Think Inside the Box

Mobile apps? Check. Online banking site designed for mobile access? Check. Text alert options? Check. ATM/branch locator? Check. Remote deposit capture? Check. Avenue to send marketing offers to mobile users? Ummm…

Many credit unions have heard and heeded the message that their members increasingly equate convenience with mobile access. But as they embrace this new channel, members may also be bypassing your main marketing and sales platforms, from branch and Internet banners to front-line and call center cross-selling.

Strategies to close this marketing gap range from text/email messaging to specially designed “mobile marketing apps” to a wider view of forging new relationships with members as their chief mobile payments provider.

First Things First

Molly Dawson, vice president of Data Based Marketing, San Luis Obispo, Calif., offers this exercise: Imagine that your website opens with a screen displaying only sign-in boxes for online banking. That’s all that most “mobile-dominant members” see when they interact with your credit union via their favorite channel.

In their relatively short life span, apps have been developed with an emphasis on simplicity and functionality, but Dawson suggests marketers need to make the case that these applications “must connect people to their mobile banking systems—but they can also market and sell.”

The first thing members of 1st United Services Credit Union see when they tap their mobile app are three rotating messages with special offers for no-interest Visa purchases and low-rate auto loans, for example.

“At the bottom of each banner, there’s a way for members to act on the offer—to view rates, to apply, or to go directly to their accounts,” says Steven Page, online product marketing manager for the $800 million Pleasanton, Calif., credit union.

In the two years since 1st United Services CU introduced its marketing-enabled mobile access, 7,000 members have downloaded the Apple or Android apps and one-fifth of its 50,000 members use some form of mobile access, including text alerts and sign-on through the Web page designed for small screens. The credit union is now developing tablet apps as well.

Marketers monitor click-through rates from the mobile banners, but Page suggests that the steady increase in members adopting mobile access and the time they spend managing their accounts while signed on through their phones or tablets underscores the need to market through the remote channel as well.

The average time members spend logged into online banking through the apps is just a little over three minutes and growing monthly, Page says. “When you compare that to less than 2.5 minutes on the normal website, you see that mobile is where it is at for us.”

The marketing mobile apps, designed by Data Based Marketing, actually provide seamless access to three separate applications—online banking, remote deposit capture, and person-to-person payments. (The Data Based Marketing app can be set up to access a CU’s existing mobile banking product or existing home banking system.)

Service for members who are calling their credit union (on any kind of phone) rather than signing on is supported by Fonolo, a call recovery system that offers an automatic callback after members are on hold for 30 seconds.

“We’re also developing a live chat for mobile users and working toward video conferencing for members who want to apply for a car loan from the dealer lot, for instance,” Page says.

1st United Services CU recently discontinued its deposit at home via mail service, instead migrating members to remote deposit capture.

Page credits messaging across all channels—through the apps, email, an online video, and reminders from front-line staff—for the smooth transition and successful delivery of the message that many members (based on credit score and account status) would enjoy the simple process and near-immediate credit to their accounts for remote deposits. “We didn’t get any complaints,” he says.

The CU is working toward responsive Web design of its Internet services, so that as members sign on from an increasing array of mobile devices, they will have a consistent online experience.

“If credit unions have over 50 percent of their core users looking at their website on a mobile device, they better get on the train quick and get a mobile app,” Page suggests. “It’s easier for you and your members, and they’ll love the convenience. Our app includes one-touch button access if they want to contact us at any time.”

For its most adept mobile members, 1st United Services CU carries over remote access even to its branches by including QR codes on posters in its lobbies.

Over the holidays, for example, branch posters conveyed the CU’s support for local food banks and encouraged members to do the same, with information supplied through the QR links on how to contribute.

“It’s all about convenience and how immediately you can get information to members,” Page notes. “We don’t have a huge group who use QR, but our younger members like it.”

The credit union is also experimenting with push notifications through text messages as an additional marketing connection for members who opt in.

When asked about the ROI of mobile marketing efforts, Page responds, “What’s the ROI of answering your phone? These are all channels we have to have to provide excellent service to members, especially Gen Y, so we’re not so worried about quantifying the return.”

Designing On-the-Go Communications

A “marketing-centric app” like the ones maintained by 1st United Services CU can be provided as an alternative or in addition to existing apps, Dawson notes.

In addition to rotating marketing offers, these apps can be designed to connect members to their credit union in familiar ways—by linking them to the credit union’s Facebook and Twitter feeds, to quick updates on daily rates and other news, and to handy references such as the routing number or quick financial calculators.

