usu credit union final paper

Strategic Planning and Execution Consulting Paper

Spring 2015

USU Credit UnionThe Aggie Card

Goldenwest

Jeff Frodsham, Taylor Harris, Ali Henze, Austin Johnson, Spencer Stevens, Logan Stodart

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Spring 2015

“USU Credit Union has a strong heritage and rich

association with Utah State University dating back to

1957 when the not-for-profit financial cooperative was

founded by two economics professors.”

-Kerry H. Wahlen, CEO

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Table of ContentsIntroduction:.........................................................................................................4History:..................................................................................................................4Research:...............................................................................................................5Marketing Ideas:..................................................................................................7

True Blue Pledge:.............................................................................................7Aggie “A” Plates:...........................................................................................10Season Ticket Holders:.................................................................................13Current USU Students:................................................................................15Faculty:............................................................................................................17

Suggested Card Benefits:.................................................................................18

What We Learned:............................................................................................19

Conclusion:.........................................................................................................20

References:..........................................................................................................21

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Introduction:

USU Credit Union (now a division of Goldenwest) has recently created a new

credit card called The Aggie Card. This credit card is designed to capture market share

and recapture current members’ interest. Among other benefits, The Aggie Card

specifically offers a cash donation to Utah State University at a certain percent of each

transaction.

As current students and future alumni of Utah State University, we offer a unique

perspective concerning effective marketing strategies. Together, we have analyzed five

different targeted groups of people; within those categories we have created a couple of

different marketing strategies aimed at growing demand for The Aggie Card. This report

includes a description of each of those targeted groups as well as the correlated marketing

strategies. Furthermore, we will discuss additional benefits that could add to the

perceived value of The Aggie Card for future implementation along with their associated

costs. A recommendation will be provided at the end of this report.

History:

USU Credit Union acquired its name from the institution that drives the Logan

economy, Utah State University. In 1957 two professors from Utah State University,

Vernon Israelson and Evan Murray, founded what would become USU Credit Union.

The Credit Union was created to provide banking services to the employees of Utah State

University.

While these professors doubled as loan officers to keep their costs low, the

organization grew in assets from $50,000 in 1957 to $1.22 million by 1968. Membership

in that same time period grew from 43% to 83% of all the employees at Utah State

University. Soon they began opening branches in Cache Valley: 2003, 2006, and 2007.

To provide members with a more robust portfolio of products and services, USU Credit

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Union merged with Goldenwest Credit Union in October of 2013. USU Credit Union, a

division of Goldenwest Credit Union, continues to serve Cache Valley.

Research:

Bank Rates Picture Fees Locations Assets

USU CU 7.99% Yes (U-State) No 26 $1 Billion

Deseret First CU 8.99% No No 10 $431 Million

Mountain America CU 8.99% Yes – limited No 75 $4 Billion

America First CU 8.25% no No 109 $6.1 Billion

In order to compare the industry and local credit unions we made a table of

features offered through four credit unions. We found that the credit card rates were very

similar and averaged 8.55 with USU CU offering the lowest rates. The ability to choose

the picture on your card was important to us to understand because that is something that

customers can do to personalize their card. Most of the credit unions did not offer the

option to customize the card, Mountain America had limited choices, and USU CU’s new

card has the Utah State logo, which will be featured on the new card. Overall, USU CU

offered competitive features compared with the other local credit unions.

To get our target markets we did some brainstorming and came up with a list of

possible groups that we could market to. We focused on groups with some kind of

relationship to Utah State because of the benefits of this new card being offered by USU

CU. Once we had a list of possible groups we went through each of them and talked

about the pros and cons of using them as a target market. We also talked about the

challenges related to getting contact information for specific groups and challenges

related to how we would market to them. We had to take into account legal policies and

other regulations regarding personal information used for marketing purposes. Once we

compared the challenges to the opportunities we picked our top four to five groups to use

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as our suggested target markets. These are groups that we thought would be most

interested in the new card and would benefit most from it. We then created our marketing

plans to target each of these groups.

