By Guest Contributor Anne Legg, Data Strategist and Owner of THRIVE™
Most credit unions desire a member data future state that looks something like this. An incredibly powerful, super-charged recommendation engine. One that is continuously fueled by diverse sources of member data and churning out a variety of financial life recommendations.
While this is the ultimate destination, small steps can be taken today. A simple project is to understand current member spend in the categories of gas and groceries. Why these two retailers? Because, these two simple purchase data points provide volumes of insight about your members. For example, identifying where members shop for food, i.e., convenience store, or fast casual dining or specialized organic grocery, this purchase behavior, segmented by age, product usage and zip code will provide indicators of other spending habits, such as overall spend. The depth of the purchase behavior is strengthened by adding gas retailers into the analysis. Gas is a fascinating data point as it shows proximity to work or home as well as pricing threshold of value.
Through this segmentation of members by value sensitivity, many trends can begin to emerge. Members who show value-priced indicators may be more likely to respond to promotions that offer payment versus rate. They may be more likely to use budgeting software and would like to know how much they have saved in fees because they bank at the credit union, not someplace else.
Another valuable insight gleaned from gas and grocery data is the potential for credit/debit card acquisition and increased usage from existing cardholders. With the knowledge of most used retailers, the credit union can offer a rewards program that can be tailored to member segments, delivering for a nearly individualized custom rewards program. While members will delight in earning points for existing behavior, this will also help secure the coveted top of wallet position, and spur increased cross-sell and up-sell opportunities. In re-acquisition efforts, identifying current competition allows for nearly individually crafted messages. A robust competitive proof point is the savings the member can achieve by moving spend behavior from a competing card to the credit union.
Leveraging data in these incremental efforts can improve the member’s financial condition and allow the credit union bottom line. A mid-size credit union located in the pacific northwest generated $1.7 million in new loan balances in six months!
>>>Interested in learning more on this topic? Check out our whitepaper “Who is in Your Member’s Wallet?”
About the Author
Anne Legg is the founder, and principal of THRIVE™ Strategic Services. THRIVE™ works with credit unions to create revolutionary member relationships via organizational education, member-centric data strategies, and data maturity.
She is a recognized credit union business strategist, presenter author, educator with an MBA thesis on the credit union business model as well as two internationally published whitepapers on credit union business strategy. She has delivered over 100 onsite sessions to over 600 credit union senior leaders across the united states, launching their data journeys.
Anne is author of Big Data/Big Climb, the industry’s only playbook on data transformation. And she taught at the CUNA Marketing School and has acted as the subject matter expert for CUNA’s Credit Union marketing curriculum. She has also been an author to CUNA’s Environmental Scan, The Credit Union industry’s leading strategic planning guide. She has also served on various Credit Union Boards, including; CUNA’s Marketing and Business Development Executive Council, MAC, and the California and Nevada Credit Union League Public Advocacy Committee.