Alongside these marketing apps, credit unions can give members the choice to opt in or out of “push notifications” that send messages to their devices whether they’re signed on through the app or not.

The iOS protocol for iPhone apps allows users to stop or start push notifications; although the requirements for Android apps offered through Google Play are less restrictive, using the same protocol is recommended, she explains.

The benefit to members of receiving these notifications is the opportunity to receive offers for short, deep discounts, like: “Finance your auto loans with XYZ Credit Union this weekend and receive $100,” or “Use your Visa card on Black Friday and receive 5X rewards points.”

Dawson recommends that credit unions move to responsive Web design in acknowledgement of the reality that more people now access the Internet from a mobile device than from a PC.

“All websites need be responsive. If not, credit unions are likely to lose market due to the frustration of navigating a non-mobile website on a small screen,” she says. “Smartphones are only part of the story. Tablets are becoming more dominant every day.”

Designing separate apps for smartphones and tablets can help account for both differing display sizes and calls to action. For example, a loan promotion via a phone app might not connect to an online loan application, which would be too cumbersome to complete on a small screen, but a tablet app could take members directly to applications and other forms.

Tablet app design should also recognize that these devices are used differently than smartphones, Dawson says.

The difference between a phone app and a tablet app is in the breadth of content—it shouldn’t be just a larger version of your mobile phone app.

“People sit on their couch with their tablet and surf the Internet. It’s basically replaced the PC,” she notes.

Smartphones and tablets also double as many members’ preferred email boxes, but again, the way people use these devices should guide how marketers communicate.

First and foremost, Dawson advises, keep it short. “According to Constant Contact, the average email reader spends less than one minute on the message—52 seconds to be exact,” she notes.

Another recommendation is to display plain text in addition to images to ensure the message can be easily read.

If an offer is embedded in an email image, more than one-third of the recipients will not see it, she cautions. According to Constant Contact, nearly 40 percent of recipients have “download images” turned off in their email program.

All-for-One Approach

One Nevada Credit Union employs a cross-channel strategy for suggesting the next best product members are likely to want based on their existing financial footprint. Using Next Multi-Channel Marketing from CUES Supplier member Fiserv, Brookfield, Wis., the $683 million credit union based in Las Vegas makes these personalized offers to its 75,000 members whether they are signing online, stopping by a branch, using an ATM, or tapping their mobile app.

“Based on how they’re using our credit union now, the Next application basically follows them to their preferred channel,” says Paul Parrish, EVP/chief financial officer of One Nevada CU. “We introduced these offers through our mobile access fairly recently, but through our other delivery systems, it’s proven to be a very effective marketing vehicle.

“The mobile channel for NEXT is a bit too new to rate in terms of comparable response rates so we don’t have any numbers at this point,” he adds. “We anticipate similar, but not quite as good, results when compared to online banking.

“We think that the mobile users will probably be a bit more ‘hurried’ than they would be just sitting at home on the PC. But we still expect mobile to be an efficient and effective marketing channel for us as we move along,” Parrish explains.

One Nevada CU has developed an automated delivery system its members have embraced, and “mobile is a tool within that strategy that’s becoming increasingly popular,” Parrish says. Online access via its mobile channel has helped push home banking penetration to 90 percent.

A Wider View of Members’ Finances

Mobile banking apps aren’t the only financial software available for smartphones—or the only potential for mobile marketing.

At the FinovateSpring 2013 conference, MoneyDesktop, Provo, Utah, won a best of show award for its analytic and customized marketing components (called Insight and Target) that take advantage of the account information aggregated from different financial institutions into its personal financial management tool.

Several credit unions have tested the system, set for a 2014 rollout, which is designed to personalize offers based on this fuller view of members’ financial accounts.

Bret Skousen, EVP/marketing and PR for MoneyDesktop, offers this example: A credit union offering the PFM system to its members could send a credit card offer to selected members in a certain credit score range who hold Chase cards at specified interest rates. Based on information members have entered about their accounts and what has been aggregated from other financial institutions, “we know what they’re paying, what the rate is and what the term is, and what they qualify for,” Skousen notes. “The system is smart enough to serve them a very contextual offer—‘You’ll save $66 a month’—so personalized that they’ll be thankful for the offer rather than annoyed.”

Participating credit unions don’t have direct access to information about members’ accounts with other financial institutions, but they can supply specific parameters to design the offer and qualifications for it.

