They came for the deposit rates. How do you convince them to stay?

Not everyone likes to think that a consumer chose their credit union simply because of a great rate, but we all know that’s the case for some portion of every credit union’s membership. In fact, a study by Morning Consult reveals that “prices and fees” rank #2 in the top five reasons that consumers switch their primary financial institution.

Today, given the high-interest rate environment of the last year and a half, CDs are the rate-driven product most likely to capture a consumer’s attention. According to the Federal Reserve, CDs saw a 1,046% increase, from $36.5 billion in April 2022 to $418.4 billion in January 2023

It’s no wonder that credit union marketers are under pressure to promote this particular product.

But are rate-driven CD campaigns a wise choice in the long run? Can you convert a rate chaser into a loyal member? That all depends on your follow-up. As Laurie Flanders, VP of Client Solutions at Strum Platform, described in a recent episode of The Remarkable Credit Union podcast, she views new members who joined to open a CD as “lease to own” members. That means you have until the CD matures to convert these temporary members (lease holders) into lifelong advocates for your institution (owners).

This conversion challenge isn’t new: Credit unions have always dealt with members who came in for a great loan rate, didn’t opt in for other products, and disappeared once the loan was paid off. And credit unions with indirect auto loan relationships experience this challenge on steroids, as indirect members often perceive their loan as coming from the dealer.

The first few weeks after a new member opens a CD are a critical window you don’t want to miss. You’re more likely to be top of mind for them, and they’re more likely to open your emails and respond to other communications. Don’t miss this opportunity!

The first step is to make sure you can target communications to new CD holders who weren’t previously members. Then develop a welcome series, whether via email, direct mail, or a combination thereof, that hits the following points:

1. Emphasize the credit union difference. It’s likely that many of your new CD holders have accounts at big banks, so now is a great time to hone in on the credit union difference, including what it means to be a member-owned institution, and to highlight your credit union’s mission, values, and unique value proposition. What is your why? Do you have a member story you can highlight? This is the time to make an emotional connection with your new account holder.

In another episode of The Remarkable Credit Union podcast, Jack Lawson, President and CEO at Clearwater Credit Union, stressed the importance of using six critical principles to guide credit union strategy: member focus, community engagement, long-term resiliency, positive social and environmental impacts, transparency and good governance, and culture. Your marketing efforts should then convey how you’re putting these principles into action.

Lawson emphasized the importance of ensuring your marketing efforts support your credit union’s long-term strategy, not just your short-term sales goals. These efforts, he says, are invaluable and lead to deeper, lasting member relationships, “We are always competitive on price,” he says, “we’re always competitive on product and service delivery, [but] we win on values.”

2. Promote your financial education options. As a member’s partner in their financial well-being, your credit union provides the tools, resources and support members need to live their best financial life. Let’s make sure your new members know these tools are available.

Include links to content that’s specific to CD account holders’ needs—for instance, a post that shows the role that CDs can play in building household wealth (see these insights from RetirementEgg.com for content ideas) or an upcoming retirement webinar. If you offer free consultations with investment and/or financial advisors, make sure your new members know about this option. A consultation is a great way for them to develop a more personal relationship with your credit union early on.

And don’t forget the importance of keeping members in the loop when it comes to fraud prevention. Credit union fraud rates increased an astonishing 70 percent in 2022. Members need to know how you’re protecting them from fraud—and the role they can play, too.

3. Identify upcoming financial milestones. As we discussed in an earlier post, The 3 key DOs and DON’Ts of lifecycle marketing, one of the most effective ways to turn members into promoters is by being present and ready to help at crucial moments in their lives. See the post for highlights on how to make that happen (and be sure to check out the surprising overlaps between Ozzy Osbourne and Prince Charles!).

Get started by sending your new members a survey to uncover the financial milestones they might be reaching, or trying to reach, before their CD matures. Will they be sending a child off to college? Buying a teen their first vehicle? Preparing to retire? This information is critical in enabling you to meaningfully reach out to them a little further down the road.

4. Share your community impact story. You will always know your community better than the big banks, and that can be a huge advantage if you play your cards right. Show your new members photos from community events, testimonials from community partners, and other proof you’re working to improve your community’s well-being.

If there are any member engagement opportunities around your community work, make sure they know about those, too. Maybe they can apply for a scholarship, nominate a favorite organization for funding, attend a street fair, or vote on where your impact dollars should go? They might still be getting to know your credit union, but chances are they already know their community and would be excited to get involved. 

5. Cross-sell, but save it for last. Can you cross-sell to your new CD holders? Absolutely, but don’t do it right away. Let them get to know you a little and establish the foundation of a trusting relationship before chasing any more of their wallet share.

Once you’ve invested the upfront effort in gaining these new members’ trust and you’re ready to cross-sell, checking accounts are an essential place to focus your efforts. These tend to be a “sticky” product (According to Bankrate, on average U.S. adults have had their same primary checking account for more than 17 years) and a stepping stone to additional relationships.

This case study from Onovative shared highlights from a cross-selling campaign one of its credit union customers undertook to convince indirect auto loan holders to open a checking account. The key to their success? An offer that leveraged the original relationship (the indirect loan) and a direct mail letter that included a QR code for multi-generational appeal. The campaign had a target audience of 2,782 and the credit union gained 116 new checking account relationships—an impressive conversion rate of 4.2%.

Great rates might have brought this member to your credit union, but a rate-only relationship will always be a race to the top, so to speak. It’s up to you to show them that there could be more to your relationship, and why the member should invest additional energy on their end.

With a thoughtful, personalized onboarding campaign and thoughtful, personalized follow-up actions, today’s rate chaser could be tomorrow’s committed long-term member. The steps you take now can play a decisive role in converting them from “lease-holder” to a full-fledged owner.

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