The amount of member data is limitless and can be overwhelming. How can you dissect this data to make it more powerful and use it to your advantage? In this podcast from the 2013 NAFCU Annual Conference, Maria Del Amo, Steve Miller, and Trish Donahue explore how to develop a successful growth strategy using member data to deepen your credit union member relationships and improve your credit union’s revenue. Included is a list of 10 database marketing strategies and several successful case studies, including laser-focused retention, maximizing wallet share, new client development, and logical development. Listen to the full podcast here: http://www.nafcu.org/NAFCU_Services_Corporation/Partner_Library/Uncover_Your_Secret_Within__Using_Member_Data_to_Strengthen_Your_Bottom_Line/

1. Uncovering the Secret Within:
Using Member Data to Strengthen Your
Bottom Line.
Presented by
Tricia Donohue – The Marketing Mix
Maria Del Amo – Cathedral Corporation
Steve Miller – Cathedral Corporation
July 10, 2013

7. Relevance is Key
Relevance is the single largest lever on
response in individualized direct marketing.

8. “We
are drowning in data but
starving for knowledge”.
John Naisbitt

9. New Key Perspectives & High-Impact
Strategies:
Account & Member
Relative Value
Laser-Focused
Retention
Checking
Bundling
Member Triage
Activities
+
Meaningful Data
Appends
Maximizing
Potential
New Client
Development
Logical Member
Growth Strategy
Guerilla
Prospecting
De-Marketing

10. New Key Perspectives
Account & Member
Relative Value
Behavior-based
using
commonly
available fields
Balance
NSF Fees
Interest
Rate
POS Income
Core Fees
Transaction
Activity
Meaningful Appended
Data
Lifestage
Available Wallet
Age
Income

11. Key Perspective:
Account & Member Value
• Adding a value viewpoint significantly enhances decisionmaking
• Behavior-based approach uncovers actionable strategies
to improve the bottom line

12. Key Perspective:
Meaningful Data Appends
P$YCLE : Segmentation system that
groups consumers into 58 segments
based on assets & a wide variety of
financial behavior.
Income Producing Assets (IPA):
Conservative estimate of liquid assets
held by the client. Based on a
correlation with HHs P$CYLE code.
Gap-To-Tap: Difference between a
client’s IPA & the deposit/investment
balances they hold with your
organization

13. Priority Strategies:
Account & Member
Relative Value
Laser-Focused
Retention
Checking
Bundling
+
Meaningful Data
Appends
Maximizing
Potential
New Client
Development
Logical Member
Growth Strategy

14. Priority Strategies:
Laser-Focused Retention
• Top 10% most valuable clients account for 8090% of net income; Top 20% for 100% +
• 30% to 50% of these clients are completely
unknown to branch/call center staff
• Average annual attrition for this group is 10-15%

15. Priority Strategies:
Laser-Focused Retention: Case Study
Avg Value All Clients =
$388
Avg Value Top Decile =
$4,237
# Top Decile Clients =
1,216
Annual Top Decile %
Attrition = 13%
Annual Top Decile $
Attrition = $670,000
Year 1: Reduced
Attrition to 10.5%
= $129K in Net
Revenue
Improvement
Year 2: Reduced
Attrition to 9% =
$206K in Revenue
Improvement

16. Priority Strategy:
Laser-Focused Retention: Case Study
• Group “frozen” & tracked each year
• Top Decile indicator on member record
• Commitment from field staff to be very familiar with this
group
• Over-sampled in yearly satisfaction surveys
• Multi-pronged communications plan: direct mail, email,
phone
• Results: Decreased attrition & enhanced bottom line (See
results on previous slide)

17. Priority Strategy:
Maximizing Wallet Share
• All low value/small position clients are not
created equal
• You are likely missing 30-40% of total
wallet – even from the most valuable
clients

18. Priority Strategy:
Maximizing Wallet Share: Case Study
Assets = $625 Million
Estimated Total
Opportunity: 3,962
Clients with $640 Million
Gap-To-Tap
Final Based on Large
Wallet/Low Risk: 1,125
Clients with $396 Million
Gap-To-Tap

19. Priority Strategy:
Maximizing Wallet Share: Case Study
• Branch-specific VIP Priority Prospects identified
• Special “under the radar” promotions developed &
consistently delivered via direct marketing (mail,
email, phone) over a 12-month period
• Results: $19,700,000 deposited in promo
accounts – 76% new money

