The United Nations Federal Credit Union used a savvy, three-pronged push to raise awareness among affluent travelers about its new chip credit card — the first in the U.S.
With more than 94,000 members spread across the globe who are among the most frequent travelers in the world, the United Nations Federal Credit Union (UNFCU) recently found itself in need of a direct marketing campaign whose reach rivaled its own.
An in-depth survey of its members had convinced the nonprofit to expand its offerings to include a “chip product,” essentially a credit card featuring an embedded computer chip along with a magnetic stripe typically used solo to verify a cardholder’s identity. Chip-based smart cards dominate overseas, a preference fueled by the cards’ ease of use and ability to counter fraud. As a result, smart cards continue to migrate to U.S. shores.
The move to a smart card aligned perfectly with the needs of many of the credit union’s members, explains Jamie O’Donnell, CRM and research manager at the UNFCU.® “Our members travel the globe and are often on missions to various duty stations and humanitarian aid zones. Chip products are very commonly the only cards accepted at points of sale, such as automated kiosks,” he says. “For example, at railway stations there are unattended ticketing machines or kiosks where you purchase your ticket.
Those machines only accept payment cards with a chip feature. If you do not have one, you wouldn’t have access to your railway ticket.”
The global convenience and increased security of the new credit card, which UNFCU brought to market as Visa Elite in collaboration with Dutch firm Gemalto, First Data and The Members Group (TMG), became the centerpiece of a multichannel, data-driven campaign, initially targeting the institution’s approximately 5,000 Visa Platinum card holders and 23,000 of UNFCU’s members. O’Donnell says savvy data mining helped pinpoint the habits and taste preferences of members most likely to buy into a credit card made especially for their frequent global travel needs.
“We were using targeting variables that included everything from demographics to psychographics to life stage descriptors,” he says. “We set up sub-segments of the target audience, looking at the types of publications they read, travel patterns and destinations they desire. And we utilized internal transaction data to look at which of our other products and services they were already using. By the time we went to launch, we already had a clearer understanding about which of our members would be most likely to respond to the offer and apply for the new product.”
To push the message, UNFCU marketing officials turned to a tailor-made three-pronged appeal, with direct mail as the main driver, supplemented by elaborate digital outreach and strategic placement of collateral materials in credit union branches in New York and representative offices in Austria, Switzerland, Kenya and Italy.
While the integrated approach was not new for UNFCU, the rapid rate of response was a complete and rewarding surprise, well beyond the industry average of 0.5% and the financial institution’s own internal projections of a 1% response rate. Prior to launch, marketing officials had benchmarked their predictions of successful response rate against industry averages compiled by the Direct Marketing Association.
“It was extremely well received within the first two weeks of launching.
The numbers kind of speak for themselves,” notes O’Donnell. “We received a 3% response rate to our direct mail pieces. Most card issuers, particularly the large-scale card issuers out there, are lucky if they receive a 0.5% response rate.”
Another sign of the 12-week campaign’s success: UNFCU witnessed a 300% increase in the year-over-year volume of applications received — although the credit union had been predicting only a 50% uptick.
The globe and mail
O’Donnell insists direct mail made the campaign matter: “It really was the driver to our response rate. E-mails are popular, but when we have a very niche segment that we are targeting, e-mail open rates skew much lower than what our standard direct mail response rate would produce. And our click-throughs on e-mails are also much lower due to the fact that our members are spread globally and some of them may not have access to the Internet. So direct mail really was crucial.”
By design, the credit union opted for a bit of flash with the mail pieces. Each envelope showcased a photo of the actual card design “that really resonated and initiated people to open the envelope to see what was on the inside,” says O’Donnell.
Now, O’Donnell says the credit union is facing the challenge of keeping pace with the very benchmarks set by its Visa Elite smart card campaign. But O’Donnell says UNFCU isn’t worried. “We were glad to have led the way toward the introduction of the new smart card technology in the U.S. for our members for the benefit of all.”Case Studies, Printing, Strategy, Targeting, Technology, Trends