‘Rewarding’ Members and Employees Drives 23% Jump in Credit Outstandings

Offering rewards points to members and incentives to employees generated 23 percent growth in credit outstandings at Neighbors Credit Union, St. Louis, Mo. Just a few years ago the program was stagnant. Managers decided that a modest investment would generate substantive results and they were not disappointed. Neighbors CU’s credit balances jumped 23 percent, from $8.6 million to $10.5 million in 2006.

The credit union implemented CURewards™ from PSCU Financial Services and converted most of its Classic and Gold VISA accounts to the Platinum level. “Adding the popular CURewards program generated excitement for our card offering. Our members also enjoyed the move ‘up’ to a Platinum card,” notes Eric Clark, the credit union’s Vice President of Lending.   

Rewards points also play a pivotal role in member promotions. The credit union now offers periodic promotions for balance transfers, new accounts and retailer-specific purchases. For example, cardholders earned double rewards points during May and June for every credit charge at selected retailer categories and a previous promotion awarded rewards points for every $5,000 in transferred balances. Cardholders who opened new accounts in February, March and April and transferred credit balances earned 500 rewards points for every $500 in transfers (up to a limit.)

Employee incentives are equally effective. The credit union added 149 new cardholders and $60,500 in balance transfers in the first quarter of 2007 by combining rewards points with employee incentives. “If your staff is excited about a promotion, their enthusiasm will generate member interest. It’s a win-win situation for everyone,” notes Kathleen O’Brien, Credit Card Manager.

In addition to rewards points and cash incentives for employees, O’Brien has designed  innovative promotions that leverage favorite family pastimes like eating out or attending professional baseball games. “We have already given away movie and restaurant passes and this summer we are running a promotion in which ‘runs’ are awarded for enrollment in auto-pay or insurance policies, as well as new accounts and balance transfers. The employee with the most ‘runs’ at the end of the month earns free tickets to a St. Louis Cardinals game,” explains O’Brien.

The credit union is also using PSCU Financial Services’ Adaptive Control System (ACS) to automate credit line increases and handle reissues. ACS applies an analytical model to evaluate cardholder accounts and reflect positive and negative changes in an account.

“While we have witnessed the sale of credit portfolios, we believe that credit cards are a fundamental building block in attracting and retaining members,” said CEO Larry Giesing. “Our experience validates what PSCU Financial Services has been saying for years: adding a popular rewards program and offering employee incentives does generate immediate and significant returns for a credit card portfolio.”