Expanding Relationships with Indirect Members

An added benefit of indirect lending is that a credit union can gain new members who sign up for an auto loan at the dealership. A key challenge is getting these newly acquired members to use the rest of the credit unions’ products and services.

 
 

Indirect lending continues to be one of the fastest growing areas for credit unions.  Indirect loans outstanding grew 25.9 percent between September 2004 and September 2005.  As of September 2005, 1,668 credit unions were offering indirect lending to their members, up from 1,446 one year ago.

In addition to growing auto loan balances, credit unions have also acquired new members through indirect lending.  However, a key challenge for many credit unions is getting these new members to use other credit union products and services.  In a recent survey of credit unions conducted for Callahan’s 2006 Auto Lending Report, only one respondent out of 42 rated themselves as successful in cross-selling additional products and services to members that joined through indirect lending (at least a four on a one to five scale from the chart below). 

While most credit unions reported little to no success in cross-selling to indirect members, a few effective tactics were reported:

  1. Pre-approved credit cards offers
  2. Direct Marketing with follow-up phone calls
  3. Auto loan discounts of 0.5 percent if member signs up for Direct Deposit and AutoPay

 

To learn more about effective strategies to get indirect members to become more active members at your credit union, check out our webinar on Effectively Cross-Selling to Indirect Members, brought to you by the Callahan Center for Credit Union Leadership and sponsored by Credit Union Direct Lending.

 

 

 

Jan. 23, 2006


Comments

 
 
 
  • Here here, Mr. James! If banks can win over the hearts of mankind with free toasters and foam footballs, just think what we credit unions could do if we effectively showed indirect members the many other benefits we have to offer! I was just speaking with a young chap who returned to his old credit union like a prodigal son searching for a lower rate on his car loan, but admittedly had no intentions of using the institutions other services. A bloody shame, wouldn't you agree? Yet another job well done with your poignant yet succinct article! Sincerely, Sir Charles Willowby
    Anonymous
     
     
     
  • Very Timely -- We are in the process of developing a similiar program. Judith Hillock
    Anonymous
     
     
     
  • Very timely and apprecited
    Anonymous