Initial testing was focused on developing offers for credit cards, auto loans, and mortgages, but there are “a lot of different ways to slice and dice data, and we’ll be adding new options,” he says.

These offers may be sent via banners within the PFM app or online banking site or by email or text messages for members who’ve opted in or not out, depending on how the credit union has set up the permissions process.

As with other forms of mobile marketing, the PFM app and accompanying offers may appeal to a wide range of members, Skousen suggests.

The appeal to younger members is widely accepted, but boomers at or near retirement age are connecting via their iPads and smartphones so they can keep tabs with their kids on Facebook and manage their finances as they travel.

The analytics behind this system may be complex, but the marketing messages work best when they’re simple and direct, he adds. “With mobile, you’ve got to get straight to it. As marketers, we’re always having to relearn, and new mobile channels heighten that challenge.”

Emergence of Mobile Payments

Beyond using mobile to promote their credit unions’ products and services, marketers should be thinking about how this new channel combines a data-driven portrait of members’ spending and consumer preferences with a ready means of sending personalized offers that could help credit unions position themselves near the center of their members’ financial lives, suggests Paul Fiore, CEO of CU Wallet.

Connecting with members via the mobile device of their choice can deliver value and convenience through carefully tailored offers. Consider these examples:

• While dining out, you use your debit card to pay the tab. The credit union knows you’re out and about and texts you a quick message offering reduced price tickets at a movie theater just down the street from the restaurant.
• You were glad to have a new SUV (financed through your credit union, of course) to navigate through the snowiest winter on record. Now that the snow has finally melted, you’re running errands on a sunny Saturday when you get a text alert for a special at a nearby carwash.
• The day after you submit a change of address to your credit union, you get a text message: “Welcome to Oklahoma City. We thought you’d like to know that your new address is close to this food co-op and this pharmacy.” Over the next few weeks, you continue to get suggestions—and welcoming offers—from local merchants that reflect past purchases: a free cart rental from a popular golf course, a discount on an eye exam, and a two-for-one dinner at a Greek restaurant in your new neighborhood.

“This is all about reaching a specific audience where they are, directing the message individually, and measuring results,” Fiore says. “Mobile becomes the most effective way to do that, and if you do it right, it doesn’t feel like spam.”

This is especially true when members have options to opt in or out of receiving these types of offers, to respond with a “not right now,” and to choose the categories of offers they’d like to receive.

Mobile Payments

CU Wallet is developing virtual wallet and mobile payment solutions for credit unions as an alternative to Google Wallet and PayPal, looking to aggregate the buying power of members to develop mobile payment systems with merchants.

“If we were working from scratch, we wouldn’t use plastic cards to make payments,” Fiore contends. “People are already carrying these devices around” with the capabilities to make payments via QR code or near field communication stations.

One Nevada CU will be among the first credit unions to launch mobile payments with a pilot of CU Wallet’s QR-based system developed by Paydiant. In this initial test, expected to begin this spring, members will be able to pay for their Subway sandwiches with their smartphones.

Merchants will determine the speed with which mobile payments are adopted, Parrish says. “The technology is there to get mobile commerce going from start to finish, but different factions in financial services are working on different solutions, and merchants are watching and deciding which way they want to go.

“Once they start to move, we’re going to have to be there because it’s going to ramp up pretty quick.”

Credit unions need to get involved in mobile payments to protect their member relationships, Parrish cautions.

“Google Wallet and PayPal may not seem too threatening right now, but their ultimate objective is to get between members and merchants and parlay purchase data from those transactions into a revenue stream. Members are going to be peppered with offers from other financial service providers, and that’s going to chip away at their loyalty to their credit unions.”

Mobile payment solutions can help credit unions maintain their member ties and forge new partnerships with merchants looking to develop location-based marketing, he suggests. “And that’s why we’re on the front edge of this fray.”

As this new payment form begins to emerge, Fiore says credit unions should be studying how to establish themselves as members’ primary mobile financial provider by providing convenient services like remote deposit capture, P2P payments, and PFM apps. And they should look for opportunities for innovative marketing offers, like approving auto loans when members transmit the image of the VIN and sticker price of their favorite car on the lot.

By steadily improving their mobile marketing efforts, credit unions build on an advantage they have on even an Internet giant like Google, which must rely on data about purchase intentions to transmit offers. If Google had the same information that credit unions have about members’ credit and debit card purchases, “they’d be even bigger than they are today,” Fiore says.

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.