Engage Your Unengaged: Subscribe & Grow [Part 2]

Engage Your Unengaged - Subscribe & Grow

Selling to an existing customer is cheaper and easier than acquiring a new one. Business 101. Does that also apply to financial services? Absolutely.

You get it. From the smallest credit union to the largest megabank, all market to their existing base. Yet at nearly every credit union or community bank, between 25%-35% of account holders have few services, and hardly use what you offer.

They’re members in name only (cheating, perhaps, but chances are, they never even swiped right on you!) and are banking elsewhere. Your CU isn’t their primary anything. Since maintaining accounts is a semi-fixed cost, this creates a drag on your revenues.

This leaves your institution with three options:

Fire them.

That’s what the mega-banks do. Raise fees and they’ll either begrudgingly pay or leave for brighter (more affordable and welcoming) pastures. Unfortunately, that’s often not your credit union, or a community financial institution, as neo-banks and fintechs continue gaining ground.

Ignore them.

It’s not deliberate, but it happens. Onboarding is hard! You know unengaged members are a big portion of your institution (often from analyzing your checking account activity), yet they continue to ignore your efforts. No engagement strategy has worked…so why bother?

Easier to focus on attracting new ones while expanding service offerings for your most active members.

Delight them.

Delighted Members Checking

Yes, it’s possible to resonate, connect, and focus their attention. Convert your unengaged to realize increases in deposit activity, interchange volume, and lending. In other words, making your institution more important to their financial life.

Decades of data across hundreds of credit unions and community banks show the strategy drives results.

Sidenote: We will be talking about a specific service, but the concept can work, with varying success, using a range of approaches generally related to what you’ll discover below. We also cover more strategies in the Checking section of our Learning Library.

To make it happen, you first have to know who those unengaged members are, then build an attractive offering they (and others already engaged) will want.

Get the Data

Gain a clear picture of who is and isn’t engaged using either in-house or 3rd party analytics. An industry rule-of-thumb is:

  • If “Combined revenue contribution” – “Cost of account maintenance” = “A negative number”
  • Then they’re unengaged.

You can also differentiate further to classify members with revenue under a certain value as unengaged. With a clear target market, you can build out your new checking suite.

Differentiate Your Checking

What should your new checking offering look like? Here’s some factors to consider:

  • Knowledge of competition
  • Goals & target audience
  • Member buying habits

Let’s start with your main competitors: Big banks and Neo banks/fintechs. Mirroring their plans might seem like a smart move. Maybe just adding early paycheck, or increasing interest to your current plans might do the trick?

First, how does that fit in with your goals? If they include phasing out dependence on OD/NSF fees (as recommended by NCUA) while bumping up deposits and recurring revenues, the numbers just won’t work.

Second, with your target audience being unengaged, will this new account somehow get their attention? If your marketing hasn’t moved them to action so far, why expect anything different now? Especially when other providers have far better technology and reach?

Checking Cheat Sheet Tablet Cover

Your checking program is where loyalty, engagement, and onboarding really begin. So what are you doing to ensure it’s firing on all cylinders? This Cheat Sheet will give you 4 quick, actionable steps to make the most of your checking program.
Get the Cheat Sheet

(Relevant) Subscriptions Drive Revenue

Subscribe Key on Keyboard

Did you know that the average consumer has more than 12 subscription services and spends an average of $273 monthly?

We all know Amazon. You can buy nearly anything in their expansive store with no monthly fees. However, there’s also a premium option – Amazon Prime. In addition to the free shipping, this service also includes:

  • Prime Video streaming service
  • Prime Music
  • Prime Gaming
  • Prime Photos
  • Discount Shopping on Amazon and at Whole Foods
  • Free Grub-Hub Delivery
  • Faster (one, two, or same-day) shipping

Millions of consumers see value in this package of benefits, and willingly spend the $14.99 monthly subscription fee.

Your credit union’s free checking is the regular Amazon store. People use it, the platform works, but the real revenue and value comes from the add-on benefits. Consumers today are looking for interesting products, and they’ll pay a reasonable cost for them…if they exist.

Become More Than Free Checking

Becoming your member’s source for services they already pay for, but at a lower price? Then combining those with additional benefits to save them time and money? That’s interesting.

At $5, $6, or even $7 monthly, your credit union can build loyalty while delivering value in a product that catches attention. Remember the new adage:

  • Gen X & Boomers: I already have a checking account.
  • Millennials: Why do I need a checking account?
  • Gen Z: What’s a checking account?

Promoting your checking (or more challenging, share draft) accounts on their own isn’t resonating, even with many existing account holders. It’s not interesting. Change that. Flip your unengaged members from a standard free account into one with substantial value at a fair price.

Across decades and hundreds of institutions (even multiple providers), most choose to stay with the new value-added account. Of course, your credit union can accommodate the percentage who wish to remain on your free account. But even for them, you’ve got their attention.

How will you use that to enhance their relationship (and profitability)? To grow financial wellness? It’s hard to help a member who is hardly a member.

With a checking account that catches attention, you’ve built differentiation and an opportunity to expand the member conversation. Working with trusted partners, credit unions can build recurring revenues, increase deposits and debit swipes, and even grow your loan portfolio.

Make Your Check Out To “Value-Added” 

Several firms operate these value-added checking offerings. We partner with the team at StrategyCorps, a 20-year industry veteran working with approximately 400 financial institutions nationwide.

Across those clients, the goal remains consistent: Gather detailed and relevant data, use that to build an engaging checking product with relevant features, keep risk low, and implement with empathy.

If this sounds like a path you feel would be worth investigating for your credit union, we’ve got two paths:

First, schedule a chat to discover how Value-Added Checking might work and address the challenges of your credit union:

Next, continue your learning journey. Our Learning Library has a wide range of articles diving into different questions you may have about Checking!

Finally, subscribe to the Learning Library so you don’t miss any future insights!

Joe Winn - CU Geek

Blogger. Speaker. Futurist. Part-time Jedi.

Dedicated to helping your credit union, large or small, deliver mission-focused financial empowerment to your members. And make a positive impact on your community while you’re at it.