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Marketing Ideas:

True Blue Pledge:

I believe that the True Blue Pledge represents a group of students that understand

the importance of giving back to their educational institution. Therefore, those students

are closely associated with a group of students who have school pride and want to see

their school succeed. I make the assumption that these types of students would make

excellent candidates for a marketing campaign because they would care enough to own

and operate a card affiliated with the school they love, especially knowing that using the

card does give back to USU.

To become a member of the True Blue Pledge one has to sign up for a donating

schedule that replicates the following pattern freshman pay $5, sophomores pay $10,

Juniors pay $15, and Seniors pay $20.15 (cents depend on the year they graduate).

Students are then able to choose where their donation is given from three different

categories. The money can go towards a club/organization they care about, a specific

college, or a scholarship fund. The program was created and implemented in 2013 with

the idea that students who learn about donating while in college and begin by donating

small amounts are more likely to give back in their later years of life.

True Blue Pledge Benefits - $100

Every time someone from the True Blue Pledge group signs up for The Aggie

Card the will receive $100. On the condition that at least $500 is spend in the first

month.

Target Audience: members of the True Blue Pledge

Benefit: Monetary incentive, earn $100 for using The Aggie Card

Compelling Reason Why: That’s because as a member of the True Blue Pledge you earn

special rewards and specific discounts where others do not have access.

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Marketing Theme: Be a part of an elite group of students that understand the importance

of giving back to the school that provides them with their education.

Marketing Medium: hard plastic examples of The Aggie Card given to each True Blue

Pledge member upon signing up for the program.

Advertisement costs:The production of the plan (paying the employees that create it) and

the cost of creating 100 hard plastic fake credit cards used to portray The Aggie Card and

given to each member of the True Blue Pledge.

Implementation costs:

This falls in line with USU Credit Union’s expectations: Compared to the mailer,

which had the objective for a 1% success rate, USU Credit Union is willing $1 for every

mailer, True Blue Pledge has about 100 people (a little more) and if only 1% signed up

then that would be $100, which would average out to $1 a person. Best case scenario all

100 sign up which would be $10,000 - $525 (the percent earned from transaction income

(1.05%) from 100 people spending 500 dollars). Estimating that 25% of the students do

not pay their cards off that leaves an added $998.75 (assuming the interest rate of the card

is 7.99%). The total budgeted amount would be $10,000 - $1,523.75 = $8,476.25. Due

to incentives we assume that membership of the True Blue Pledge group will grow 60%

for the next 5 years (inflated from an annual growth of 30%) the amount budgeted over

the next 5 years would be 2015, $8,476.25; 2016, $13,562; 2017, $21,699.2;

2018,$34,718.72; 2019, $39,549.96; 2020 $63,279.92. An important part of this

assumption is that instead of spending $10,000 on mailers and getting 100 people to sign

up (1% of the budgeted amount), instead spend $8,476.25 and get 100 people to sign up

(1.18% of the budgeted amount). By the end of the 5 years an amount of $63,279.92

would be spent (not subtracting the money made from interest gathered from the years’

previous interest payers) and 1,049 people would have signed up (1.66%). Worst case

scenario ends up being 1.06% (1 out of every $94.75 spent signs up), which is higher

than our 1% mailers objective. The project will hopefully sustain itself from revenues

created by the interest from the cards, a general rule should be submitted suggesting that

if more than 30% of the amount budgeted for The Aggie Card is reached or surpassed

then the program should be discontinued, or reduced to a lower amount (from $100 to

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$50). If this idea were looked at from a different perspective still using the guidelines

given (1% of people marketed to will sign up for The Aggie Card - mailer) then the True

Blue Pledge makes up about 1% of the total population of the Logan campus (13,383 in

October 2014). Therefore, if all of the True Blue Pledge members understood how to get

$100 for signing up for the program we expect almost 100% participation, giving USU

Credit Union access to almost 1% of the total population of the Utah State Campus.

