How TruS­tone is us­ing data to drive more auto loans

CREDIT UNION: TRUS­TONE FI­NAN­CIAL FCU CAT­E­GORY: AUTO LOAN RE­FI­NANCE NOM­I­NATED BY: TRUS­TONE FI­NAN­CIAL

Credit Union Journal - - Special Report - BY W.B. KING

BY TRAN­SI­TION­ING ITS MAR­KET­ING AND com­mu­ni­ca­tions depart­ment to a “data-driven” mar­ket­ing team, TruS­tone Fi­nan­cial Fed­eral Credit Union has been able to in­crease its auto loan pen­e­tra­tion rate.

“TruS­tone Fi­nan­cial’s 2016 auto loan pro­mo­tion was the first op­por­tu­nity our team had to use a more com­plex, data-driven ap­proach as part of a largescale prod­uct ac­qui­si­tion pro­mo­tion,” said TruS­tone Fi­nan­cial’s Mar­ket­ing and Com­mu­ni­ca­tions As­sis­tant Man­ager Amanda Bar­don­ner.

The goal was to in­crease the Ply­mouth, Minn.-based CU’S auto loan pen­e­tra­tion among cur­rent mem­bers, which in­cluded of­fer­ing a new rate struc­ture dur­ing an auto loan pro­mo­tion.

“In­stead of pro­mot­ing a low teaser rate that is only of­fered for a short term length, we opted to re­duce the low­est rate of all four credit tiers and of­fer that rate across four term lengths span­ning 32 to 60 months,” said Bar­don­ner.

In or­der to ef­fec­tively im­ple­ment the so­lu­tion, the mar­ket­ing team had to iden­tify a seg­ment of cur­rent TruS­tone Fi­nan­cial mem­bers who did not have an auto loan with the credit union. The ag­gre­gated in­for­ma­tion was then sent to the credit bu­reau where third-party data was cross-ref­er­enced with mem­ber records.

“The credit bu­reau data helped iden­tify mem­bers who had an auto loan with an­other fi­nan­cial in­sti­tu­tion, fi­nanced at a rate at least 0.75 per­cent higher than the rate they were pre-ap­proved for with TruS­tone Fi­nan­cial,” noted Bar­don­ner.

In part­ner­ship with other de­part­ments, Bar­don­ner ex­plained, the mar­ket­ing depart­ment de­ployed a three­p­ronged strat­egy to ef­fec­tively de­liver the pre-ap­proval of­fer to mem­bers. The strat­egy in­cluded a per­son­al­ized email, di­rect mail piece and out­bound mem­ber con­tact.

“Utiliz­ing the credit union’s CRM sys­tem, the mar­ket­ing team as­signed qual­i­fied leads from the pre-ap­proval list to branch and lend­ing staff for fol­low-up,” said Bar­don­ner. “The out­bound lead ef­forts al­lowed for more di­rect con­ver­sa­tions with mem­bers about how an auto loan pre-ap­proval could po­ten­tially im­pact their bud­get and fi­nan­cial goals.”

Over the course of an eight-week auto loan pre-ap­proval process, TruS­tone Fi­nan­cial helped 110 mem­bers from the pre-ap­proval list re­fi­nance their ex­ist­ing auto loan into a lower rate and term that com­ple­mented their bud­get.

“On av­er­age, TruS­tone Fi­nan­cial helped these mem­bers save $634 in in­ter­est over the life of their loan,” said Bar­don­ner. “Ad­di­tion­ally, the av­er­age in­ter­est rate sav­ings was 2.35 per­cent amongst those who re­fi­nanced.”

Cer­tain mem­bers re­al­ized sig­nif­i­cant sav­ings, in­clud­ing 11 mem­bers who were able to re­duce their rate by more than five per­cent, with one mem­ber de­creas­ing his rate by 14.86 per­cent and an­other by 12.85 per­cent.

“For these mem­bers, we helped them save thou­sands of dol­lars in in­ter­est pay­ments over the life of their loan,” said Bar­don­ner.

Trus­tone Fi­nan­cial’s Lyn-lake Minneapolis branch, lo­cated min­utes from down­time Minneapolis in the Lyn-lake neigh­bor­hood.

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