Skip if you can!
It is surprising how many credit unions do not offer a skip- a- loan payment program. The reasons vary, from uncomfortable with a fee based promotion, to promoting fiscal responsibility for the member. Others will offer it to their members, but not actively promote it. I was a member of my credit union for eight years before I learned they offered a skip-a-loan payment each spring.
What we found, based on our experience as a credit union marketing provider, was that members look for these promotions. When a marketing program consistently generates closing rates of 25% year over year from direct mail, you can assume members are receptive.
Run with it!
Even if you choose to limit your marketing your program options to in-branch or web, you will generate significant interest. Some of our clients rely on these two channels and have shared their results with us. Generally they achieve a close rate of around 10% of eligible loans.
Incorporating email will provide lift. Email is a great channel for a skip-a-payment program. It is low in cost, economically reset to give the campaign pace, and provides easy response when combined with a PURL. A number of our clients use in-branch and web in conjunction with email. We see close rates of around 16% for campaigns using the three channels.
The most effective campaigns include direct mail. We see close rates of around 25% of eligible loans when a letter is used in conjunction with web, in-branch, email and PURL. The simple reason is direct mail provides greater reach then email, web, and in-branch. Open rates are difficult to quantify, but the member’s existing relationship with the credit union makes the letter relevant and compels them to open.
Execution is key to your success!
The key is to make responding easy by including a well thought out loan form. Offer your members a PURL for quick response and convenience. The member has their own personalized URL (PURL) in all mail and email communication. Pre-populate all forms and the PURL with appropriate information and each eligible loan. It is important to make the member think as little as possible – and all they have to do is submit.
We encourage credit unions to consider how the responses are going to be processed. Make the program process easy for both lending and member services employees. In other words, the form should mirror the steps they will have to perform to process skip-a- loan payment requests.
The skip –a-loan payment program has become a feature for credit unions and is one more compelling reason to use the credit union for lending needs. In most cases, it adds to the bottom line as additional income, and for others, they take the additional interest income and make it a charitable donation.
Take advantage of the program and you may just put a little skip in your step this summer!
