Optimize Credit Card Marketing

Editor’s Note: This is Web-only bonus coverage from “Optimizing Opportunity” in the August 2014 issue of CU Management.

Credit cards are among a credit union’s top-yielding assets, with net earnings in the 2.5 to 4 percent range, “well in excess of other loans over the last several years,” says Barney Moore, manager/portfolio consulting services at CUES Supplier member Card Services for Credit Unions, Tampa, Fla.

As intense as the competition is for members’ credit card business, credit unions can typically offer the key benefits of lower rates and fees and better terms. Moore offers these additional recommendations to optimize credit card marketing:

1. Develop a compelling offer and campaign theme and then use every available channel to promote it. Credit card promotions merit prominent positions online, and personalized direct mail offers are especially effective if the offer is appealing, Moore says.
    
2. Coordinate with operations, accounting, lending, and the card department to ensure smooth sailing for members responding to the offer, from application through activation and balance transfers.
    
3. Offer a rewards card for more affluent members to level the playing field with big bank card offers and a rate card for members likely to carry a balance.
    
4. Emphasize cross-selling credit cards at closings for car loans and mortgages “because you’ve already done the work of underwriting those loans.”
    
5. Encourage employees to carry your cards so they can speak with firsthand knowledge about the benefits.
    
6. Track and analyze product penetration, portfolio balance, average balance per account, spend per card, number of times used, average credit line and percent of line utilized.
    
7. Monitor campaign responses, and develop ways to flag new accounts based on how members responded to the campaign, and evaluate how members use their new accounts. Is there a connection between marketing medium and level of card usage?
    
8. Manage credit limit increases and balance transfer offers. “If appropriate, increase limits before you launch a balance transfer offer” instead of risking frustrating members who are near their balance limits, Moore suggests.

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

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