Understanding your members’ behavior gives you the opportunity to serve them effectively, and in turn, increases your bottom line. Unfortunately, it is not uncommon for credit unions to overlook existing cardholders as a significant opportunity to help stimulate portfolio growth and increase profitability. With the use of data, you can identify trends that will help you to ensure that you are offering the right incentives, rewards, and services that will not only retain your existing cardholders, but also attract new prospects.
What can data do for you?
Data can open the door to product and service opportunities that your credit union did not offer in the past. Also, by utilizing data from your card portfolios, as well as home and auto loan applications, you will have a vivid picture of each member that will help you to create unique member experiences. In the end, you can feel confident that you are offering a competitive card product and doing what is required to stay “top of wallet.” With rich data you can:
- Offer Your Best Members the Best Rates – Review cardholder data annually and implement a risk-based strategy to offer your members better rates based on their profile.
- Conduct Regular Credit Line Increase Programs– By rewarding your existing cardholders with the limit they have earned, based on their card history, you will reduce voluntary attrition. Conducting targeted credit line increases gives them more purchasing power and enhances cardholder loyalty.
- Offer Product Upgrades –Whether it’s moving a cardholder up from a student card, or graduating from a Platinum to Signature card, don’t wait for members to approach you, use the data you have to target them before they go elsewhere.
- Offer Targeted Rewards – A rewards program is necessary to remain competitive in today’s market, and understanding who your most valuable members are is essential in implementing this program. The requisite information relies heavily on data. Members with rewards typically boost your portfolio 11.2 times more on average per month.
- Provide “Spend and Get” Incentives – Drive your existing cardholder’s volume and usage up by providing them added incentive occasionally to use your credit union branded card. For example, you could offer your cardholders double the ScoreCard points for the month of September to encourage increased back to school shopping on your credit card. Try Double Bonus Points on Merchant Category Code promotions to get members using your card for more substantial dollar amounts and use data analytics to review the results and tweak the program.
- Implement Relationship Pricing – You can build loyalty with your existing cardholders easily by offering lower rates for those members who maintain a multiple product relationship with your credit union. Use data to determine membership value.
- Encourage Recurring Payments – Encourage your existing cardholders to set up recurring payments using your credit card. Today, it’s not uncommon for your cardholders to use their credit card to pay for utilities, memberships, internet services, or insurance premiums. Use relationship pricing to build loyalty. For example, offer them a lower rate if they make five recurring payments per month using your card.
- Offer Balance Transfer Promotions – Balance transfers can help your credit union stimulate growth. Extending this offer to new and existing cardholders is crucial. If you don’t, your competition will, and you risk losing your existing cardholders’ balances. If you don’t already, add a balance transfer rate to the standard card application. Also, providing no fee balance transfers will differentiate you from bigger financial institutions who are offering 3% - 6% transfer fees.
Data makes these and other strategies possible to keep your existing cardholders happy and satisfied with their credit card relationship. You can improve your member experience by harnessing the data you have. For help in executing these strategies, visit www.trellance.com/growth or contact us, and we’ll be happy to help.