Argument:

Additional measures will have to be made to accommodate for the law that

prohibits direct solicitation to students on campus, but the university sends out

information to all of the members of the True Blue Pledge and accommodations can be

made to insert a promotional product (the fake Aggie Card) into that packet as well as

advertising to students through their peers. The Student Alumni Association (SAA) may

take extra measures to not market the $100 to students who have yet taken the pledge

because SAA wants students to sign up for the pledge under the correct circumstances so

that the students can learn how to give back and a majority of the perks remain

unmentioned until after a student has taken the pledge. A decision may be made to

collaborate more closely with SAA and their efforts in helping students sign up for the

pledge (both USU Credit Union and SAA would benefit).

Front Row:

As an official sponsor of USU events, reserve about 100-200 seats for one game a

season where members of the True Blue Pledge can sit together on the front row.

Students will be given this opportunity for attending a meeting before the game to discuss

The Aggie Card (and whatever else USU Credit Union would like to market to these

students).

Target Audience: True Blue Pledge

Benefit: Students love to sit front row with their friends. As members of the True Blue

Pledge they will have exclusive seats available to them for one game during a season.

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Food from USU Credit Union and a chance to learn something from them about how to

better manage their finances.

Compelling Reason Why: Thats Because USU Credit Union is going to reserve about

100 - 200 seats as a sponsor for one game during the season, and the credit union will

have the members of the True Blue Pledge attend a mandatory meeting before hand to

discuss a few of their products (if they wish to participate in the event).

Food/refreshments will be provided for this meeting.

Marketing Theme: attending a sporting event

Marketing Medium: Special tickets inviting members of the True Blue Pledge to

participate and required for entry.

Advertising Costs: The cost of the invitations, half a sheet of paper created on nice

paper. $200

Implementation Costs: The time and effort of a few employees to run the meeting before

the game, the cost of the food, and possibly a cost from USU for reserving seats ($1000).

Argument: USU Credit Union should try and pick a game that is less attended by

students because boosting attendance may help convince USU not to charge the credit

union for reserving 100-200 seats. Remember that True Blue Pledge members are donors

to the school and like other donors should be treated like donors.

Aggie “A” Plates:

Only the most devout patrons would pay the extra money to put the school logo

on their vehicle’s license plate. All other reasons aside, the new credit card with “U

State” embossed on the front would be a great match for our “A plate” demographic.

Focusing some of our resources on prospective customers that have “A” license plates

should gain an above average return on investment due to their love for Utah State.

Mailers

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We realize that mailed credit card applications are non-original and cliché, every

adult is used to getting them and most envelopes make it to the trash before they are ever

opened. Mailed credit card applications (pre-approved or not) are being suggested as

part of the “A” plate marketing campaign because if it was framed the right way it would

generate a much higher percentage of respondents than the typical 1-2 percent seen by

most mail campaigns.

The envelopes and material must complement and frame the card in the right way.

No doubt that if the envelope had a picture of “Old Main” and if the pamphlet inside was

that rich aggie blue color that every Utah State fan that receives this piece of mail is

going to read the information it contains. The Aggie “A” plate demographic are the low

hanging fruit. As said before, this demographic are predominantly avid Utah State fans

and their customer loyalty is attainable because we have their contact information when

other financial institutions do not.

Movie in the park

“Movie in the park” is a great way to create goodwill, community spirit, and the

undivided attention of an audience full of potential customers. USU Credit Union will

host the event, they will pay for the screen, licensing and organize any other sponsors or

activities. The entire event would be saturated in USU Credit Union promotions. The

hour before it gets dark and people are piling in with their blankets and chairs would be a

great time for activities. Get contact details while raffling off USU Credit Union swag.