20. Priority Strategy:
New Client Development
• For the past 5-8 years, many organizations have
been more focused on getting the getting the
next new member than expanding the ones they
just won!
• 90 days after acquisition, 75% of new clients
have only a single service

21. Priority Strategy:
New Client Development: Case Study
• 1,237 new consumer clients acquired in the
period analyzed
• After 90 days, 86% had only 1 service; after 6
months, 78% still had only 1 service
• Average consumer client performance ratio = 38%
Net Income of
New Clients ÷
Net Income of
All Clients =
Performance
Ratio

22. Priority Strategy:
New Client Development: Case Study
Estimated Annual # of
New Clients = 4,900
Average Annual
Consumer Account Net
Income = $285
Estimated % Single
Service New Clients =
80%

23. Priority Strategy:
New Client Development: Case Study
• New consumer clients assigned to three toplevel categories:
Yes
Checking
No
Checking
Large GapTo-Tap
• Specific offers designed for each group based
on onboarding path.
• Results: After 12 months, 16% of former 1service clients owned two or more services -revenue improvement = $169,048

24. Priority Strategy:
Checking Trifecta
• Key to achieving strong non-interest
income for Checking accounts – presence
of priority add-on services:
– Direct Deposit
– POS
– Bill Pay
• Often as important as selling another
service to overall value

25. Priority Strategy:
Checking Trifecta: Case Study
# of Consumer Checking
Clients = 6,479
Almost 40% missing
either Direct Deposit or
Debit Activity
Average NII for
Checking exponentially
higher when key addons present

26. Priority Strategy:
Checking Trifecta
• Sales associates incented for “out-of-thegate” bundling of Direct Deposit & Debit Card
for new Checking clients
• Low-cost communications to current
Checking Clients with cash coupons
executed throughout the year + quarterly
targeted calling blitzes
• Results: Average NII increased by 11% -adding over $100,000 annually

27. Priority Strategy:
Logical Member Development
Senior Management Directive:
“Grow the Franchise!”
“What am I
working
towards?
“And how
do I get
there?

28. Priority Strategy:
Logical Development: Case Study
Define the ultimate or
“Omega” client
Establish minimal
number of development
levels
Assign clients to various
levels leading to Omega
status
Ensure that progression
= improvement in
profitability

29. Priority Strategy:
Logical Development: Case Study
• Omega level present on all customer
“touchpoints”
– Branch distribution frozen and followed for 12 months
• Additional analysis focuses growth efforts on
members most likely to move up
• Direct marketing strategies identified for each
level
• Results: % of clients in Levels 3+ increased from
27% to 31%

30. Secondary Strategies:
Account & Member
Relative Value
Laser-Focused
Retention
Checking
Bundling
Member Triage
Activities
+
Meaningful Data
Appends
Maximizing
Potential
New Client
Development
Logical Member
Growth Strategy
Guerilla
Prospecting
De-Marketing

31. Priority Strategy:
Member Triage Activities
• Most clients exhibit tell-tale behavior prior to
closing an account or ending a relationship
• More cost-effective to discover/manage
potential client attrition than execute lost
client win-back strategies
Potential
Potential
Account
Account
Risk
Risk
Potential
Potential
Member
Member
Risk
Risk

32. Secondary Strategy:
Guerilla Prospecting
• Uncover & focus on neighborhoods where
you are successful at the desired behavior…
Clients with Home Equity
Prospects in That Area…

33. Secondary Strategy:
De-Marketing
• Embrace the truth that you can’t – and
shouldn’t – invest in all members
• Identify & isolate long-term members who are
low value/balance and low potential
• Find low-cost communications alternatives
• Allocate resources to members where
possible return is greater

34. “The
purpose of computing is
insight not numbers”.
R.W. Hamming

35. Data Modeling
• Transforms your member information into stronger
relationships that drive business growth through
personalized print and digital media services.
– Provide high-impact client insight
– Align with cost-effective communication programs to fully
leverage this new intelligence
– Drive your data with little impact on your internal resources
• Business results provide the case for doing the work
• Bottom line improvements are the objective

36. Thank You!

37. Cathedral Corporation is the NAFCU Services Preferred
Partner for Variable Data Driven Solutions for Printed and
Electronic Financial Services Communications. Learn more
at www.nafcu.org/cathedral or visit us in the Preferred
Partner Pavilion, Booth #30.