10
Jun
2008
Is Discover more thrift oriented than credit unions?
So credit unions are supposed to help their members be thrifty and spend their money wisely. That is such an important topic that companies like Jwaala have built software solutions to help CU’s achieve that goal and the Partnership Symposium has invited a guest speaker for that topic. So tell me why I see things like this:
Shouldn’t we be seeing stuff like this from credit unions? This is a major differentiator for credit unions and it seems that we are letting banks play the thrift and savings card better than we are. We’ve got to step up and help our members before the banks lure them in with tools like this. And then charge them 36% interest on their credit cards.
Yeah, but what’s the ROI?
Ron, you aren’t supposed to comment under other people’s names!
@Brent: Great question!
But in this case, I would argue that the Discover Paydown Planner is a good move, regardless of the DIRECT ROI.
Discover’s Paydown Planner is a great differentiating tool that helps them distinguish themselves from other card issuers who often come off as just pushing their customers to spend spend spend — even if they shouldn’t be spending more.
It’s also a tool for engaging customers, and gives Discover information about customers that they might not have been able to obtain otherwise.
If Discover is able to better retain cardholders and possibly make their card their customers’ top-of-wallet card, there may very well be an attractive ROI here.
Great idea. We are working on something similar, but a little more general. Basically something to allow you to plan to meet goals…
- payoff credit card
- shrink your starbucks spending
- achieve a networth target
It’s really pretty darn cool.
sorry, forgot the website
Rob, I have to say that I haven’t seen this Discover campaign but it reminds me a little of the tobacco and beer sellers who launch campaigns which encourage “responsible” drinking and smoking.
I can’t imagine the expense associated with that program being extreme. The actual ROI probably wouldn’t be that bad. And I agree with Ron, the differentiation aspect of the program is the most important. It makes them look a little more human. But you can take that with a grain of salt. As Ginny said, it is exactly like the alcohol companies and their drink responsibly campaigns.
Makes me think of Arkadi Kuhlman’s CUES Experience keynote, his determination to help people of modest means save, pay off their mortgages, etc. SO CU-like, but ING DIRECT is an S&L!
Bank of America’s keep the change program and Discover both make me sad…..if our values were truly practiced, and well, VALUED, we would’ve been doing this constantly. Not just when the country’s economy (and American households) are in crisis.
It’s time to at the very least BALANCE our promoting debt with promoting thrift.
Great post.
Thanks for posting this item, I think it’s definitely something CU’s should be looking at. While Direct ROI obviously isn’t Discover’s main focus, it’s an idea that will make them stand out in the marketplace.
I think the alcohol company analogy is spot on in this case, but that just means to me that CU’s can do it much better. It’s a lot easier for us to claim that we are trying to help people manage their finances, and this could be a great way to do so.
Imagine a member thinking that their CU really does know how to help them plan for the future.
I work for a credit union in Pennsylvania in the indirect lending department and I am in connection with someone who
developed an indirect lending blog in order to find
feedback from other people in the program. The blog
deals with pertinant information and up to date news
on the automobile industry. You can find it at
http://www.cuindirectlending.org/
We would like to invite you and any others in the indirect lending program to take a look and perhaps leave feedback on some of the topics. Thank you for your consideration.
Jodie Zeigenfuss
I must say, watchting the demo, this is a great concept by Discover — they are not only helping you pay off your card, but helping you spend on it at the same time! How do they do that?
I personally feel we do not promote thrift enough. Time to take action!
My thought is that most CUs don’t have the experience to develop things like this internally. They barely can staff someone comparable to run their IT systems. CUs are at the mercy of their vendors and considering most of their vendors don’t innovate like members need, it puts them in what programmers like to call a ‘DO loop’.