Some credit union marketing executives may be under the impression that snail mail direct marketing is dying because of today's fast-paced world of emails, texts and social media.

But the exact opposite is true.

After all, big brands such as Google, the world's most popular search engine, regularly uses snail mail marketing to promote coupons for its AdWords programs and other services. Credit unions are also finding that direct snail mail marketing is helping them grow their loan portfolios, including mortgages and home equity loans, as the real estate market continues to gain positive traction.

Contract signings for existing home sales increased by 12% from February 2014 to February 2015, and February 2015 marked the sixth consecutive month of year-over-year gain in that category, according to Aaron Jahnke, direct sales specialist for CUNA Mutual Group in Madison, Wis. In addition to rising home valuations, HELOC applications are up by 21% from a year ago and are at their highest level since June 2009.

What's more, the housing market tightened in February as the inventory of existing homes for sale fell and the inventory-to-sales ratio declined to 4.6 months, CUNA Mutual Group said in its April Credit Union Trends Report.

“A housing market rule of thumb is that when the ratio approaches four months, expect a surge in residential construction activity,” the CUNA Mutual Group report stated. “This will create a virtuous cycle where increased demand for homes leads to faster job and income growth in home building and other house-related industries. This will then create additional demand for homes and so a self-reinforcing spiral is set in motion.”

Doug MacDonald, vice president of Synergent Direct Marketing Services in Portland, Maine, said he's seeing an uptick in business from credit unions that want to increase market share of their home equity loans or mortgages. Synergent, a subsidiary of the Maine Credit Union League, has completed 560 direct marketing projects for credit unions across the nation over the last four years.

While the huge demand for email marketing services continues, credit unions have seen success from direct marketing mailers, postcards and letters.

“I've heard a lot that direct mail is dead or it doesn't work, but we've seen just the opposite,” MacDonald said. “We've seen direct mail performing very well when it is paired with target marketing and personalization. When you personalize the direct marketing pieces, members feel they are part of the credit union. We have seen personalization outpace standard direct marketing pieces without any personalization. There is a lot of research out there on the effectiveness of personalization.”

Additionally, MacDonald noted that member response rates can increase when direct mail marketing postcards or letters are followed up with email messages.

Last year, the $354 million Maine State Credit Union launched a direct mail and email campaign to increase its home equity loan penetration and increase line of credit balances with members who had a HELOC. The Augusta-based cooperative also targeted members with an auto loan or credit card who also had no delinquencies of 15 days or more and no charge-offs.

The unique selling points included no closing costs and local service. The credit union mailed 1,622 postcards that promoted the home equity loan and featured the member's name as well as photos of the loan officers. After the postcards were mailed, the credit union launched an email blast to 1,904 members, then did a second round of email blasts to 4,226 members.

The postcards prompted 25 unique calls and 15 unique hits on the cooperative's website. During the first email distribution, the open rate was 39% with an 8% click-thru rate. The second email blast produced an open rate of 35% with a click-thru rate of 9%.

According to the credit union, 15 new home equity loans were opened totaling $624,600. Among 14 members who received a postcard and/or email, their total line of credit balances increased to $273,641. And 179 members with existing home equity loans increased their lines totaling $500,112.

In addition to direct mail and email campaigns, other direct marketing channels can boost results, marketing executives said.

The $75 million Community Resource Federal Credit Union in Latham, N.Y. developed an “erase your mortgage” campaign, which, in addition to targeting 259 members via direct mail, utilized statement inserts, branch signs, a newsletter article and an on-hold phone message, according to Director of Marketing Wendy Meola. Credit union employees also were trained on selling the product.

The direct mail pitch was sent to members ages 40 to 65 who had a mortgage with the credit union and a credit score of 640 or higher. The rationale behind the campaign was that these select members might be willing to refinance their mortgage one more time and pay a slightly higher interest rate in exchange for getting rid of it altogether around the time they may retire. A no-fee offer also helped to sweeten the deal.

At the end of the eight-month campaign, Community Resource Federal Credit Union sold 56 new loans for $6 million. The promotion also attracted three new households with new loans totaling $226,000, according to Meola.

Another advantage of direct mail and email marketing campaigns is that they can also be far more cost-effective than mass marketing initiatives for small and midsize credit unions. For example, Maine State Credit Union's campaign totaled $4,457 including postage.

The $71 million Heritage Valley Federal Credit Union also took advantage of the affordability of direct mail. From September to December 2014, the York, Pa.-based credit union targeted members between the ages of 25 to 55 without first-time home loans with the cooperative.

The credit union distributed 2,626 personalized postcards. The postcard featured a unique web address that provided more information about the mortgage promotion. That site attracted 177 click-thrus.

Though the credit union decided not to send out follow-up emails, the direct mail-only campaign garnered 10 new mortgages totaling $1,373,844. That was an increase of $732,344 in total mortgage lending over the same period last year. The total cost of the campaign was just under $4,000.

“We also wanted to get the word out to members that just like the personalized service we give them for their auto loans and checking accounts, we can give them that personalized service and help walk members through the biggest purchase that they may make in their lives,” Tara Kochansky, marketing director for Heritage Valley FCU, said. “That was a big goal.”

For members who didn't prequalify for mortgages, Heritage Valley Federal Credit Union coached members on how to improve their credit standing and finances in order to qualify for a new home loan within six to 12 months.

“A lot of the larger institutions don't want to do that, and what sets us apart is providing that personalized service,” Mike Gutshall, executive vice president for Heritage Valley Federal Credit Union, added.

Instant Insights /

Direct Mail Helps Credit Unions Grow Mortgage Books

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