-first convenience.
Here are three ways credit unions can build on these recommendations.
1. Get people talking about your debit and credit cards
As we all know, it’s a lot more expensive to gain new customers—five to seven times more expensive, depending on the industry—than it is to motivate existing customers to use more of your products and services, or to use your products and services more often.
The problem for credit unions is that most people only apply for loans or open accounts when they hit a major life milestone, and these milestones don’t come along too often. No one is going to “impulse buy” a mortgage. So how can you effectively engage members on an ongoing basis?
One way is to encourage members to choose and use your credit and debit cards. The vast majority of consumers (90%) have debit cards and/or credit cards (82%), and it’s not uncommon for them to use their cards on a near-daily basis. That’s a near-daily opportunity to get your name and logo in front of them. Motivate members to reach for your card when they pay, and you’ll build income, brand recognition, and stronger long-term relationships.
How can you make your cards the ones members reach for, and even better, the cards that your members are showing others and talking about?
Most credit unions default to touting rates and rewards, but a hugely overlooked consideration is the design of the physical cards. Julia Schoonenberg, Executive Vice President for Payment Services at IDEMIA Secure Transactions, points out that in an era where so much banking is happening online, “The look and feel of the card has become if anything more critical … as that all-important physical link between the cardholder and the bank [or credit union].”
Creative card designs offer parallel opportunities to reinforce a sense of local pride, highlight local artists, or tap into identifying characteristics of a specific SEG or demographic.
P1 FCU created a hugely successful video campaign, winner of a MACQUEE Best of Show Award, showcasing debit card designs for fans of the University of Idaho football team. And Keesler Federal CU, offers members the choice of 27 unique debit card designs, some of which pay homage to the credit union’s military roots.
2. Raise awareness about the convenience features in your app
Instead of spending valuable marketing dollars simply promoting that you offer mobile banking—so early 2000s!—call out the specific, convenience-oriented features that members value.
Why is it so important to focus on features? Because your members need to understand what you have to offer and how it benefits them. Remember the 3x higher number of financial relationships stat mentioned earlier. The average member does not think your credit union can do it all, and just because your app offers a feature or service, it doesn’t mean your members will find or use it.
Here are a few examples of credit unions delivering the convenience features that members value most, often through fintech partnerships, and how they spread the word to members.
At Pacific Northwest Federal Credit Union, the navigation menu doesn’t just include a link to “Digital Banking,” but instead lists many of its specific app features, like P2P payments, credit score monitoring, and digital wallet options. The website dedicates valuable real estate to explaining member-valued features like payment options.
Credit Union West recognizes the value of giving members a fast and easy way to check their credit score and credit report and receive personalized money-saving offers that come directly from the credit union. A recent report from TransUnion found a clear link between credit monitoring and improved credit scores, and being able to use this information to offer better loans and credit cards is a win for both members and credit unions. Credit Union West’s fintech partner makes the process easy and convenient, and members can tap into this resource directly from the credit union website.
Most credit unions use valuable homepage real estate to highlight competitive rates, but CO-OP’s research actually shows that on their own, competitive rates only increase one’s propensity to engage with a credit union by 13 percent. However, when coupled with convenience features, that propensity increases to 67 percent.
There is a significant opportunity here for credit unions to reevaluate their website’s homepage content, the prominence of convenience features driving daily interaction in their main website navigation, and the products and services they highlight in their email, social, and other campaigns.
3. Deliver integrated, in-context education that shows how daily money habits impact financial wellness.
Many credit unions provide a fantastic library of educational tools and content to improve members’ financial wellbeing. But those resources tend to live in a silo, with little connection to the choices they could have a positive impact on.
What if your credit union found ways to bake financial education directly into every financial tool or product you offer and every member interaction, especially those related to payments?
When a member is investigating credit card options, don’t focus only on rewards and interest rates; incorporate financial education. For instance, help members understand the costs of carrying a monthly credit card balance on your various card offerings or the implications of frequently maxing out their credit card.
Once members are using your payment tools (debit and credit cards) for their everyday purchases, you’ll have access to reams of transactional data you can use to better understand them and suggest solutions that can impact their financial wellbeing, i.e., the classic, “right offer/right member/right time.”
Many credit unions utilize data about their members to make product recommendations, but can you leverage data to target financial education efforts?
Members need and want help to manage their finances. The good news, according to the CO-OP findings, is that they already trust your credit union more than national banks and fintechs, and are likely to have their most important financial product with you. The bad news is that your credit union is least likely to have the products members use most frequently and interact with the most. You’re also the financial partner who is least likely to hold most of your members’ money.
This isn’t actually bad news though; it represents a golden opportunity! What could flipping the relationship funnel do for your members and your credit union?
Is your credit union looking to redesign its website? At PixelSpoke, an employee-owned cooperative, we draw from our deep expertise in the credit union industry, UX/design best practices, and digital marketing trends to create easy-to-use, high-converting, award-winning websites. If you’re interested in learning more, feel free to reach out using the form below.
