Your MCIF offers world-class power. Here are six tips to make it work harder for you.
By Jamie Swedberg
December 31, 2009
Editor's note: The following first appeared in the January 2010 issue of Credit Union Management.
Marketing customer information file systems can be immensely useful. They are massive member files, compiling all kinds of information into a single database so credit unions can look at members by their total relationship with the institution, rather than by individual products, such as checking accounts or loans.
MCIF systems are particularly well loved in marketing departments, because they can help marketers identify cross-selling opportunities, target direct-mail campaigns more accurately, and figure out which members are the most and least profitable.
"MCIFs are wonderful tools to get greater insight on your members' behavior," enthuses Anne Legg-Upson, VP/marketing at $193 million/22,000-member Cabrillo Credit Union in San Diego. "You can mine for trends, gain historical perspective, generate leads for business development, and do some general forecasting."
Many credit unions, such as $838 million/62,000-member University of Iowa Community Credit Union, Iowa City, Iowa, use their MCIF systems to generate mailing lists for short- and long-term marketing campaigns. "We've had our Raddon Integrator system for at least nine or 10 years," says Jim Kelly, SVP/marketing. "There are standard monthly mailings we'll do for, for example, onboarding new members. We might send one letter out to new members who open up a checking account and a different letter to new members who come to us through indirect lending. There might be different messages to those two different groups. Or we could send a different message based on age, for example."
But as Kelly and many of his peers know, using an MCIF just for mailing lists is like hiring Serena Williams to hit balls with your grade-schooler. Yes, Ms. Williams can do that very well, but for the amount you're paying, you really ought to ask her to work a little harder.
"Most credit unions could definitely be doing more," says Kevin Stang, VP/marketing for Matrix Manager a Roseville, Calif., marketing campaign solutions provider. "I would say, having worked pretty closely with over 100 MCIF users, maybe five in 100 are definitely getting the most usage out of their MCIF system."
How can your credit union do the same? Vendors and credit union executives offer their hints below.
Train Multiple Individuals.
The "numero uno" cause of credit unions not getting the most out of their MCIF is employee
turnover, says Stang. "If you look at the marketing analysts who are actually the operators of the MCIF system, they tend to be promoted or find another job after three years," he points out. "By the time they ramp up and become comfortable pulling some reports and lists, they are already at their next job. They never, ever get to the point where they're using the more advanced functions of the system."
Something similar happened at Burnsville, Minn.-based $802 million/73,000-member US Federal Credit Union. Business and Community Development Specialist Rachel Gronewald became the MCIF point person when a colleague vacated the position. She had a little training under her belt, but she had to figure out a lot of it on her own.
"The person left to take another job, and we had to minimize expenses, so we weren't in the market to hire for another one," she recalls. "I was interested in it and I knew I enjoyed the research portion, so it came to me. I'm able to give some time to it while doing my other job."
David Rybinski, director of operations for the financial intelligence business at CUES Supplier member Harland Financial Solutions, Lake Mary, Fla., says that's the reason his organization tries to always train at least two CU employees: a primary user and a backup.
"As we start doing implementations, that's one of the first things we say," he says. "One, you have to document your process, which is very critical; and two, you have to make sure you don't have a single point of failure if a person leaves the organization."
Ideally, he prefers to teach others in the CU, too. For example, with a little bit of training, branch managers can go into the system and mine their own data. They're not dependent on one individual at the main branch for their lists or data.
Kelly hasn't trained his branch managers in actually using the MCIF system, but he does meet with them from time to time to help them understand what the system can do for them. He explains: "I might say, 'Listen, if you ever wanted a list of members within a two-mile radius of your branch who use your office but do not have checking, we can generate that for you. Or if you want to attack people who have gotten a checking account recently at your office but don't have a credit card, we can generate that list for you.'"
Cabrillo CU has been using MCIF for about 14 years, and is currently in the middle of migrating from one vendor to another. Legg-Upson feels it's crucial to share the system's capabilities across the organization. "I don't think anybody ever works in a silo," she says. "I think there are incredible benefits and rich rewards when you share. Reports are easy to generate. They could do their own branch accounting analysis, or see how their branch's members responded to an auto loan offer. I think anyone who has member contact could benefit from knowing a little about MCIF."
MCIFs are great at determining who should receive a marketing message. But if you also use them to analyze the results afterward, you can hone your marketing tactics over time and achieve better share of wallet.
"One of the main things that an MCIF could be used for is to teach the marketer who responds to their offer," Stang says. "You do that by tracking marketing campaigns-something that many, many marketers are not doing. They could be their own best teacher and learn who they should really target for subsequent campaigns, and how. Compare one group to another. Compare letters to e-mail."
Many credit unions have a tendency to send a one-time credit card promotion to 10,000 of their 20,000 members, then congratulate themselves when they get a two percent response rate. But by analyzing the results of past campaigns, marketers can narrow the list down to the 2,000 best prospects, then mail promotions to them several times for the same amount of money as a larger mailing. There's a higher likelihood of getting the message to these prospects at the exact time they're ready to sign up.
"It all comes to being there and being top of mind when the member is ready to do business-not just when you are willing to accept that business," Stang says.
Focus on Your Mission.
While MCIF systems are great at answering practical, day-to-day questions, such as "Which members in this geographic area are between ages 35 and 45 and own a home?" they are also useful in measuring the credit union's progress on goals, benchmarks, and even expressing its brand identity.
"It's not just for targeted marketing," says Rybinski. "It goes beyond that to assisting in the meeting of strategic goals. It goes into trending and understanding the performance of the institution, then being able to translate back to tactical execution."
