During this period of historic federal rate hikes,1 your members may be asking themselves some important questions. For example:
- Is it time to refinance my adjustable-rate mortgage?
- “Should I use my home equity to pay off credit card debt?
Member questions like these and others present unique marketing opportunities for your credit union. Here are four proven ways to answer them.
1. Mine member data to identify opportunities
How are rising interest rates impacting your members? The answer is readily available in your member data.
- John has an adjustable-rate mortgage (ARM). This is an opportunity to communicate the risk-reducing
benefits of a fixed-rate mortgage. - Jane has a 62% loan-to-value ratio (LTV). This may be a good time to access some of that equity for high-interest debt reduction or a major purchase.
According to Rich Smith, Chief Marketing Officer – Home Loans at PenFed Credit Union, “The data is out there. You just need to know how to find it and use it to grow your business.”
2. Turn this member data into actionable answers.
Don’t just tell your members that a new home loan makes sense. Show them with specific end benefits based on their individual member data.
- Show John what his adjustable rate is, how high it could go over the next few years, and how much he could save by locking in a fixed rate now.
- Show Jane how much of her home equity she can access now, and what she can do with that cash.
McKinsey research shows organizations that effectively leverage creativity and data in tandem have growth rates twice as high as those that don’t.2
3. Prove you have your members’ best interests in mind
Don’t just say you are here for your members. Prove it with personalized offers based on each member’s individual circumstances.
- Provide John with a detailed overview of his refinance options. Quantify each scenario with specific rates, terms, payment amounts, and estimated savings based on his current home loan.
- Present all of Jane’s options for accessing her home equity – cash-out refinance, HELOC, home equity loan – outlining potential pros and cons of each.
Research shows personalization has a direct impact on consumer behavior.3
| 76% of consumers are more likely to purchase from an organization that personalizes | 78% of consumers are more likely to repurchase from an organization that personalizes | 78% of consumers are more likely to recommend an organization that personalizes |
4. Update members’ personalized offers early and often.
In an environment where mortgage rates can change daily (and sometimes twice a day), it’s important to keep members informed. This is particularly relevant for members who may be shopping around with other lenders.
- If the Fed is expected to raise interest rates at their next meeting, let John know that now may be a good time to lock in a fixed rate.
- As Jane’s LTV continues to grow, send her updates on how much more of her home equity she can access.
The bottom line: Every rate environment presents credit unions with unique member marketing opportunities. The key is knowing how to identify them, and what to do with them when you do.
1. https://www.forbes.com/advisor/investing/fed-funds-rate-history, accessed 12/12/22
2. mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-most-perfect-union, accessed 10/12/22
3. mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying, accessed
10/12/22