A Coastal FCU member and her VIP Program check.
RALEIGH, N.C.—The strategy for driving additional relationships with members remains through their checking accounts.
That is the opinion of the $2.3-billion Coastal FCU, which last year paid $2.1 million to members through its VIP Program. The VIP Program rewards those who have their primary checking account at Coastal. Members qualified as VIPs by performing 144 withdrawals from their Coastal checking accounts during 2014.
VIP members then had the opportunity to earn Loan Rebate Dividends and Deposit Bonus Dividends by also having either two or more loan types, or two or more deposit types. Loan Rebates were based on interest paid during 2014, while Deposit Bonuses were determined by average balances.
“We wanted more core members making us their PFI, and we determined this was the best way,” said spokesperson Joe Mecca. “An active checking account indicates members are doing most of their financial business with Coastal. They key is those 144 withdrawals.”
Coastal breaks down the VIP payout in tiers. Those who perform the needed 144 transactions, at minimum, are paid $100. “That is the least a qualifying VIP member is paid,” said Mecca. “We wanted the payout to be at least meaningful for everyone.”
Loan Rebates are paid based on an aggregate of loan interest payments, on the following scale: Members paying $250-$2,499.99 in interest are rebated $100. Those who paid $2,500 - $4,999.99 receive $200; $5,000 - 9,999.99 in interest returns $300, and above $10,000 delivers $500 back.
Chuck Purvis, Coastal FCU
On aggregate deposit relationships, $5,000 - $24,999.99 delivers $100; $25,000 - $99,999.99 gets $200; $100,000 - $199,999.99 returns $300; and above $200,000 $500 is paid. CCU’s website features a dividend calculator to help members determine what their final payout will be.
Mecca said the credit union felt a lump-sum payout at the end of the year is the best way for the credit union to leverage a member giveback program.
“We discussed different ways to reward members, such as rate specials, lower fees, etc. Those are nice benefits, certainly. But a few dollars a week deposited into someone’s account does not have the impact and get the attention of, say, $200 at the end of the year.”
The program is having its desired effect—getting more members to call Coastal their PFI, said Meca. In 2011 the CU had under 55,000 VIP members; that number has now reached 58,331.
“We are pleased with that growth,” said Mecca who added that the number of VIPs qualifying for the payout is rising as well.
In 2012 6,932 VIP members received the payout, 8,200 in 2013, and 9,072 for 2014.
“We jumped from 12.6% of our VIPs being paid for the year 2013 to 15.5% this past year,” said Mecca.
The CU has paid out $7.1 million over the last four years.
“Member giveback is a core component of who we are as a cooperative,” said Chuck Purvis, Coastal’s president and CEO. “Whether it’s issuing a large dividend or simply saving members a few dollars every day, Coastal’s purpose is creating financial win-win situations for our membership. We focus on providing consumer-friendly products and services, and when we’re successful, we can share even more with the members whose active participation in the credit union drives that success.”