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, let’s look at 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.
For credit union growth, you have to make yourself look like the best option out there to prospective members. During these early stages of a relationship, your efforts are about looking good, trustworthy, and helpful. More importantly, you have to put yourself out there and make yourself noticeable.
Such marketing strategies must be about visibility. 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.)
Relationships don’t end after the courtship phase. If you stop paying attention to new members after they join, they’ll leave. Especially in the early stages, continue inviting them into your world. We have a couple suggestions about how to do so a little further down.
You can’t stop being your best self after the early stages of courtship. You must 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.
Ways to 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.
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.
#1. We use marketing automation. With marketing automation, you can steer your members through the onboarding process over any given period of time. For example, after they join, an automation platform might instruct new members to:
- Get a debit card
- Sign up for eStatements
- Open a savings account
- Apply for a credit card
This encourages early member engagement, which improves your relationship and makes it harder for them to leave later on. Plus, it allows for new marketing sequences and offers down the line, after they’ve become established, loyal members.
#2. You could also leverage data analytics. Vendors in the credit union space who specialize in analytics can use data to figure out which members may be about to leave so that your credit union can find a way to keep them around. Check out our data analytics providers guide to see which vendor might work for you.
#3. Try an onboarding partner or platform. Many vendors offer onboarding support to help new members. For example, Digital Onboarding provides a full onboarding experience. Other vendors, such as CU Rise, offer onboarding optimization along with their data analytics services.
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. Keep in touch!
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.
None of the solutions listed above are mutually-exclusive. Marketing automation, analytics, and onboarding can actually complement each other.
Sometimes, marketing is as much about nurturing your existing members as it is about attracting new ones. If you want to build strong, lifelong relationships, you have to continue to show care and support… even after they’ve joined. In fact, nurturing your existing members will ensure that they stick around for the long haul.
To reduce member attrition, we like marketing automation for a couple reasons. First, it increases engagement in new members. Second, it increases engagement for existing members as well. Third, it gives marketing teams a lot more power (and a lot less work).
You can read more about marketing automation (or request a demo) here.