50%+ Reply Rate & More with Text Messaging (SMS) for Credit Unions: What You Need to Know

iPhone Setup Hello
(Last Updated On: September 15, 2023)

When it comes to member communications, email is king. Financial marketers use email every day to correspond with their member base, promote new offers, and drive member sign ups. But you know it’s not all roses and blue skies.

With the average email open rate for the finance industry sitting at 21%, you can safely assume most of your emails go unread.

Armed with this information, how are you going to make sure you get in front of your members, instead of languishing in the Promotions tab?

E-mail May Be King, But…

iPhone Typing
The iPhone 4-5s devices fit in your hand like none since…

This dilemma sparked the growth of a new communication channel for financial marketers. It has 7 billion users, instant delivery, and a 98% open rate. And it works natively on a device that’s probably in your pocket or hand right now. Ding! Sorry, let me just check this.

If email is king, then text messaging is the queen who gets things done.

For members on the go, SMS (Short Message Service) enables timely and simple member interactions, alerts, and new offering notifications. Texting has also moved past one-way pings to become a two-way conversation.

Want to tap into platform-specific additional capabilities? Both Apple and Google make it easy for businesses to stay in secure communication with customers. And using them is also an option on top of traditional texting.

Consumers (ie. your members) want you to communicate via text. It’s easy for all parties. And 60% want to text you back for support.

But just like email, you can’t just start texting your members willy-nilly. You must receive permission and make sure your outreach is compliant. The latter is the main roadblock and objection from our credit union partners. So let’s overcome it together!

There’s a lot to consider before setting up a text messaging solution for engagement. However, the rewards are significant. We’ll help you ask and answer the most important questions to decide the best path forward for your institution.

First, we’ll discuss why even bother with texting. Then, we’ll consider some ways it’s used. Most importantly, you’ll learn what’s involved with gaining and maintaining compliance. Finally, we will look at some of the tools available to make it happen.

Ready? Incoming message: “Let’s go!”

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Why Texting?

iPhone with Unread Notifications
Those notifications are getting checked.

Marketing channels are over-saturated. It’s a challenge for all industries, especially those which are not traditionally “sexy”. Between a restaurant and credit union marketing message, we know which one a member will open.

Open and click-thru rates are on the decline, Organic social media reach is a challenge unto itself (We do cover it!). Members see marketing from hundreds of brands a day. How can yours stand out?

There’s one channel that’s largely unsaturated. And your services are perfect for it: Phone messaging. Besides having marketing real estate, texting data makes it irresistible. Texts:

  • Have a 98% open rate
  • Are opened within 90 seconds
  • Garner an answer in 3 minutes
  • Reply rates can exceed 50%

Did you receive any texts since opening this article? Be honest: Have you checked or replied?

Apple Watch and iPhone

Since our phones are with us at all times, you’re more likely to get in touch with members quickly. Plus, texts don’t just go to phones! I also receive them on my watch, iPad, and computer, and can reply from each. I’m tethered to nothing!

E-mail is on our phones, sure, but just getting to Inbox Zero is a challenge. Texting is fast, convenient, and lets members continue their conversations on-the-go in a manner not suited to e-mail. Bottom line: Texting is quick!

Case Studies

As a favorite book-reader would say, “don’t take my word for it!” This case study highlights a FL-based credit union that saw their engagement rates jump 20-30% after implementing SMS messaging.

Another credit union saw their collection recovery rates increase 75%.

Starting to get the message? Let’s see how you can use texting at your credit union.

How Can We Use Text Messaging in Our Credit Union?

Girl Texting While Walking

We understand you want to keep member confidence. Adopting a new medium and deluging it with non-relevant content is no way to build a following. While you have a range of options for texting, here are the most popular use-cases:

  • Important member alerts (e.g. transactional alerts, in-office changes, etc.)
  • Collection reminders, including repayment and delinquency notices
  • Customer service that quickly and privately answers simple member inquiries
  • Marketing of relevant products/services to current and prospective members
  • Sales follow-up channel
  • Location-based alerts (ATM locations, branch policies, etc.)

What else comes to mind? If it can be presented in a few characters, and is immediately relevant, you may have a winner!

Text, or SMS, marketing requires two simultaneous campaigns. In reality, it’s not much different from the idealized goals of your e-mail marketing efforts. First, you must drive opt-ins. Then, you must drive engagement from those opted-in.

This is a continuous effort as you build your numbers and welcome new members. And it brings us to the most important part: Compliance.

How Do I Maintain Compliance?

