How CUs Can Leverage Rewards for Member Loyalty
Credit unions (CUs) are well known for their customer service, but they are often overlooked in favor of the flashier digital services provided by traditional banks and FinTechs. For example, a recent study found that 40% of clients of financial institutions (FIs) are likely to leave their primary FI if its digital experience does not compare to an online shopping experience, and CUs do not. exception to this potential attrition.
CUs strive to reduce this potential attrition through rewards and loyalty programs, which offer members money or other incentives to stay with their CU as their primary FI. Those without such incentives could quickly see their membership base shrink in favor of traditional banks and FinTechs.
In October Monitoring of credit unionsÂ®, PYMNTS explores the latest developments in the world of CU, including how rewards programs work to retain members, new collaborations between CUs and FinTechs, and how CUs strive to incorporate the latest technology. digital banking.
Developments around the world of credit unions
An example of a CU loyalty program comes from the Navy Federal Credit Union, the largest CU in the country. CU announced that its new card will offer 1.75% cash back on all purchases, with an additional $ 250 bonus for new cardholders who spend $ 2,500 within 90 days of opening the. account. Navy Federal Card Product Manager Justin Zeidman said in a press release that this program is meant to reward CU members for choosing it as their primary FI, promoting customer loyalty and discouraging CU members. closing their accounts.
The PSCU also strives to retain CU members and reduce the churn rate. The company recently unveiled a new prepaid card platform for this purpose, allowing members to view their transaction history, check balances and receive real-time alerts through the PSCU My Card Manager mobile app. . This prepaid card option was also inspired by the ongoing pandemic, which PSCU says has sparked increased customer focus on money management.
Digital banking is another promising avenue for promoting member retention, but some CUs are still reluctant to jump on the cyber-train, with 15% of CUs still not committed to the digital strategy, according to a recent study. Part of this hesitation can be attributed to the pandemic, with some CUs waiting for a less volatile industry and economy before committing to long-term change; however, most CUs have found that digital partnerships have resulted in steady growth.
To learn more about these and other CUs, download this month’s Tracker.
VyStar on combining rewards offers and member-centric services to build loyalty
Rewards programs can go a long way in retaining member loyalty, but they are only part of a multi-faceted approach to getting there. CUs should also provide exceptional customer service, including occasional and one-off surprise incentives, to keep members engaged. In this month’s report, PYMNTS spoke with Melissa Thomas, senior vice president of payments and operations for Jacksonville, Fla.-Based VyStar Credit Union, about how CU leverages rewards. in cash and features like early direct deposit to encourage member retention.
Deep Dive: Improve member retention through loyalty programs
Member attrition is a constant concern for CUs, with the big banks and FinTechs poaching customers through enticing digital services. Keeping these members within CU is essential for long term success, and many have found that rewards and loyalty programs are essential to achieve this. In this month’s Deep Dive, PYMNTS explores how CUs are reducing member churn by offering cash back credit cards and other loyalty schemes.
About the tracker
The Monitoring of credit unionsÂ®, produced in collaboration with PSCU, is your monthly go-to resource for updates on trends and changes in the credit union industry.