It can be hard to bring in new members to credit unions. And the reality is, that difficulty can be measured in dollars. Member acquisition costs can add up quickly.
So, it’s critical to keep new members once you get them. Unfortunately, there’s no secret formula to reducing new member churn.
Or is there?
What Does a New Member Cost?
Credit unions usually spend around $400 to acquire new members, but that number can balloon to around $700. That means that bringing in new members can get expensive, and fast.
New member churn is usually around 25% in the first year. That number goes down in the second year, but not by as much as you’d hope.
All in all, 40% of new members leave their credit union before they become profitable.
Now, what’s it worth to reduce new member churn?
How to Reduce New Member Churn
You’re not going to profit off of new members who open up a checking account, put $50 in, and let it sit. Getting them further engaged is key. If you get them set up with a savings account, a credit card, and let them know you’re there when they need a loan.
It’s a lot easier to leave a credit union if all you have is a dormant checking account. Once they’re better engaged, they’re more likely to stay. That’s why new members churn faster than old ones.
So, how can you reduce this churn?
Better onboarding.
Let’s look at how you can make this happen.
Building a Better Onboarding Strategy
New members will probably open more emails from you than they will after they’ve been around for a couple years. They won’t want to miss anything regarding their new account(s) and membership. That makes them great targets for an email onboarding campaign.
As new members settle in, start a nurturing sequence around onboarding. Send them offers, options, and invitations to increase their engagement.
For example, after they’ve set up a checking account, send a few emails:
- Invite them to open a savings account
- Send them relevant credit card offers
- Introduce them to your online and mobile banking platforms
Additionally, you might suggest other ways to make your job—and their lives—easier. Get them set up with e-statements and other communications. Tell them about your partnerships and discounts at local businesses. Let them know where they can find branches and ATMs.
Basically, give them the tools and information they need to be more engaged members. Be their best resource and their trusted guide.
Final Thoughts
A strong onboarding campaign will increase member engagement. In turn, that will reduce new member churn. This directly impacts your credit union’s profitability.
So, what will you need?
You’ll need a good email platform—preferably one that can send behavior-based emails. You’ll also need a good email content sequence to guide new members through onboarding. You may also want a way to do A/B testing to see which emails are working best.
You can get all of the above with marketing automation, but it can probably be done manually as well. Either way, you can cut your new member churn down from 40% with good onboarding processes.
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