New Strategies for Onboarding New Members (Recorded Webinar Slides)
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New Strategies for On-boarding Your New Members First impressions last forever–and drive growth!
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So you signed up a new member. Now what? How, when, and what you communicate in the early stages of this new relationship will set the stage for your ability to grow and retain that account. Technology and consumer preferences are constantly changing the communication landscape. To stay ahead, you must look differently at the way you attract and retain your members. In this webinar, we'll examine the challenges credit unions are facing, and then explore new strategies for the onboarding process. For more info: www.nafcu.org/cathedral
Transcript of New Strategies for Onboarding New Members (Recorded Webinar Slides)
New Strategies for On-boarding Your New
Members
First impressions last forever–and drive growth!
SETTING UP THE STAGE
It’s Time to Look at Things Differently
• The types of members currently recruited.
• Current member acquisition costs.
• Attrition rates and the way new members are on-
boarded.
• The way member communications are used to
cross sell and create loyalty.
• Use of multichannel collaborative efforts.
The Impact
A 5% increase in money-losing
members will
reduce Net Income by 37%.
Source: http://bankblog.optirate.com/bank-and-credit-union-business-strategy-and-customer-life-time-
value/#ixzz1yqZpy2Md
The Alternative
Growing profitable member segments
by just 5% will cause Net Income to
spike by nearly 40%.
Source: http://bankblog.optirate.com/bank-and-credit-union-business-strategy-and-customer-life-time-
value/#ixzz1yqZpy2Md
Cost to Acquire
Acquisition costs per member typically
exceed $350
and with additional incentives
can increase to as much as $500.
Source: http://bankblog.optirate.com/is-gen-y-a-profitable-customer/#ixzz1lAwCTfBn
Lifetime Value
The average tenure of a member at a Credit
Union is roughly 7 years.
• Not long enough to recover the
accumulated operating losses.
Source: http://bankblog.optirate.com/is-gen-y-a-profitable-customer/#ixzz1lAwCTfBn
What’s your best cost estimate
to acquire a new member?
The Real Story
• Data suggests that more than 90% of
institutions under-estimate true
Customer Acquisition Costs.
• Credit Unions continue to engage in
member acquisition marketing campaigns
that generate operating losses.
Source: Andera
Finding Profitable Members
• While creating awareness, mass media
does not let you target high potential
members.
• Finding and adding more unprofitable
members has a negative impact on the
institution’s health.
The Big Question
What percent of your members are
most profitable?
The Real Value of Members
Source: Bank and Credit Union Business Strategy and Customer Life Time Value, September 2011
A Bigger Question!
Why spend $500 to recruit
a new member
with a high probability of attrition
and potential lifetime
value of $140?
Attrition Statistics
Annual Account Openings
Account Attrition 35%
Financial Loss Year One1
10,000 3,500 $1,400,000
25,000 8,750 $3,500,000
100,000 35,000 $14,000,000
1 Assuming $200 to replace account and $200 in
lost revenue – A Case for Onboarding, Jim Marous
Source: Bank Marketing News
Changing the Game
Annual Account
Openings
Account Attrition
35%
Financial Loss Year One1
Saves with Onboarding
20%2
Financial Gain Year One
10,000 3,500 $1,400,000 700 $280,000
25,000 8,750 $3,500,000 1,750 $700,000
100,000 35,000 $14,000,000 7,000 $2,800,000
1 Assuming $200 to replace account and $200 in lost revenue – A Case for Onboarding, Jim Marous 2 “Consistent customer communication begins with a comprehensive onboarding strategy, which can
reduce new-customer attrition by as much as 50%.” – Peppers & Rogers Group
Source: Bank Marketing News
Do Something Different
• Communicate with your new members
• Show them that you care
• Be there for them
• Retain new members by building real value:
• Additional product revenue
• Member satisfaction
• Loyalty
LIGHTS,
CAMERA…
ACTION!
Onboarding
1 1
Your Credit Union
1
6/20/13
On-boarding Success
Communicate now!
• Relevance
• Channel
• Frequency
• Cross Sell
• Close Loop Marketing
• Track and measure
Discover Your Relevance
Discover the reasons to communicate
with a new member:
• Primary financial goals
• Preferred channel of communication
• What type of accounts they hold
elsewhere
• Future communications and product offers
And Also Fight Attrition
62% of customer defections
can be modified
if discovered in advance.
