LAS VEGAS–Credit unions are almost as overwhelmed with discussion of data analytics as they are by the volume of analytics itself: so how can they put it into practice?
Some answers were provided by Emily Engstrom, director of client success with CUNA Mutual Group, who offered some strategies and a case history to the annual meeting of the CUNA Marketing & Business Development Council meeting here.
Engstrom urged CUs not to begin with the data, but instead with the problem for which the credit union is trying to solve.
In looking to use cases, a common issue is member attrition, according to Engstrom, who said many marketing execs wrestle at every month-end with why members left. “It’s about what’s in the data that can predict the member’s likelihood to leave. What are the small incremental things your members are doing that are causing them to potentially leave the CU or reduce in value?”
The other issue CUs raise, of course, is what Engstrom called the “Holy Grail,” indirect members and turning them into active members.
Member Attrition
“When you can really understand the member data you can better engage to bring them back into the credit union,” said Engstrom. “You want to identify your highest value members who have the propensity to leave, versus your lower value members.”
But it’s not just about understanding the data and having a strategy, she said; there must also be a strategy on how to execute on the data. “And this is where marketing is really important.”
“When we work with credit unions, we see varying results on actually executing on the data,” said Engstrom. “How engaged the marketing team is in data analytics is really the precursor to how successful they are going to be.”
A Ton of Data
Engstrom noted CUNA Mutual has access to a “ton” of member data from third parties, due to the company’s scale, including behavioral analysis and member attributes related to insurance products. The pool includes 59-million members.
Members can fall into 54 different segments as defined by AdvantEdge Analytics.
Initial Steps to Take
Engstrom said there are some small initial steps every credit union can take when it comes to analytics, including:
· Pull a query on ACHs. “Know where your members are spending and sending their money, and how to engage with those members to keep the funds here, to keep the loans here, and reacquire them,” said Engstrom.
· Pull credit card transactional data as another source of terrific information. Knowing a member is shopping at Home Depot or Lowe’s signals potential home improvements may be under way, said Engstrom.
· Pay attention to threats to interchange, such as members who use Target’s Red Card or who purchase quite a bit from Amazon, which is partnering with American Express. Engstrom suggested offering rewards points for Amazon purchases using the credit union’s card.