Article

Stealing Auto Loans

car illustration in a human hand
By Fiserv

4 minutes

CU triples loan offer response rate using multichannel digital marketing.

Sponsored by Fiserv 

Looking to grow its loan portfolio, a credit union with $1.2 billion in assets and 120,000 members wanted a solution that could improve results over traditional marketing methods. The credit union knew it could save members money but needed a better way to promote its low-rate auto loans. The CU found success and grew its loan portfolio with Next Multi-Channel Marketing from CUES Supplier member Fiserv, Brookfield, Wis., by presenting members with the right offers at the right time. 

Steal Campaign Success

The credit union wanted to go beyond a traditional auto loan campaign and decided to focus on an “auto steal” campaign. After purchasing trade line information to help identify members who had auto loans at other financial institutions, the CU segmented them into two groups. It targeted one group of over 3,800 members via direct mail. It targeted the other group of over 2,800 members via Next Multi-Channel Marketing through the credit union’s online banking and branch channels.

Next Multi-Channel Marketing uses various data sources for targeting to deliver targeted messages only to those members who qualify for an offer at the moment of interaction with a digital channel. For example, a member over 18 years of age who has a credit score greater than 675, is in good standing with the credit union, and does not currently have an auto loan with the credit union, would receive the targeted auto loan offer when they make contact with one of the credit union’s digital channels. This provides the right (targeted) offer, to the right (qualified for the offer) member via the right channel (where they are already engaged with the credit union) at right time. Another member who has a qualified checking account, is in good standing, but does not have the associated debit card for this account, would be offered the debit card upon interaction with a channel. The system leverages a credit union’s existing ATM, telephone, internet, mobile, email and in-branch channels to deliver highly-targeted and personalized messages to each member.

Results showed that members targeted via Next Multi-Channel Marketing responded and accepted auto loan offers at a higher rate than those targeted via direct mail. The Next-Multi-Channel Marketing group had a 12 percent response rate compared with 3 percent for the direct mail group. Nearly 10 percent of those targeted via Next Multi-Channel Marketing had loans funded as a result of the campaign, whereas less than 3 percent of the direct mail group was funded. 

A corresponding indicator of the success of using Next Multi-Channel Marketing is in the total loan dollars resulting from the campaign. The total funded was significantly higher for the group targeted via Next Multi-Channel Marketing than for those targeted via direct mail. The credit union funded more than $5 million in loans in the Next Multi-Channel Marketing group compared with just over $2 million in the direct mail group—so although the group that received offers via Next Multi-Channel Marketing was smaller than the direct mail group by nearly 1,000 members, total funded loans via the Next Multi-Channel Marketing group surpassed those of the direct mail group by more than $3 million. 

Leveraging Next Multi-Channel Marketing for Additional Loan Growth

The results of the auto loan steal campaign were so positive that the credit union rolled out additional campaigns using Next Multi-Marketing and again saw much better results than the traditional campaign average. 

The CU deployed a campaign for home equity loans via Next Multi-Channel Marketing that produced a take rate of 3.74 percent versus the average take rate of 1.69 percent. 

A similar campaign deployed to increase indirect auto loans reached a take rate of 8.14 percent from offers members received through Next-Multi-Channel Marketing channels, a significant improvement over the average take rate of 1.77 percent. 

Improved Results and Cost Savings

Results from the auto steal and other loan campaigns using Next Multi-Channel Marketing not only were stronger but also were more efficient and less costly for the credit union than traditional marketing campaign methods. Unlike with direct mail or statement insert offers, the CU incurs no delivery expenses for targeted messages delivered via Next Multi-Channel Marketing. In addition, it is not limited in the number of concurrent offers it can deliver and it does not have to consider cost per piece as it would with direct mail or similar methods. 

Because of the efficiencies of digital targeted marketing via Next Multi-Channel Marketing, credit union users report that they can reach almost all of their membership every eight to 10 days using the solution. In contrast, traditional marketing methods might go to a subset of members only monthly or quarterly.

Fiserv logoFor more information on Next Multi-Channel Marketing, call 800.872.7882, email getsolutions@fiserv.com or visit www.fiserv.com .

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