Dan McGowan, marketing director at CUES Supplier member Raddon Financial Group, Lombard, Ill., says that's why his company holds semi-annual workshops with the leaders of the organizations that use Raddon MCIF systems.
"They're called the CEO Strategies Group," he says. "Through that, and through our member-survey programs, the credit union strategy is refined and evaluated. Then we recommend tactical implementation. The clearer they are in how they want to grow, the better the folks who are using the MCIF system can use the tools."
Rybinski believes MCIF is exceptionally useful in realizing three of credit unions' most common strategic goals: organic growth, acquisition and retention.
"An MCIF provides a lot of value to being able to target specific tactical initiatives to execute on those strategies," he says. "In acquisitions, for example, we have a few customers aboard who are using their MCIF system to better understand the new member base coming on. You generally want to target that new member base differently than you target your existing member base. You want to make sure that you're building the relationship first, before you really go after other opportunities from a cross-selling standpoint."
It works on smaller-scale goals, too. Cabrillo CU's Legg-Upson advises, "My suggestion for anybody who is using MCIF would be to say, 'What are the seven things, or maybe 12 things, that I want to get out of it? What can I learn from it that will make my job better?' For example, in the credit union business model, we make money off the loans. So how are my loans being used? Where are they being used? You can make decisions off of that information."
If salespeople are trained to use the MCIF system, they can use it on an intimate, tactical scale. Kelly suggests getting sales staff excited about the capabilities of MCIF, because it can help them measure their progress against performance benchmarks.
"Each of our branches has five primary goals: loan growth, deposit growth, checking growth, services per household, and certain [member] service scores they have to attain," he says. "These are sales-based initiatives. They have to be cross-selling, growing the institution, and serving the members, all at the same time."
While University of Iowa Community CU primarily uses its MCIF system for targeted marketing and reporting, Kelly also employs it for impact studies. For example, if CU execs are thinking of changing the price on a product, he'll check to see who has that product and what other kinds of relationships they have with the credit union. From there, he can project the possible impact of the change.
"Let's say we have an interest-bearing checking account, and at an asset/liability management meeting we all get excited, thinking that if we drop the interest rate a half percent, we're going to make a lot more money," he says. "I might pull a report to look at the entire household relationship for everybody who has that product. So I can see that while this particular account may not be that profitable for us, the rest of the relationships of this group of people that hold this account is extremely profitable. They've got a lot of loans, they've got a lot of credit cards, and whatnot. I almost use it as a defense mechanism from time to time; I can come back to the group and say, 'If you make dramatic changes, you may be endangering a bigger relationship.'"
Get Outside Help if You Need It.
Credit unions that are trying to use MCIF in a more strategic way (or even just to revamp their marketing campaigns) might do well to consult with experts, says Stang. Most vendors are glad to provide ongoing training to their customers. But there are also MCIF conferences to attend, and consultants who are skilled at using the software tools to maximum effect.
"It's a great idea to call a consultant, even if it's just long enough for the consultant to teach them the right way to use the system," he suggests. "[Vendors and consultants] carry the collective knowledge of hundreds of institutions that use MCIFs. If somebody came to me today and said, 'Kevin, I need to grow auto loans, and here's my budget,' I would tap into the collective knowledge of all the people we've worked with in the past and say, 'Here is how you should utilize your MCIF. Let's first look at some tracking-see who opens up your accounts. Let's see what demographic fields you have at hand. Oh, and you may want to do a pre-approval on this.'"
Credit unions that can't afford to hire a dedicated marketing analyst to run the system can go one step further, signing up for a service-bureau type MCIF option. Several major providers offer this service.
"The primary contact can call us up and ask us to run reports, and we'll do it for them," says Raddon's McGowan. "We'll even cut the mail list and send it to a direct-mail house. Another option is a more project- or campaign-based approach, where the organization may
want to focus on a need to generate loans or deposits, improve cross-sells, improve profitability, improve loan balances, or acquire members. We take an issue like that and implement a campaign around it."
A service like this is a good option for a smaller organization that either doesn't have the staff internally to manage it, or whose business model is to outsource non-core functions. Rybinski believes it's an option that may become more and more popular in the future, with CU staffers being stretched so thin.
Use MCIF to Find Opportunities During Hard Times.
During a tough market, it may be hard to find the time or personnel to devote to daily use of the MCIF system. But McGowan points out that MCIF can actually help credit unions get more accomplished with fewer resources. "Everybody right now is challenged with reaching their goals," he says. "But a lot of MCIF tools have campaign management features that allow organizations to really automate their marketing efforts. If you think of a drip campaign-you know, a systematic approach to getting messages in front of prospects-a lot of these things can be automated."
In addition, MCIF can help credit unions answer the tough strategic questions of the day. For example, many CU managers are concerned about how the FAIR Overdraft Coverage Act will affect their institution: How will they replace lost income and meet the challenges of the new regulatory environment? The MCIF system can be used for database research and analysis, to help refine products and look for additional income sources.
"When we talk to institutions, it's clear that the easy days are done and it's become a challenging environment in which to succeed," says Rybinski. "But in every downturn, there are opportunities. The MCIF is critical in understanding what those opportunities are and how to execute on them."
In other words, every time the credit union uses the system to refine its marketing campaigns or project the effects of a new fee, it saves money and protects the member relationship.
"From what we've seen in talking with credit unions, even in this environment and especially in this environment, the MCIF is critical to their success," Rybinski states. "Why? Because it is the repository of all of the information about the members, and the opportunities that reside there."
Jamie Swedberg is a free-lance writer based in Athens, Ga.
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