Credit unions (CUs) have long relied on personalized banking approaches and trust to retain their members, but those that cannot meet all of their members’ needs are at serious risk of losing them to other financial institutions (FIs). Nearly four out of 10 CU members would be willing to switch primary FIs, according to the PYMNTS Credit Union Innovation Playbook — and the COVID-19 pandemic is making it even more important for credit unions to provide the support and stability that consumers seek.
CUs that find innovative ways to engage their members and provide more value are more likely to appeal to wider member bases, according to Krista Thompson, director of channel strategy and integration at Houston-based TDECU, which has over $3.7 billion in assets, more than 343,000 members, 33 branches and four back-office service centers.
“It is important for CUs to spend time focusing on their members’ voices and trying to understand exactly what they find important when it comes to offering loyalty and rewards programs,” Thompson said.
Listening to Members
CUs that tailor their innovations to members’ needs and are able to keep them engaged are more likely to cultivate long-lasting relationships, Thompson said. TDECU has addressed members’ feedback by developing two rewards programs that help them save on everyday expenses.
One is a partnership program with Energy Ogre, a service that assists consumers with finding and selecting electricity providers. TDECU members who sign up for the service, which costs $10 per month, can use a promo code to receive the 13th month of service for free.
“The program helps our members save up to 60 percent on their energy bills by monitoring the best price in service value among area providers,” Thompson said.
TDECU also has a purchasing partnership with Office Depot that provides members with discounts, offering special pricing to business owners, parents, teachers and any others looking for classroom or office supplies. Loyalty programs such as these ultimately help CUs retain members, generate referrals and create effective brand awareness, she said.
“Loyalty rewards programs allow members to stretch their dollars further and become better financial stewards of their money,” she explained.
This, in turn, can help CUs grow and retain the loyalty of existing members, she added.
Product and service innovations — especially those that offer incentives to members — have become strong selling points for credit unions as well. TDECU launched a referral program this month that enables members to provide contact details for friends and family or to share membership offers via social media, according to Thompson. Both current and potential members are then rewarded with Visa gift cards if a referral offer is accepted and if certain purchasing conditions are fulfilled. Members can receive up to $500 per year through the program, she added.
Supporting Members Through the Pandemic
Staying abreast of members’ needs during the COVID-19 pandemic has added another layer of responsibility for credit unions, but it has also given them an opportunity to help members weather the resulting economic downturn. Supporting communities with timely products and services remains fundamental to helping CUs establish and preserve loyalty.
TDECU is taking several steps to address issues members are confronting during the crisis. It created a COVID-19 response center that provides quick access to public resources, and it also unveiled financial aid offerings such as loan payment relief and loans that provide easy access to cash. These services are intended to help families and businesses survive pandemic-driven financial hardships and to build trust, Thompson noted.
“People still have questions, so we keep looking for ways to make sure we are available for their immediate and future needs,” she said. “Our message to members is that … we are fulfilling that promise by being open — just differently.”
Avoiding viral spread is a constant worry during the COVID-19 pandemic, and TDECU is considering enhancing its technology offerings with emerging tools to help keep members safe. Many members are working from home, too, leading to additional considerations regarding how best to serve them.
TDECU and other CUs across the U.S. are helping members navigate an unclear future as the world reconsiders normality during the pandemic and in its wake. The need to engage with customers and quickly respond to their needs is one thing they can be sure will not change, however, and loyalty and rewards offerings could prove crucial in this regard.