Importance of Analytics for Credit Unions
Credit unions were created with the idea that people should help people. For that reason, personal touch and interaction is a key differentiator for credit unions when compared to banks. Some might fear that as online and mobile banking become more and more popular, the personalized nature of credit union business will disappear. However, quite the opposite is true.
When used correctly, active analytics programs provide the opportunity to customize those interactions and increase the relationship – personalizing things to create the same level of individualized attention customers receive at a branch office.
Active Analytics Deepen Member Relationships
Using customer data to aggregate information and gain insight into member behavior may seem contradictory to the collective, personal character of credit union business. But when you consider the benefits active analytics bring to a credit union as well as its members, you can see how easily the positives fit with the credit union ethos.
Active analytics allows a credit union to:
- More effectively target customers – You can find the members who most need a service or product you can provide and reach out to them at the most effective time.
- Develop deeper, more personal relationships with members – By customizing the way a member relates to you, you increase loyalty and create a more satisfied member.
- Better compete against large banks – Analytics programs allow you to tap into new revenue streams while also increasing loyalty among members, making your credit union a stronger competitor against larger banks.
The power of this insight is that the data can predict customer behavior, allowing you to increase the effectiveness and personalization of marketing offers to members – and present those offers in a manner and at a time when they are most likely to use them.
Here are three areas where active analytics can be most effective:
- Segmentation driven marketing – By tracking and measuring important indicators in a member’s life – age, gender, marital status, income and many more – you can segment members into easily targeted groups. From there, you can develop targeted marketing campaigns that create relevant, personalized experiences that improve customer engagement and provide cross-selling opportunities.
- Merchant offers – Based on transaction data and other relevant information, you can provide personalized, yet anonymous, incentives that compel customers to make purchases, thus driving transaction volume and revenue.
- Price optimization – Using collected data, financial institutions can review pricing strategies and optimize them to account for when, where and how customers use a service or bank credit or debit card in order to improve profitability.
At its most basic level, a merchant-funded offer could encourage a member to use his or her credit union-issued credit or debit card more often by rewarding him or her with points or other rewards to stores, hotels or things of interest.
Analytics can go even farther, tracking where and how your members use their cards, access your online or mobile banking application and more in order to determine their habits and predict their financial needs. For example, members buying new baby items with their card could be targeted for home and car loan offers as they may need more space for their growing family.
How Members Benefit
In addition to personalized, timely offers that encourage them to take advantage of opportunities that directly pertain to them and their interests, your members can benefit from a greater bond with you. Studies have shown that customers place a large amount of trust in their financial institutions; personalized experiences can further develop that trust and loyalty.
In addition, because opportunities can be made available across platforms, members benefit from the convenience and the ability to receive and use offers and rewards when and where they see fit.
Where to Start
Most financial institutions want to be more data-driven in their decision making, but many struggle with where to start and how to act on the data they collect. And, until recently, deep analytical review of customers was available only in retail environments.
While there are numerous data tracking and marketing companies available to provide you insight into a member’s behavior and lifestyle, it’s important that a credit union finds a provider who understands it and the unique nature of credit union business.
In many cases, your technology provider can help you translate data already collected into actionable insight. In addition, if your provider’s scope is broad enough, it can turn ideas from other businesses’ analytics programs into plans you can use as well.
Ultimately, active analytics is key to improved, dynamic marketing campaigns that better serve your members, while also tapping into new revenue streams through customer segmentation, optimized pricing and cross-selling opportunities that deliver targeted, relevant and timely offers across multiple delivery channels.