Growth Using Data Modeling
One of the top twenty-five credit unions in the country faced slow growth and low product penetration per member. They asked DMN3 to help increase assets and grow the number of accounts through direct mail.
Challenge: Reactivate Members and Attract New Ones with Targeted Direct Mail
Our client, a Credit Union Charter, limited new members to only one industry. The employers needed to “sign on” before their employees could join.
To add to this challenge, recent layoffs at one of their biggest employers caused a large number of members to lapse — meaning they had zero balances and no activity for over six months. In addition, the average member age of 50 presented a challenge. Consumers tend to establish checking account and credit card relationships at a younger age. Client was not sure which products made sense for the older members.
While cross selling to grow each member’s share of wallet made sense, no marketing customer information file (MCIF) system existed. With no easy way to look at the complete member relationship, we could only look at membership by product.
Data Modeling Approach
Using Data
Based on the obstacles, DMN3 needed to develop new data strategies to look at the best prospects by product as well as next-best product for each member.
Members ranked by decile for a propensity to make an auto loan.
We looked at the current members by product, building member profiles and models for each product to target other “like” members.
To refine the targeting even further, we created a Permutation Model to predict the next-best product for each member.
We also identified the lapsed members to see if we could reactivate them.
Campaign Execution
Once we knew the member targets and the products to offer, we helped to develop life cycle marketing campaigns.
Comparison Chart Drives Credit Card Sales
DMN3 used a combination of direct mail and email to promote the Credit Union’s competitive credit card APR and terms compared to large banks.
An email reminder, sent to direct mail non-responders, more than tripled visits to the PURL landing pages.
Used unique offers and an integrated win-back campaign to inactive members that included direct mail, email, PURLs and a landing page.
Shared Branch Campaign Direct Mail
Raised awareness and usage of the nationwide network of ATMs and Shared Service Centers, using email and direct mail to overcome the small number of actual credit union branches.
Results
Although annual membership grew only .58% year-over-year, the number of accounts increased by 40,000. That equated to a 10.52% growth in accounts.
Although annual membership grew only .58% year-over-year, the number of accounts increased by 40,000. That equated to a 10.52% growth in accounts.
Using multi-channel campaigns to make strong offers to members achieved the following results:
- Credit card direct mail response increased by 182%—this was at a time when industry response had declined.
- Increased checking account penetration by 15%.
- Shared-branch and ATM transactions increased by 26%.
- Win-back campaign reactivated one in eight of lapsed members.
- Generated over $18.5 million in auto loans with one mailing, while reducing the cost per acquisition from previous campaigns by 37%.