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Education Credit Union Teaches by Example
Education Credit Union is teaching by example,
and the lesson is that active promotion of a credit
card program can pay off. The Texas credit union has
been able to increase its number of active card
accounts by more than seven percent in less than a
year with its mix of promotions and staff
incentives.
Based in Amarillo, Texas, Education Credit Union is
a 70-year-old institution that began by serving the
Amarillo school district. It now serves employees
and students at all schools and colleges in a
six-county area in the Texas panhandle. With 14,747
members, the credit union has assets of $110
million.
After about three years with very little promotion
of its card program, the TNB Card Services
processing client saw a trend that it wanted to turn
around, says April Altom, director of marketing for
Education Credit Union.
"We kept seeing year after year that the number
of cardholders and the amounts they were spending
were decreasing. When we issued Platinum cards last
fall, senior management decided that we needed to
really promote our program," Altom explains. By
blending special promotions and encouraging the
staff in Education Credit Union's three branches to
encourage low-risk members to become cardholders,
the credit union has been able to boost its number
of active accounts from 2,100 to 2,250, a more than
seven percent increase in well under a year.
Usage has also risen impressively. The average
balance in July 2005 was $2,068, up 47 percent over
the January 2005 figure of $1,403. Average monthly
spending per account increased in that same
six-month period by more than 50 percent, from $204
to $313. These were the first increases in any of
those categories since 2001, Altom notes.
"With our Platinum card, we promoted its
rate, benefits, and credit limit through statement
stuffers and in our quarterly newsletters. Each
time, we emphasized different points about why it is
a better card," Altom says. She adds that the
various promotions the credit union has done through
TNB have been effective. Those include a balance
transfer promotion in late 2004, a post-holiday
interest reduction promotion in early 2005, and a
spring new account acquisition drive.
It is the personal touch that has turned out to be
the frosting on the cake, Altom insists. Beginning
in January, Education Credit Union began an
incentive program to encourage in-branch staff to
proactively solicit members with high credit
scores.
"When tellers, loan staff, and others are
helping members and see that their credit score is
680 or above, they give them an application for the
Platinum card. The staff person initials it at the
bottom, and gets a bonus if the application is
returned and approved," Altom says.
The incentive isn't a big one - $3 for a returned
application and another $7 if it is approved - but
it is definitely effective, she adds. "The
tellers particularly take an active role now. Not
only do they give the member an application, but
they tell them about the card and hand them one of
our newsletters that explains it."
The success of the marketing effort surprised Altom
and the credit union's senior management, she said.
"This turned out to be a lot easier than what
we expected," she says. "We didn't start
out with any particular expectations; we just knew
we needed to test the waters and make sure that our
members wanted credit cards. "I think our
success is due to the combination of promotions and
having the staff involved. The Platinum card is very
important, too. It proves to members our interest in
our card program, and it was really the trigger for
our marketing efforts."
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