Credit unions targeting growth must balance member acquisition and attraction. Credit union marketing strategies work best when they operate on this principle. (In the long run, at least.)
Too many credit unions focus on member acquisition at the expense of attrition. Once they find a new member, they stop thinking about that member as a new lead. They miss opportunities to drive deeper engagement in new and existing members. There should be a seamless transition from acquisition-oriented marketing to upselling and cross-selling account types, credit cards, and other products and services.
Instead, those new members receive the same marketing treatment as members who’ve been around for years. The new member may want a credit card or help with retirement planning. Yet, if they’re not introduced to these services, they may not find them—or they might find a competitor’s offerings. That means they’ve already got one foot out the door…
Why Credit Union Member Attrition Matters
It costs most credit unions over $400 to acquire a new member. Those members generate between $100–200 each in revenue per year. But with 25% member churn in the first year—and with an average attrition rate of 11%—more than 40% of new accounts will leave before they become profitable.
You can’t grow your credit union if members leave as quickly as they come in. Any credit union growth strategy that doesn’t address member attrition will be anticlimactic. Your growth campaign should also take special care to accommodate new members and guide them to relevant services. Getting early engagement and buy-in will decrease the likelihood of early member churn.
To better illustrate this principle, I’ve concocted a hare-brained extended analogy. Please bear with me in exploring how balancing acquisition and attrition is a little like a romantic relationship. The idea is to build something meaningful and important. And, to do so, you have to commit effort across all stages of courtship. Here’s how:
Credit Union Member Acquisition Strategy
Credit unions targeting growth must reach new members. It’s the most important aspect of growth. If you don’t acquire new members, you don’t grow. Simple as that.
It’s just like during the early stages of a relationship. You spend a great deal of effort grooming yourself, showing interest, demonstrating what a great catch you are, and practicing “off-the-cuff” jokes in the mirror. (Everyone does that, right? It’s totally normal! I’m sure of it.)
While it’s possible that someone might decide that they want to pursue you because they’ve heard about you and specifically sought you out, it’s not super likely. What’s more likely is that you put yourself out there. You made yourself noticeable.
Credit union marketing strategies must do the same. Be visible. Be your best self. Show the world how great you are. And, most importantly, show prospective members that you’re ready for love a strong, mutually beneficial financial relationship.
Fortunately, you’re probably already working on this. This is your marketing team’s bread and butter. You bring them in with your great rates, community involvement, and low fees. All it takes is getting the message out.
Credit Union Member Retention Strategy
So, once you’ve bewitched a prospective member into joining your credit union, what do you do? If you answered, “find another prospective member and get them to join, too!” Then congratulations! You’ve just become the equivalent of a financial Tinder fling. (Love ‘em and leave ‘em, for those who aren’t familiar with Tinder.)
You can’t grow a relationship by ignoring the needs of your partner. If you go on a few successful dates with someone, but then you stop interacting with them after they commit to you, then you’re not in a relationship—you’re ghosting them. Don’t be surprised if they take their cue to leave.
Similarly, you can’t grow credit union membership by ignoring your new members. If you forget about them, they may be just as quickly wooed by another financial institution. They might decide that you can’t meet their needs or that you simply don’t care.
If you’re good at relationships, you know that you can’t stop being your best self after the early stages of courtship. You have to continue to nurture and support that relationship. Remind them why the joined with you in the first place. Help them grow and become better versions of themselves. Show them what you can offer and how you can support them through their life’s journey.
Especially in the first year or two after joining, you should present or recommend relevant services to your new members. (There are a few ways of doing this. We use marketing automation and lead scoring. You might also leverage data analytics or a marketing/onboarding platform like Vetter.)
Reduce Credit Union Member Attrition
The best way to keep the flame alive is to continue giving your full effort to the relationship. When we say, “remind them why they joined with you in the first place,” we mean almost exactly that.
As your members journey through life, you can be there to support them. Did someone just graduate from college? Let them know about your student loan consolidation program. Did a family just have a second child? Congratulate them and offer an auto loan to finance the SUV they’ll need for soccer practice. Did they have a third? Remind them you can help with a home improvement loan to add a new room or baby-proof the old deck.
Member retention is just as important as member acquisition for credit unions. After all, you can’t grow your credit union if your member attrition rate is as high as (or higher than) your member acquisition rate. Remember, it’s not enough just to have members: you need engaged members.
Focusing on Member Acquisition and Attrition
You can target your credit union’s marketing strategy toward member acquisition. You can keep in touch with your current members and make sure you know what’s going on in their lives, while offering any applicable services. You can send flowers (although that might be weird).
You can also streamline your marketing outreach by doing both. Yes, bringing in new members is exciting and important. But ensuring that your new and existing members use or are aware of your services is just important in driving sustained, profitable credit union growth.