As all signs are pointing toward pandemic life finally turning a corner, job loss, financial stress, and uncertainty are still common among consumers – and their priorities and needs continue to change. A recent survey shows that a significant number of people have taken drastic measures to manage their finances since the onset of the pandemic, with 14% of respondents draining their emergency funds and 17% tapping into them. For many, their financial future is still full of questions. But that’s where you can come in. With the right approach, credit unions are already positioned to help!
By now we have all figured out that this “new normal” is here to stay – at least parts of it, anyway. And those institutions that are reimagining how to better understand and communicate with members when so many have changed have already taken the right first steps. Working with your members and how they want to hear from you – and bank with you – will help them overcome the hardships of the past year and find solid financial footing in 2021 and the years to come.
Relevancy is Key
Before the pandemic, remaining relevant with your members was fairly straightforward: Provide consumers with simplified banking solutions, a few personalized product recommendations, and a promotion or two. Now, with fewer ways to connect and an uptick in virtual communication methods, it can be a challenge to provide the personalized support that members need.
A recent global survey by Bain found that anywhere from a quarter to half of all banking purchases go to organizations other than the customer’s primary financial institution — with U.S. banks and credit unions experiencing 40% of this hidden defection. But when further questioned, 78% of these consumers who went with another institution due to a competitive offer reported that they would have stayed with their primary financial institutions if they’d received a similar promotion.
So how can you stay ahead of your competition and support your members right when they need it?
Create a complete view of each member
We all know that you have mountains of data about each member – their demographics, products, and transactions, to name a few. But it’s important to break down the silos so you REALLY know the full picture of each member’s relationship with your institution, augment that with additional data – and then act! For example – you may find that a segment of your member base have auto loans that are close to maturing – and when you augment your data they are flagged as having the propensity to purchase a new car in the next 6 months. Now is the right time to get in touch with them (through their preferred channels) with a new auto loan offer. Building a program that keeps that data fresh and actionable in real time means you will be there for your members BEFORE the competition even has a chance.
Break out of your comfort zone
While it may seem like a lifetime ago, it wasn’t too long ago that we were focused on quarterly marketing calendars that were defined a year in advance – and didn’t really change from year to year. 2020 definitely changed that – and it’s time to use the lessons of last year in new ways. We all learned to be nimble in ways we never anticipated – with lobbies closed and members unable to step into your branch, it was a necessity!
That nimble mindset – and knowing that time doesn’t stand still – provides you with a leg up on other institutions that may be slow to change. An example: a credit union in Maryland launched a campaign just prior to the pandemic targeting members who were not using direct deposit and incenting them to initiate it. The campaign ran through April 2020 – and when it completed they found that the members who initiated direct deposit also increased their average daily balances by 62%, and increased their POS transaction spending by 52%. While many institutions stopped marketing for a period, this CU’s members continued to live their lives and expanded their relationship with them.
Segment and target members who are becoming disengaged
How can you combat the hidden defection when there are seemingly no signs pointing to your members looking elsewhere? The truth is that there ARE signs – if you know where to look. Define what a disengaged member looks like for your credit union and create an ongoing program that flags and targets those members quickly. If a member was consistently using Bill Pay that suddenly stops – reach out to them with a message to find out why and get them back up and running. Or a member consistently used their debit card for POS transactions that slows, contact them with a different message. And if they have a number of indicators that the relationship might be going somewhere else – don’t hesitate!