DES MOINES, Iowa (1/25/13)--Data analysis of card programs provides a "looking glass" into credit union member behavior and is key to mining long-term mutually beneficial relationships, according to a new white paper.
The paper is written by payments processor The Members Group (TMG) and its data analysis partner IQR Consulting.
While traditional member segmentation has largely been based on demographic information, data analysis focuses on member behavior, according to the paper, "Data Analysis Points the Way Forward for Card Management Teams." With an in-depth understanding of this behavior, credit unions can better identify patterns, and gain insight to develop effective campaigns for growth.
Data analysis has three components for card-management teams. First, issuers must capture pertinent fields of data. Second, they must analyze that data to both develop and test a hypothesis. Third, and most important, data analysis must lead issuers to an action--the "What next?" of portfolio management.
For many community-based card teams, increasing transactions among existing cardholders is a chief goal. The intent is not to encourage members to spend more money, but to become the member's card of choice. Credit unions and community banks can level the playing field between themselves and their large competitors for walletshare.
With member-level analysis, including statement and credit bureau data, credit unions can understand which members are most likely to generate the revenue needed to take a portfolio to the next level.