The holidays are the biggest time of year for consumer spending. Between Black Friday, Cyber Monday and Small Business Saturday, credit unions will see a huge spike in spending among their members, making it a unique opportunity to boost their credit card programs.
In fact, Adobe Analytics research reports that 2017 U.S. Black Friday sales reached a staggering $7.9 billion, a year-over-year increase of nearly 18 percent. And according to ShopperTrak estimates reported on CNBC, Black Friday 2018 is once again expected to be the busiest shopping day of the year, and “by far.”
We saw how effective a good promotion strategy can be for credit unions during Amazon Prime Day, with Goldenwest Credit Union reporting a 127 percent increase in Prime Day activity thanks to a layered promotional campaign.
While it is essential to nurture cardholder engagement well in advance of the holidays, there are steps credit unions can take right now to increase their share of card transactions on Black Friday, Cyber Monday and beyond.
Here are CO-OP’s top four strategies to help you stay top-of-wallet this holiday season:
Step 1: Customize Your Rewards and Promotions Based on Member Data
To keep their credit cards top of wallet beginning Black Friday, credit unions should leverage their data to see where members typically spend during the holidays and construct rewards and promotions accordingly.
Research has shown that rewards are very important to many cardholders. According to the J.D. Power 2018 Credit Card Satisfaction Study published on creditcards.com, “forty-seven percent of users who switched to a new card in the past 12 months did so for better rewards.”
While gift cards, merchant-funded rewards and travel discounts have widespread appeal this time of year, cash is always king – so any kind of cash-back reward is enticing to members.
In fact, TSYS 2018 research shows that cash rewards are the most popular type of rewards, even outpacing miles – which made up 21 percent of overall credit card spending in 2016 while cash made up a full 27 percent. And “cash strengthened its lead over gift cards, travel and other rewards in 2017,” the article notes.
Use the wealth of information hidden within your members’ transaction histories to uncover new growth opportunities as well. Presenting unexpected offers that reflect their behaviors and preferences has proven to delight cardholders and inspire them to transact.
And CO-OP can help. This is exactly what our SmartGrowth consultants do with turnkey campaigns and portfolio analytics solutions.
Step 2: Develop a Communications Plan
Throughout the holidays the card offers are rich and loud, and in consumers’ mailboxes daily. Credit union campaigns need to rise above the noise to attract their members’ attention.
According to The Financial Brand, a marketing campaign must achieve “effective frequency” – or a certain number of impressions – to grab consumer attention and get that consumer to take action. Based on recent Microsoft research, the article notes, “the optimal number of exposures required for audio messages . . . is between 6 and 20.”
For credit unions with an e-mail marketing tool, setting up a regular set of communications can dramatically boost success by keeping your credit card product front and center with members.
In order to maximize the opportunities this season, credit unions should also launch a robust communications plan that achieves “effective frequency” across channels, including direct mail, digital advertising, in-branch collateral and ATM messages.
Credit unions should also use data to personalize their communications to members. Messages such as “You’ve spent 50 percent of your next rewards level or goal” have proven to increase card usage.
Another strategy that works is to change the imagery based on the spending habits of that member. For example, if the credit union has identified a segment of cardholders with a lot of travel spend, then the photos on these e-mails could be travel related to increase their appeal.
Step 3: Play to Your Strengths: Service and Community
Credit unions are often selected by members because of their high service orientation – so, as an added service this time of year, take the opportunity to educate members on financial wellness.
According to NerdWallet research, more than a quarter of Americans who shopped during the 2016 holidays had no budget, and 24 percent went over budget. Articles placed in direct mail and e-mail campaigns on how to develop good spending habits resonate with members. Include your best balance transfer offers there as well.
Showcasing your community relationships is also effective. Members of your credit union value your community tie-in, so include rewards, offers and promotions for the local merchants members shop, and have a special ‘Small Business Saturday’ promotion to celebrate their importance to the community.
Step 4: Keep the Momentum Going
Remember also that Black Friday and Cyber Monday will come and go quickly, but holiday spending extends all throughout the season. Following up with social media posts during the entire month of December can help keep cardholders transacting.
Social media campaigns are powerful and simple to manage. So is posting ads on your website. Even if you are not driving members back to a blog or landing page, a presence in social channels can generate member awareness and boost card program performance.
Finally, take this opportunity to test the market. Don’t be hesitant to try a new promotion or campaign. With so much spending going on during the holiday season, you might just stumble on your most successful engagement strategy yet.
Staying top-of-wallet during the holidays and beyond requires deep insight into your members and a thoughtful marketing strategy. CO-OP’s SmartGrowth team can help you achieve just that. Contact us to learn more about our Engagement and Loyalty solutions.