July 23, 2012

Editor’s Note: This is Web-only bonus coverage from “Dynamic Data” in the August issue of Credit Union Management.

Of all the ways a credit union can communicate with members, mailing a letter remains among the most personal and effective—especially when the credit union claims postal in its name. Carolina Postal Credit Union sends a lot of letters to its members and relies on the Touché Analyzer business intelligence system from CUES Supplier member Harland Financial Solutions to make the right offers to the right members at the right time.

What started out as a “matrix mailing” to follow up regularly with new members has evolved to a broader member relationship management system generating personalized versions of 18 different letters based on demographic data and information about their relationship with the credit union, explains CUES member Deb McLean, VP/marketing and business development for the $81 million, 8,700-member credit union based in Charlotte, N.C.

As just a few examples:

• On their fifth anniversary of joining Carolina Postal CU, members receive a thank-you letter, along with information about additional products and services they might find useful.
• Teenagers get letters with tips about using their debit card wisely, starting off right to establish a solid credit history, or applying for their first auto loan—and their parents get a companion letter explaining what and why the credit union is communicating about managing their personal finances.
• Near each anniversary of joining the credit union, members with a single account receive reminders about other products and services that might save them time and/or money—and a gentle nudge that inactive accounts might be closed.
• Birthdays also provide an opportunity for the credit union to send a personal greeting, along with a personalized offer for products members don’t have but might find useful.
• These letters help introduce new services to a targeted membership, such as the recent launch of a mobile banking application.

McLean has worked with Mike Yozamp, senior business intelligence analyst at Harland Financial Solutions, through the years to design a direct mail system that promotes selected products and services to members most likely to be interested in them. In all, the credit union sends 700 to 1,500 letters a month, and the system is set up to communicate with as many members as possible without inundating any of them.

“It really does run itself, but we monitor it on a regular basis,” McLean says. “Every year, I go in and look at the type of letters, the wording, and the disclosures. And we make sure the look is updated regularly with a fresher design.”

One change Carolina Postal CU made several years ago was to add staff and directors to the mailings. Originally these “insiders” were excluded as a cost-savings measure, “but I want them to see what we’re doing in case they have suggestions,” McLean says. “And it keeps them aware that we do send out these letters and they might be getting calls or questions about them.”

Going ‘First Class’

Carolina Postal CU has also used the Touché Analyzer to identify its most profitable members, based on the range of products and services they hold, as the initial inductees into its First Class Club, launched in 2011. To be eligible, members must hold a checking account with direct deposit and a debit card, sign up for two e-services, have an auto loan and credit card or line of credit, and be enrolled in an automatic savings club (holiday, vacation, back to school, tax time, etc.).

First Class Club members can choose their reward: a quarter-point loan discount, up to $100 in internal fees refunded, free coin counting, a $25 Visa gift card, or a golf shirt with the First Class Club logo. The gift cards are the top choice, and the shirts have been popular as well.

The member data in Touché Analyzer helped the credit union select the optimal product mix for enrollment in the club and identify qualifying members, who are sent an annual letter of congratulations offering their rewards. “These are our most profitable members, and if they have all those services, they’re also among our most loyal,” McLean notes.

In addition to the 100 to 150 members already in the club, Touché Analyzer pinpoints members who are one product away from qualifying. These members receive regular mailings promoting the benefits of First Class Club status, and they may get reminders from account managers when they stop by a branch as well.

“The lynchpin of the product mix is the auto loan, and this is a great way to encourage members to finance their cars with us,” she says.  

In developing the First Class Club, the marketing department invited input from staff, who suggested adding the line of credit as an option for members who don’t have a credit card. “It was an easy sell to the staff, and they say it’s easy to promote,” McLean adds.

Carolina Postal CU also relies on the business intelligence system to create an annual executive summary and marketing analysis. The report details membership growth and retention, with a demographic and length of membership breakdown; product mix and profitability; census of single-account members; and, later this year for the first time, an overview of the First Class Club in terms of its demographics and impact on profitability, Yozamp explains.

The analysis also offers “product-specific information so you can see where you’re doing well in comparison with peers and where you might need to refocus some energy,” he notes.

The board and executive team appreciate the report because it’s “objective and factual,” McLean says. “It’s not a case of ‘Well, So-and-So told me that they’re doing this,’ and it’s not comparing us to a $1 billion credit union. It provides a strong basis for planning and identifying where we can best focus our efforts.”

In particular, the analysis of the credit union’s loan portfolio supports decision making about how heavily to promote mortgages and how to balance marketing for secured vs. unsecured loan products. It also aids in evaluating the return on marketing. For example, in 2011, the return on investment for the matrix mailing program was 140 percent. “Those letters paid for themselves and well beyond that,” she notes.

Harland Financial Solutions offers Touché Analyzer as an in-house or outsourced solution, and Carolina Postal uses the latter. “I don’t have it in house, and I don’t want it in house. I’m not a number cruncher,” McLean says. “Larger credit unions might have a person on staff dedicated to business intelligence analysis, but I just send Mike a data file at the end of the month and call him whenever I need something.”

Karen Bankston is a long-time contributor to Credit Union Management and writes about credit unions, membership growth, marketing, operations and technology. She is the proprietor of Precision Prose, Stoughton, Wis.