“I don’t know where to start.”
As an analyst by trade, I am surprised that I haven’t yet started tracking, recording, and analyzing each time I hear this “not knowing where to start” comment. It must be the most common piece of feedback I get. (Judging by my colleague, Annalyn Hawkes, she’s often asked the same question!)
In most of the articles I publish, right about here is where I would typically quantify my observations and remove all doubt from my thesis with long lists of statistics and historical trendlines detailing recorded occurrences by time of day and by each lunar phase… Unfortunately, I regret that in this specific case you’ll just have to trust me — I hear this comment a lot!
For anyone who relates to this common struggle, here are 10 universal strategies for leveraging your data and creating value for your credit union. As with all things in life, the first step is the hardest, if you can get started with one of these strategies you just might accidentally start a cascade, or snowball effect accelerating your credit union’s data transformation.
1. Increase touch points
“Happy Birthday” goes a long way, along with celebrating membership anniversaries, and other key relationship milestones. These are also very easy data projects. Start simple by just showing your members that you’re paying attention, care about their achievements, and value their membership.
2. Find your non-users and ask for their participation
Simply asking a member to participate can have surprising results. Hint: some of them might say yes. This works especially well for services such as eStatements; use your data to find members not using eStatements and ask them to enroll for eStatements, bill pay, eAlerts, or any product or service for that matter. Find the non-users, and just ask them to participate. This could be a year long program with little effort, pick twelve products or services, one for each month, and once a month ask the non-users to participate.
3. Understand your delivery channels
Meeting your members where they are is a common strategy for successful credit unions. Asking a digital preferred member who has not seen a branch in five years to come in to fill out paperwork creates friction and perceived barriers. Use your data to study your channel activity, understand how your membership prefers to interact with the credit union, and meet them where they already are.
4. Analyze loan applications
Almost every credit unions I work with review loan originations monthly. However, far fewer credit unions analyze their applications. Understanding applications tells you what products your members are asking for, whereas originations more closely represent the products the credit union is looking for. What opportunities exist in your loan applications that you might be overlooking?
Many credit unions see an engagement rate around 50-70%. Meaning 30-50% of members did not perform a transaction last month, did not receive a deposit, and did not swipe a debit or credit card–generally their accounts sat idle. Use your data to find those inactive cards and try to re-engage them. Find members who are not using their accounts and remind them of the benefits of a credit union membership: ownership!
6. Start being proactive
As a consumer, if I had $50,000 in liquid deposits earning a 0.5% return slowly getting its purchasing power eroded by inflation, it would only be a matter of time before I relocate those assets. Or, for another example, as I pay off a loan or shortly thereafter, I’d likely have a demand for either another loan, or an investment vehicle for my additional cash flow. Use your data to be proactive, locate these situations, and proactively pursue the next financial opportunity.
7. Follow your member’s money
Member purchase/payment activity can be a wealth of information! Members rarely enter a branch and start telling you about each of their financial relationships and obligations, yet they effectively do so each and every time they send money out of the credit union. These transactions can be studied for insights into outside tradelines, relationships with other financial institutions, as well as consumer insights. How many members do you have using the credit union to pay their bank issued credit card?
8. Operational insights
What days and times do you see an increase in branch traffic? What day of the week sees the most loan application volume? These patterns exist, and they are fairly predictable; improve member service and scheduling by first understanding natural traffic tendencies and reacting appropriately.
9. Leverage bad situations
Unfortunately, in my experience most people avoid change. Many individuals require a catalyst, or some type of outside stimulus to occur before they consider actually changing. In our industry, this catalyst is commonly a fee. A member you haven’t spoken to in years suddenly calls out of the blue. Why? Because of a fee. People are generally motivated by money. Use these “bad” situations as a change agent. Find members who were charged an NSF fee last week and cross sell them your courtesy pay program, recommend them to your financial literacy program, or other product offering. Use your data to turn a complaint into that member’s catalyst for positive change.
10. Maximize program participation
Skip-a-Pay programs are fantastic, but so many credit unions fail to effectively manage and promote these types of programs. Use your data to first understand which members have a higher tendency to participate, then extend these data observations across your membership identifying larger segments of potentially interested borrowers.
Using these tips and tools will help you make the most of your data, understand your members better, and in turn, serve your members better!