What’s the best way to attract new credit union members?

first_imgIt won’t surprise many people that the main reason people switch to a new financial institution is because of a change in life circumstances. Moving house or a change in marital status are amongst the top reasons people cite when asked why they are looking for or have moved to a new institution. Deciding to switch to a new provider for your mortgage, savings account and other financial needs is a big deal for most people so it really does take something significant to trigger a move.Financial institutions don’t have a lot of clout when it comes to the ‘why’ people switch institutions. However, when a consumer does decide to switch providers, FIs can influence where that consumer chooses to go. Having a secondary relationship with an institution is the main deciding factor for most people who are making a move to a new primary provider. FIs also have some degree of control over the other top reasons people mention:Convenient locationsPositive word of mouthWide product rangeThere is no doubt that, relative to all the other financial institutions out there, credit unions are having a stellar year. 2015 is the first time in history that credit union saving account balances broke a trillion dollars. One third of the US population is now a member of a credit union and consumer trust in credit unions remains consistent.There is more exciting news for credit unions: Credit unions are pretty much on par with national banks when it comes to where consumers say they would move their primary banking.5% would move to a national bank6% would move to a credit unionA recent study by the University of Michigan reveals consumer confidence with credit unions has risen steadily over the past 25 years, even as other FIs struggled to maintain the trust of their members during the 2008 Financial Crisis. Credit unions fostering these relationships with their members will ensure their continued ability to thrive.Why Referral Marketing For Credit Unions?We are starting to see more and more credit unions taking advantage of the current consumer sentiment and launching acquisition and referral reward programs. Referral or advocacy marketing is a very effective way for credit unions to acquire new members and reward existing members for their recommendation. If you need some convincing, here are some referral marketing stats that could sway you:63% of consumers surveyed for a 2015 report state that a loyalty or rewards program adds to their relationship with a brand or institutionThe same survey revealed that 34% of consumers claim that they would not be loyal to a brand or institution that does not have an incentive program.12% of consumers select where to do their banking based upon positive word of mouth10% of consumers trust their friends and family and are likely to move to an institute someone they know recommendsIt is a great idea to reward advocates of your credit union and incentive marketing is clearly an effective way to do so. It is also an effective way to attract new members and maintain their loyalty. If you do opt for a referral marketing program for your credit union, your next big decision will be deciding on which reward to offer.Rewarding Your MembersMost consumers have some level of familiarity with rewards and loyalty programs. Many are members of drugstore or grocery store programs and often receive rewards like coupons or money off purchases. Some are members of other types of reward programs that offer physical gifts. These reward types are appealing but not always the best option for credit unions. RewardStream works with a number of credit unions and many offer account credits as a reward. This is a sensible reward offer for credit unions. An account credit can be applied with minimal expense and without the need to involve a third party in order to fulfill the reward credits. And consumers like free money!Reward values vary from credit union to credit union. Some people offer $25 to new members and their referrers; others go as high as $50. When setting your reward value, you should consider what you are rewarding. A reward for activating a new checking account will likely be lower in value than a reward for opening a mortgage as mortgages tend to have a higher lifetime value for the credit union. Credit unions may also want to offer a tiered reward system which allows members to receive multiple rewards over a period of time for signing up for different services. This kind of structure is a great way to keep members loyal to your brand.Account credits are ‘traditional’ rewards and are likely to remain as credit union reward staples. However, as consumers become more digital and mobile, the types of rewards that credit unions can offer will diversify. Mobile wallets are one of the reward types we are starting to see proliferate. A recent survey revealed that 44% of mobile wallet users want their wallet to support loyalty and reward programs. Credit unions launching a referral program may also want to consider integrating with mobile wallet providers.The research demonstrates that consumers are interested in programs that reward advocates. As more and more credit unions launch referral reward programs, the competition between financial institutions to incentivize consumers to join their credit union is going to really heat up over the next few years. To stay relevant in an increasingly competitive space, credit unions need to find ways to set them apart from other institutions. A formal referral marketing program with compelling rewards can grow a credit union’s member base while also ensuring existing member loyalty. 90SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Rob Goehring Rob Goehring is the CEO of RewardStream, a leader in automated referral marketing solutions for credit unions, financial services and telecommunications companies. Rob has 20 years experience leading high growth … Web: www.rewardstream.com Detailslast_img

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