2 minutes
To gain more of their business, sweeten the pot
Does your credit union have an affluent membership?
Mastercard defines the “mass affluent” consumer as those who earn $100,000-plus in individual income or households earning $350,000 or more. Visa has a $100,000 floor, with the “mass affluent” cardholder earning as much as $150,000.
This group is one of the fastest-growing, most influential credit card segments in the United States, comprised of those who spend massive amounts via a premium card, an average of $18,000 annually—but virtually never carry a balance. “More striking is that growth for all credit card spend in the U.S. is accelerating towards premium card usage,” says Kenton Potterton, VP/solutions and consulting at CUES Supplier member PSCU, St. Petersburg, Fla.
But how can you woo them to your credit union’s cards?
The goal here is to compensate affluent members based on their depth of relationship, explains Tim Kolk, president of TRK Advisors, Peterborough, N.H. “Perhaps tie in spending on the debit side or add rewards based on other products they have with you. Offer points for the behaviors you prefer, like signing up for e-statements. Consider double points on bill-pay items. Or give bonuses based on overall relationship metrics. There are many approaches, often with accumulating rewards that form an aggregate pool from which the member can redeem.
Kolk also notes that while some CUs have developed tiered relationship programs, most haven’t differentiated between demographic segments like the larger, relationship-based banks where reward propositions feature escalating values based on the depth of the relationship. For example, a year-end 50 percent cash-back (or points) reward is not uncommon when certain relationship thresholds are met.
While card structures can vary, your offer must be robust, matching your affluent members’ lifestyles, their yen for service and concern for security:
- rich rewards, including points or cash back and intro sign-up bonuses, possibly tiered based on relationship;
- lucrative traveler perks, such as common carrier travel accident insurance ($1 million or more), baggage delay insurance, airport lounge access, companion traveler benefits, hotel perks and discounts, concierge service and 24/7 service options;
- luxury purchase or jewelry points, perhaps with extended warranties and purchase protection options; and
- ID theft protection and restoration options, credit score review and monitoring.
Stephanie Schwenn Sebring established and managed the marketing departments for three CUs and served in mentorship roles before launching her business. As owner of Fab Prose & Professional Writing, she assists CUs, industry suppliers and any company wanting great content and a clear brand voice. Follow her on Twitter @fabprose.
