CHARLOTTESVILLE, Va. (8/5/08)--Last month, UVA Community CU, Charlottesville, Va., reported the lowest member turnover rate in the last six years. This could be because UVA Community, which reported a 3% increase in membership from 2006 to 2007, takes a proactive approach in growing its membership--and learning why some members leave. This is the sixth installment of News Now's Membership Growth series of interviews with fast credit union membership growers. The series is as part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. It focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. The $373 million-asset UVA Community CU performed an analysis of accounts closed by members to find out what traits members who left the credit union shared. There was some concern that the number of closed accounts was increasing because members were dissatisfied with the credit union’s services, Peter Holman, UVA Community CU senior financial analyst, told News Now
. However, the account analysis showed that wasn’t the case. About 85% of members who closed accounts did so because of factors beyond the credit union’s control--such as relocation. The account analysis looked at members’ traits and account transaction activity. It reviewed the services they used, the balances they kept, and the branches they visited. With this data, the credit union identified several key traits of members at risk for leaving. These members:
* Had used two or fewer services with the credit union; * Experienced steadily decreasing balances; and * Held no loans with the credit union.
Products and services that correlated with members having “sticky” accounts, or close relationships with the credit union, included debit cards, credit cards and money market accounts. “Credit cards are very good retention products for us,” Holman said. UVA Community CU also surveys members who close their accounts at the credit union to see if the closed accounts are avoidable. The response rate on the surveys is strong, making the data reliable, Holman said. The closed account survey was recently revamped from a fill-in-the-blank format to multiple choice and other formats. In the old fill-in-the-blank survey, there’s little incentive for the member to fill out the survey, Holman said. “We made the survey simpler,” Holman said. “There’s more info [for us] and much less effort on the member’s part.” Even though UVA Community CU’s name implies the University of Virginia, the credit union doesn’t target students as members. “We’re not close enough to serve them,” Janine Williams, vice president of marketing, told News Now
. “We have a branch near the university and an ATM, but we’re not their [primary] banking institution.” UVA Community CU was founded in 1954 by a group of UVA hospital administrators. The credit union merged with other hospital and local government credit unions, and received a community charter in 1997 and changed its name to UVA Community CU. It currently serves seven counties. UVA’s growth strategy involves building locations in the seven counties to accommodate members. Its marketing strategy is to attract members to the branches, Williams said. The credit union opened a new branch in the first quarter of this year, and relocated two others. Holman and Williams commented that almost all of the credit union’s service goals were met because of the new facilities. To promote the branch opening and incentives, the credit union sent letters to members who lived within five miles of the new branch. Grand opening ads were published in local newspapers, and oversized four-color postcards were mailed to every resident within five miles of the new branch. UVA Community also ran a student photo contest in local high schools. The winning art was professionally framed and placed in the new branches. “The unveiling of the winners was the focal point around the grand openings and ribbon cutting ceremony. We actually had many parents stay after the event to open accounts,” Williams added. The credit union is working to secure land for a branch in another county, and a student-run branch will open this fall at a local high school. “They approached us,” Williams said of the school. “It’s great.” UVA Community CU has decreased its use of media advertising, and has earmarked that money into incentives for members to open accounts--such as $50 for a checking account. “The incentives drive those numbers,” she said. In March, the credit union opened a business lending program to include deposits. Though it has engaged in business lending since 2005, the credit union now offers businesses three types of checking accounts. “Every business is different,” Holman said. “So we have three accounts for different levels of activity with benefits in all three,” he said. The economy is an uphill battle for the credit union in terms of growth, but the challenge is making sure the word is out that the credit union is there. “We can’t just build and [assume] they will come,” Williams said. Several community banks operate in the area. When banks merge into larger ones, the credit union often sees a spike in membership. UVA Community CU doesn’t have formal initiatives to target youth, but is cognizant of the fact that young people will be the key to membership growth. The credit union keeps its technology services up-to-date, knowing that online technology attracts youth. “We’ve enhanced our bill payment and e-statements,” Williams said. “We are on the cutting edge of technology.” Service is one thing that sets credit unions apart from any other institution, she said. “Generally, services are going to keep us in the game,” she said. Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at email@example.com.