Policies and Compliance Chart

Before you can send a single SMS, you need express member permission. We call it opt-in. The TCPA calls this “express written consent.” There are a few ways to accomplish it within the guidelines.

This isn’t something to guess at. Our friends at Eltropy (a credit union-exclusive SMS provider) do it every day. They were kind enough to share 7 steps to take so your credit union can remain compliant with the FCC and TCPA rules:

  1. Ask your members to text a “keyword” to a short code (e.g. text MEMBER to 555-55). Assure them they’re not obligated to register and can opt out of text communications at any time.
    • Incorporate this request into in-branch signage, mobile banking, website opt-ins, and e-mail campaigns.
  2. Include a quick description of the program they’re opting into with a reminder that message and data rates may apply, along with a link to the terms and privacy policy.
  3. If you have multiple text programs in place (e.g. members vs. non-members, promos, financial education tips, etc.) only send messages to individuals based on the program they opted into. Do not add them into other programs without their permission.
  4. Make it simple and easy to opt-out at any time. Ensure recipients are always aware of their options by including opt-out instructions at the end of each text.
  5. Honor opt-out requests promptly. Do not keep messaging them if they’ve indicated they no longer want to be contacted.
  6. Specify text frequency during the opt-in process (e.g. sign up to receive daily transaction summaries).
  7. Structure your texts to follow the recommendations of the Mobile Marketing Association (MMA):
    1. Name of credit union
    2. Service description
    3. Frequency of text messages
    4. Customer support info (Text HELP for help)
    5. Opt-out info (To stop, text STOP)
    6. Additional carrier costs (MSG&DATA rates may apply)
    7. Terms & Conditions (hyperlink)

Sample CU Text

First Alliance CU SMS Sample
Source: First Alliance Credit Union. Note this example does not include a link to terms.

What Tools Do You Need for SMS Marketing?

As SMS marketing grows in popularity, so too have options for advanced messaging platforms.

“Wait, we can’t do this in-house?” Ok, you can, but how many other member services use a trusted partner? It’s going to be a lot of work to build it yourself. And as soon as you’re equal to a dedicated system, they’ll improve again. Find a partner.

Why? It’s more than just the ability to send text messages.

Using an SMS marketing provider lets you put all your campaigns and messages in one place. It’s also where you go to measure results, automate outreach, and ensure data passes through to the right system.

You know the importance of good data. Choose a provider which provides what you need.

When evaluating text messaging platforms, you’ll want to focus on three key things:

  • Compliance and security: Does the platform make it easy to stay compliant with and follow FCC/TCPA regulations?
  • IT integrations: Does the platform integrate with your core systems, CRMs, and IT systems?
  • Intelligence and analytics: Does the platform make it easy to measure the success of your campaigns and prove ROI?

Your next step is to review the providers. We’re preparing a dedicated “Best of” article now. That will bring some great options into one place. Because we’re about making it easy.

Texting is the New Normal

iPhone in Messages App
“What up” with your member communication strategies?

Mobile communication is the new normal. From casual chats with friends and family to government alerts, it’s all in your messages app. Your members want to receive information at the right time, on the right device, wherever they are.

They prefer texting to e-mail and phone calls. And when inboxes are receiving hundreds of messages a day, you’re not getting through as often as you need. Text is the new frontier. Play nice and you’ll reap the rewards.

SMS marketing and outreach helps you provide a superior customer experience. Plus, it can drive better results from your business acquisition and retention programs.

Be Where Your Members Are

Remember, you want to be where your members are. The messages app is the most-used app on the average phone. Get welcomed in and embrace the benefits for your institution and members.

Besides adding member convenience, you’re doing the institution a favor, too.

Getting in touch with more members and driving more responses helps you fulfill your mission of financial empowerment. While making your marketing team’s job easier.

Plus, you increase your chances of recouping late payments from unresponsive members.

Across the board, SMS gives you a better way to connect with your account holders.

Keep An Eye On Your Messages Badge

This is only the beginning of our coverage of SMS/text concepts for your financial institution. Look for more on providers and Pros & Cons, as well as our other topics by Subscribing to the Learning Library.

We’d love to stick around, but I just got a text. TTFN and TTYL!

This article was composed with the assistance of Baillie Ward.

Image credits: iPhone Home Screen by Sara Kurfeß, iPhone Hello by Szabo Viktor, iPhone and Watch by Daniel Korpai on Unsplash. iPhone typing b/w by relexahotels. Woman texting by StockSnap. Compliance chart by xdfolio. iPhone messages by Alex Tran. All from Pixabay.

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.