Elevations Credit Union (ECU), a six-branch credit union and the fourth largest in Colorado, wanted to reduce member attrition and increase member participation through the adoption of key products. Competition is strong in its market area, mostly from banks.
ECU leveraged Harland Clarke's StraticsTM, an analytical suite of products, to segment and target existing members for several key credit union products, including checking accounts, money market accounts, certificates of deposit, credit cards, home equity lines, and auto loans. Members were targeted first on their likelihood to attrite and then on how likely they would be to respond to the products that ECU was promoting. ECU took a multi-channel campaign approach and used e-mail and direct mail to promote the various offers to its targeted members based on the Stratics propensity score.
Overall, the client received excellent response rates on the series of campaigns-a direct response rate of 3.42% and an indirect response rate of 8.82%. Furthermore, the principal goal of reducing member attrition was also achieved. While the credit union's percentage of profitable households decreased during the campaign and measurement periods, the profitability of the targeted segments actually increased. In addition, the six month attrition ratio for the target audience was reduced by 38% to 5.16%, compared with a 7.13% rate of attrition for ECU's broader membership base.
The overall high response rates illustrate an important point. Members that are likely to leave are also likely to respond, but unfortunately those members will also respond to a competitor's "acquisition-focused" offers. If financial institutions as marketers will communicate and make offers to existing members, they will see higher response rates and lower attrition. The key is to communicate the right product offer with members most likely to adopt that offer, in a very personalized and simple way-similar to the one taken by ECU.
In total, the campaign generated $5.4 million in deposit balances and $0.2 million in loan balances for ECU. The credit union not only achieved its goal of reducing member attrition and increasing member participation, but it also received greater exposure of its brand position through direct and e-mail marketing.
"Member retention is a critical objective for ECU. We are
very impressed with the campaign results and attribute this success
to the modeling provided by Harland Clarke. We consider StraticsTM a
key component for all of our direct marketing campaigns."
Rich Jones, VP Marketing, Elevations Credit Union
For more information on how Harland Clarke can help your financial institution reduce attrition with marketing analytics, call Michael Bryant, Director of Analytics, at 770-593-5158 or firstname.lastname@example.org.