An Ounce of Retention is Worth a Pound of Profitability

Cardholder retention efforts spring to life the moment a member signs on for a credit card with your credit union. Great member service, timely communications and strategic card initiatives lead to enduring and profitable relationships built on confidence, trust and loyalty.

Interested in gauging your credit union’s cardholder retention rate? Here’s a simple calculation:

(Number of Cardholders at the End of the Period – Number of Cardholders Acquired During the Period) ÷ (Number of Cardholders at the Start of the Period) x 100

Your cardholder retention rate reveals how well you’re engaging cardholders and providing value for your members. If it’s at 100 percent, then keep doing what you’re doing. If it’s lower than 95 percent, there’s work to do. Here are four tactics that collectively support a card retention strategy that builds loyalty, reduces attrition, increases retention rate and grows member profitability.

Give Your Members a Lift – A well-timed credit line increase offer lets members know that you know their needs. Credit increases boost member loyalty and drive credit utilization, loans outstanding and interest income. Credit unions that analyze their member data can easily target eligible cardholders and then design the appropriate marketing strategies for effective credit line increase campaigns.

Engage Dormant Members – Dormant members may need a friendly reminder of the value of the services you offer. A targeted usage campaign enables credit unions to recognize and engage the inactive accounts in their portfolio. Once accounts have been identified, your institution can create a series of communications to incent disengaged members to optimize their membership value.

Acquire New Accounts – Credit card account acquisition campaigns identify the members that can benefit from a new credit card account offer. This precision in member segmentation enables credit unions to target the qualified members who have yet to put your credit card in their wallet. Additionally, drive members to a secure and personalized page where prospective cardholders move forward with your offers to apply or pre-qualification invitations. Understanding the member’s needs and finding a card that best suits their behaviors will likely elevate your brand and your institution to top of mind.

Reward Credit Card Usage – People love the perks they earn by using their credit union’s credit card. Loyalty and rewards programs are staples of any credit card portfolio aspiring to be consumers’ preferred choice cards. On top of rewards and incentives, offering skip-a-payment opportunities give dedicated and consistent members temporary relief in times of need or after times of peak spending.

Credit line increases, account activations and loyalty programs work to grow profitability and build credit card retention rates. Ready to implement proven strategies that enhance growth and boost the value of member relationships? Learn how Trellance’s Card Portfolio Growth experts collaborate with credit unions or contact Trellance to find a solution for your financial institution.

Technology Blog

You now have more information at hand about your credit union than ever before. But are you using it to “out-think” your rivals? If not, you may be missing out on a potent competitive tool.

This blog will:

  • Educate subscribers about data integration and Big Data and Analytics.
  • Provide tips and best practices.
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  • Share ideas and expertise.

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