Data analytics is a long-term strategy and results can oftentake many months to appear. Yet the credit union leaders who haverecently tapped into the power of data analytics will tell youthere's value even in the preparation and practice of businessintelligence strategies.

These leaders report it's an eye-opening experience that has thepotential to change a credit union's entire culture of decisionmaking.

They are learning new truths about their members. They're alsoabsorbing the value of mining data from new sources, practicingsolid segmentation strategies and holding back control groups.

And, they say, there's a powerful affirmation from having hardnumbers to support the extra investment – and sometimes the addedrisk – required by their marketing campaigns.

Uncovering Truths to Save Money

Curt Johnson, assistant vice president of mortgage and cardservices for IH Mississippi Valley Credit Union in Illinois,recently set an aggressive goal to grow the $840 million creditunion's credit card portfolio by 25% within one year. Dataanalytics, he knew, would play a critical role in achieving thatgoal. To provide the analysis, Johnson called in analysts toprovide an in-depth assessment of and recommendations for growth ofthe portfolio.

When building IHMVCU's candidate model, analysts consideredthese factors among others.

• Number & Order of Loans
• Number of Accounts
• Age
• Total Service Balance
• Level of Engagement
• Presence of Children

Some of the findings were a surprise to Johnson. Others werenot. But, advised Johnson, “You have to be humble when you workwith data analysts. For every affirmed suspicion, there's a newtruth that will save you a ton of money in marketing. And eventhose findings that confirm something you already suspected provideimportant, data-backed reinforcement.”

Turning Weakness to Strength

Hailing from a national bank where data was king, Russell Palmerwas no stranger to the value of business intelligence. Coming fromthe merchant processing side of credit cards, however, issuance wasan entirely new adventure for the newly minted Spokane TeachersCredit Union card services manager.

“I wanted to guide our team to make the best possibledecisions, but there was a lot I didn't know,” admitted Palmer.“Data analytics was my answer to getting up to speed quickly andsufficiently, and it has worked extremely well. Because I didn'thave the background and was open to asking questions, we've learneda great deal more about our cardholders and our portfolio thanwe've ever known. In a way, my biggest weakness became my biggeststrength.”

One of the questions Palmer asked was why the credit union onlyconsidered FICO scores when extending credit line increases.Additionally, why was the same amount extended to every cardholder?Were there some cardholders who were offended by the small-dollarextension? Were there others who received the extension and used itin a way that put themselves or the credit union at risk?

“Working more closely with segmentation and analysis, we havecome to see the opportunity that's out there for not only ourcredit and checking accounts, but across the cooperative,” saidJohnson. “For programs that have plateaued, this kind of approachwill bump them up to whole new levels. We know we are just at thevery tip of working with data analytics.”

Making Data Analytics Work For You

Data analytics allows for successful segmentation and is quicklybecoming the magic word in credit card marketing. Getting the rightoffer to the right cardholder at the right time in a manner that ismost profitable for the portfolio makes long-term loyalty possibleamong cardholders.

Often data analytics strategies simply boost the results ofprograms a card team is already familiar with, like balancetransfers, holiday promotions or line increases. Similarly, much ofthe data is already there; it just needs to be mined.

Things like previous purchases, current balances, payments andutilization rates, when analyzed over even just a few months, canreveal valuable behavior patterns.

Combine that information with external data, such as creditbureau scores and competitive analyses, and you have an entirelynew perspective on even successful portfolios.

Consumers, too, will begin to feel more personalized attentionas their credit unions begin to deliver the kind of high-caliber,competitive and tailored products they love.

Dan Lozier issenior director of client relations for The Members Group in DesMoines, Iowa.