Source: SearchCRM, "Model modelers in predictive churn," By Michael Lowenstein. June 2002.
Check the following activities that
you use to onboard a new member:
- Telephone follow up
- Personal letter
- Survey
- Postcards
Channel Importance
Right Message-Right Channel- Right Time
What Keeps You From…
Communication Strategies
• Data Modeling
• Segmentation
• Targeting
Studies show that email follow-up to a direct mail campaign can enhance results by
as much as 30 percent. Javelin Strategy & Research,
“New Account Onboarding Communication” (2007)
Frequency
“The first 90 days
is crucial for
making or breaking
a new member relationship” Kevin Roland
FedChoice FCU
Lanham, MD
Touch
Campaign Week Cycle Month Activity Purpose Note Response Trigger
1 week 1 (7) 1 CEO Letter Appreciation Welcome and thank you for joining PURL- with a reward offer or premium
2 week 2 (14) 1 Branch Letter Appreciation
Thank you! Meet our team and a listing of all available products variably driven by products that the member already has.
PURL- with a copy of their newsletter or convenience coupons. If no response was recorded from Touch 1, present again the offer.
3 week 3 (21) 1 Email w/Offer Offer
We are here for you…appreciate your business…product offer
Content Page-with offer base on entry. Include a form as response mechanism.
4 week 4 (28) 1 Postcard w/Offer Offer Determined by the client PURL- with a reward offer or premium
5 week 6 (42) 2 Email w/Fin Info Financial Literacy
Offer as determined by earlier response
Web Page-with offer base on entry. Include a form as response mechanism.
6 week 8 (56) 2 Postcard w/Offer Offer
Offer as determined by earlier response PURL- with a reward offer or premium
7 week 10 (70) 3 Email w/Survey Appreciation
New Member Survey: List of product and services and measurement of customer service Web Page-with survey form
8 week 12 (84) 3 Postcard w/Fin Info Financial Literacy
Offer as determined by earlier response PURL- schedule a branch visit
The first 90 days…
Cross Sell Opportunity Response to Cross Sell Efforts
Source: BAI, The Ninety Day Opportunity
Make it “sticky”
Reduce Attrition & Cross Sell
• You have a 50/50 chance of keeping a member
who has only a savings account with your credit
union active in the first year, but… • 10 times more likely to keep a member who has both a
checking account and a savings account.
• 18 times more likely to keep a member who has a checking
account, a savings account and an installment loan.
• 100 times more likely to keep a member who has a checking
account, a savings account, an installment loan and a safe
deposit box.
Source: Effective cross-selling: How to build revenue
https://www.cuany.org/access_files/.../ConnectionMarch12.pdf
A Big Question
Check the top three products that you
would offer in an on-boarding program?
The more you know…
Static Personalized Highly Relevant
10x lift Right Time
Learning
Response Rate
20x lift
20% lift
5x lift Right Message
2x lift Right Individual
Source: Caslon & Company
Closed Loop Marketing
Data
Messaging/Channels
Trackable Response
Nurture Activities
Revenue
Best Practices
Capture Information
Proof Point
• A $1.6 billion credit union in Texas developed a monthly
campaign based on next product potential, value score
segments and P$ycle codes.
• Incorporated the ability to track response and areas of
interest.
• Integrated hand off to sales.
• Results:
• Loans and deposits of targeted members improved by 50% in
first five months.
• The personal loan initiative alone generated $2.5 million in new
loans, with a 534% ROI.
Source: Credit Union Business, The Lending Issue, Cross-Selling: 1 + 1 = 3 By Tony Rizzo July 2011
“Process” Not a “Program”
• Attract by knowing your members
• Relate by on-boarding
• Retain with effective cross-selling
• Engage in regular communication
• Reduce attrition and revenue loss
• Grow membership life time value
ENCORE!
What Is Required to Realize
this Opportunity?
• Relevance audit of existing acquisition strategies
• Identification of top 10% of profitable members
• Analysis of current member data to determine key
opportunity areas
• Set realistic goals for return
• Execute, review, modify and analyze
• Repeat
Steve Miller Dir., Financial Services Communications
800-514-0546
Thank You!
Maria Del Amo Dir. New Market Development
877-451-2463
NAFCU Annual Conference Uncover the Secret Within: Using
Member Data to Strengthen Your
Bottom Line o Data mining
o Member Segmentation
o Targeted Multichannel
Wednesday, July 10th, 2013 @ 2PM
