Member Databases a ‘Gold Mine’

Mining member records helps CUs unearth a treasure trove of data.

December 19, 2011
KEYWORDS data , loan , market , segmentation
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Bad practices

Email is an area fraught with misconceptions, says Ron Daly, president/CEO at Digi-talMailer Inc. “Credit unions should look at how they do emails now and how they segment. Just blasting generic emails to everyone doesn’t work. What data are they using to differentiate the messages? Age? Location? A particular product and the demographic it most appeals to? They need messages that are almost custom-designed appeals.”

Daly tells credit union clients email isn’t free. “It’s not free because misconceived email can cause members to quit paying attention or become irritated at receiving messages they consider irrelevant. That’s when members don’t listen anymore—they see your emails as noise so you lose potential sales. That’s where email becomes very expensive.”

On the upside, Daly tells clients “data is everywhere and it’s pretty cheap. For example, one of our clients was planning to open two branches. Easily obtained data allowed the client to learn about area residents in terms of home and car ownership, level of education, and income. After determining which of the 33,000 nonmembers in the area were the best prospects, the credit union went after the top 6,000 using targeted marketing.”

Rizzo says credit unions make three mistakes with segmentation marketing:

1. Focusing on art rather than content. Don’t get mired in design and lose valuable time and energy.

2. Forgetting to track results. Don’t have the attitude that, “We got the marketing piece out; we’re done.” If you don’t track, you don’t know.

3. Rushing into social media. “I don’t see the business case that justifies expenditures on social media,” Daly says. “The concept of social media is to create community—a place to be social. Nobody wants to be social about money.”

What vendors deliver

Weissman says many credit unions are “overwhelmed” at the scope of matrix marketing. That’s why DMA stresses three things to clients:

  • We do the work for them. They don’t have to have the IT power. We do the setup, data analysis, program design, and operation.
  • We tell them this isn’t just another marketing campaign. It can lead to beneficial cultural change in terms of their member relationships and how they view profitability.
  • They must focus on the segment and the fundamentals of profitability. It’s not about squeezing every possible cent out of every member, it’s about establishing long-term, profitable relationships because you know how to approach your segments.


After looking at a credit union’s data, a vendor will come back with recommendations. “We’ll say, ‘Here’s your branch market, current and prospective,’ ” says Rizzo. “Where the credit union might put a circle around a branch to indicate market area, we might say ‘Your territory goes down to the river here and to the base of those hills there.’

“Here’s where your competitors are, here’s the potential loan market, and here’s your current share,” he says. “With figures like this, you can set realistic sales goals: ‘There’s a potential $400 million mortgage loan market; let’s go after X% of it.’”

Once a credit union better understands its segments, it can hone its messages. “We set up a template based on data the credit union gives us—images, greetings, salutations, language,” says Daly. “We tailor offers to recipients’ financial abilities. For instance, loan offers are based on how much credit would be available to a recipient and illustrated with a typical purchase that credit would allow.”

In another offer, a credit union sent 4,000 emails to members likely to want new cars. It said: “Move your current car loan to us and we’ll pay you $200.”

That offer generated 247 responses, says Daly, “so the next emails to car prospects em-phasized that offer. That was the “trigger.” You start down one path and see what people respond to the most—the trigger—then head down that path thereafter.”

True matrix marketing involves working your database to the nth degree and shedding stereotypes about members, Weissman says. “Understand how many segments you have, and let that understanding become the basis of your culture.”

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