Like a school boy standing up to a playground bully, CSCU wanted the attendees and the entire credit union industry to understand that credit unions can make money with their credit card portfolios and that these portfolios are and should remain an integral credit union product. That sub-theme bubbled just below the surface of many of the conference’s sessions. Gary Raddon, Chairman of the Raddon Financial Group, a leading financial research and consultant firm, set much of the underlying tone in his opening presentation confronting what he called the “myths” underlying some credit unions’ fears about their card portfolios, for example that credit unions cannot compete in the card market. “Who says we can’t compete,” Raddon asked, his voice moving steadily between a down-home Harry Truman and a pumped up church evangelist. “I have never seen anything that came out of research that suggests that is true. Now, we may give up, we may lay down, but there is nothing that says that if we go toe to toe we will lose.” While everyone is “running around with their hair on fire” about their credit card business and portfolio, Raddon told the 500 credit union card executives present that RFG’s data showed that credit cards represented an integral part of a credit union’s product line and should not be jettisoned without a lot of consideration beforehand. “You would be hard pressed to come up with an argument to sell a portfolio,” Raddon added. “Now if you are willing to lie down and die then,” he said, letting his voice fall, “sell, and better today than tomorrow. But you’re not, because that’s not what this [credit union] business is all about.” Much of Raddon’s talk centered around an underlying theme of the conference, which was to help credit unions better understand just what it is that they have in their card portfolios and how the cards serve to cement credit union members even more firmly to their CUs. He pointed out, for example that credit union households that have even a basic VISA or MasterCard, which is the majority of credit union households, still have higher balances per household and use more credit union services than do households without a card. He peppered his presentation as well with examples of some of RFG’s credit union clients, each one a larger credit union, which used mixtures of card offerings, employee incentives, introductory rates and card integration to dramatically increase their card penetration. In its “peer panel” session, which featured a mock boxing ring and participants barefoot, wearing boxing gloves and beating up an inflatable doll dressed in a business suit which was meant to represent the monocline card issuers, the credit union card executives which had found success with their portfolios reported and basked in their success. Elaine Robbins, CEO of the $20 million Human Services Employees CU headquartered in Atlanta, said her credit union saw a 6.9% increase in total accounts, a 3.3% increase in total outstandings, a 14% increase in volume and a 19.4% increase in usage, all on a budget of roughly $1,000. The campaign involved identifying credit union members with credit scores of more than 600 and sending those members a VISA pre-approved application. They also saved postage by mailing the applications with checks and correspondence already going out to that member. The credit union also worked with its staff to provide incentives for handing out VISA applications and in general managed to a create an atmosphere in which the credit union’s staff came to feel ownership for the credit card product, she related. Robbins told the meeting about how a friend of hers, also a credit union CEO, had “pestered” her into attending her first CSCU conference last year. It was at one of the sessions of the sessions that Robbins had become inspired to do try with Human Services’ portfolio what others had managed to attain with theirs, she said. She wasn’t the only one. Kelly Gaughan, card coordinator with the $50 million Bellco FCU headquartered in Wyomissing, Pennsylvania, told the session of how her credit union had averaged only two new cardholders a month and had only 111 of its 7,500 members carrying its platinum card. But rather than give up, the credit union adopted a promotional campaign that saw it cut the annual percentage rate from 10.99% to 8.90% and offered an introductory 6.90% rate. Bellco also adopted employee incentives, as well as indoor and outdoor posters and banners, receipt messages, telephone on-hold messages and other measures. In the end, for their $4,000 budget, Bellco saw the number of Platinum cardholders’ increase by 111% at the end of the 90-day promotional period, Their sales volume jumped by 184% in 2003, as well. In addition, the credit union increased the average number of new cardholders by 70% and monthly sales volume increase by 14.00% But cards were not the sole subject of CSCU’s presentations. Jason Dias, an historian, gulf war veteran and an expert in generational marketing, delivered a strong presentation about credit unions’ need to address the different generations of their members differently. For example, credit unions should consider marketing themselves as sources of “discount banking” in order to connect with potential Generation Y members who are among the more bargain conscious of American generations since the generation that lived through the Great Depression and World War II, Dias told the attendees. He urged that credit unions not be afraid of the arguments they are having with banks, noting that “you have to have those arguments and you are going to be stronger for having had them.” But he urged credit unions not to lose sight of the next generation coming up on their marketing agendas as they fought with banks over this generation. “Today your sole proprietor is as likely to be 24 years old as he is to be 65 years old,” Dias said. “If a significant percentage of Generation Y chooses `click alone dot com’ for their first mortgage or for their first car loan or their first line of credit or for their first credit card, banks and credit unions will not have the time or the money to fight with another,” he added. “You need to go out and get these guys right now. You lock them up early; you lock them.” Dias said, adding as he did often in the course of his presentation. “History is. You can change with it, or you can be changed by it.” Dias’ high energy presentation typified a conference that, despite the serious and sometimes technical subject matter, remained fun and active. Rock music, laser light shows and drum solos opened some of the sessions. At the opening reception, an actor whose head was made up to look like part of a centerpiece of fruit, startled attendees and set them buzzing about something other than cards. (see picture on page 32) Then there were the presentations by VISA and MasterCard marketing executives, who gave reviews and previews of both current television advertising campaigns as well as those just over the horizon. In general, conference attendees appeared very satisfied with how much they had learned at the conference, and appeared inspired as well to take the information home and put into practice. “We always come to this one” said Ron Barrett, a vice president with Randolph-Brooks FCU, a 42 billion facility located in the San Antonio, Texas, area. “Every credit union that has a card program ought to attend at least one of these. We always get ideas here.” -

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