How Much Are You Willing To Spend
For New Members Continued... Page 2
Gift & Gift Card Rewards: Gifts can include imprinted credit union items, including backpacks, clocks, flashlights, coolers, or household items; like indoor waterfalls, planters, etc. There are also companies that offer gift catalogs according to tiered reward amounts. For example, all gifts in one catalog would have a perceived value of $20-$30 dollars but cost your credit union about $15 each. Other incentive options include prepaid, co-branded gift and gas cards.
Special Loan Discount & Saving Rewards: A limited time loan discount and/or savings rate opportunity is another effective incentive. In fact, most new members join a credit union because of a specific loan, service or investment offer.
When you are deciding how much your credit union is willing to pay for one new member you should consider that companies in other industries are investing from $40 to $300 or more to convince potential customers to switch to their services. When you consider that your credit union can build a relationship that can last a lifetime, or at least the average membership life span of 12 to 14 years, investing more now to attract new members makes sense.
It is also important to note that when the value of the premium is increased, the total cost of the promotion is higher only if it is successful. However, when the perceived value is low, the response rate in is almost always lower and the overall cost of the promotion can be higher. Simply put, the more you give, the more you can get.
Source: Target Marketing Magazine and The Credit Card Industry Report by Fouad H. Nader.