Posters advertising the low APR or unique benefits this new credit card offers can be

hung up by the face painting or popcorn booth. The inflatable screen can have the big

USU Credit Union logo on it. A photo booth can instantly print out photos with a USU

Credit Union insignia. The event has the potential to gain a lot of new customers

regardless if it goes into a lot of detail or skims the surface.

The main reason for the event is to create a fun evening for families and friends in

the communities. If this isn’t the main reason than it will be difficult to gain an audience

and the success of the campaign will be compromised if it gets into too much business.

Because the event is free, it will be natural for attendees to expect a five minute business

spiel. Filling out applications could deter from the light and fun nature of the movie

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night. Business cards that contain simple directions on how to apply for the card online

would be a great way to get the credit card details in everybody’s pocket. The success

rate of the business card approach will be magnified if each card contained an exclusive

coupon code (ex. “Movie night” or “Back to the Future”) that will get them swag or a

free Utah State flag when they sign up for the card.

Some of the financial breakdowns are below. This event would be easy to

duplicate over and over again in different areas throughout the community. Advertising

for this event wouldn’t be too difficult. Insuring that the event is on the Cache Valley

event calendar would get lots of participation, involving high school athletic teams would

also help advertising and the delegation of work. Involving Logan City’s Parks and

Recreation staff would be beneficial in many ways. Involving a local movie theater

could be a little bit more difficult but equally as beneficial. USU Credit Union would be

hosting it so they make the calls on what other sponsors they would like to have on board.

Economies of scale, creativity and a cool movie would be key in making “Movie in the

Park” a truly successful marketing tool for USU Credit Union.

Fixed Costs

Inflatable Screen (own) $2,999.00* (20ft.)

Projector $~600.00

Speakers $~600.00

Variable costs

Movie Licensing $250-350 (depending on the movie)

Wages of USU CU representatives $375 ($25/hr. for 15 hours each event)

Which day of the week doesn’t change the licensing price, the title of the movie

changes the price. For instance, Back to the Future may be less costly than Despicable

Me. The licensing price only includes one screening. If you don’t own the movie that

you would like to show then there will be a minimal shipping charge added to the

licensing price and they will send you a copy of the movie. (Licensing information

obtained from criterionpicusa.com)

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Season Ticket Holders:

USU Credit Union has an opportunity to interact with USU season ticket holders

and fans. These fans are loyal fans of USU that would be interested in having this type of

card that USU Credit Union is offering. A majority of them are local fans that would be

able to enjoy the benefits of using the card in Cache Valley. There are also fans that are

from outside of the Valley but are in Logan often for games and could use the cards then.

USU Credit Union has a couple of options to target Aggie season ticket holders

and fans. Those options include having a booth at the football tailgate area, having a

booth at the entrance of basketball games, and being the game sponsor for either football

or basketball.

Football Tailgate

The football tailgate area is a relatively new experience at USU and something

that the athletic department is interested in expanding in popularity with local fans and

students as well as increase fan engagement and participation. Local businesses and

sponsors set up booths on the street in front of Romney Stadium and give away food,

prizes, and merchandise. Fans are also given an area to set up shade tents and cook food

while they get ready for the football game. Sometimes there is a live band or DJ and

athletes from other sports come to interact with fans at a table/area set up by the athletic

department. It is a fun atmosphere and a great environment to promote USU Credit

Union’s new card. The seating capacity of the stadium is about 25,000.

Table at Basketball

The table at the basketball games is set up along the concourse of the Spectrum

behind all of the seating. One great area to set up this table is right where most of the

season ticket holders come through the doors and into the Spectrum. Information about

the card can be given out here and advertised to fans. The Credit Union could do a

number of things to gather contact info for a database of potential customers including a

drawing of business cards or emails written down, an opportunity to spin a wheel for a

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prize after taking a survey, or activities like that which would encourage fan

participation. The seating capacity of the Spectrum is about 10,000.

Game Sponsor

Every game has a game sponsor which allows for a number of advertising

opportunities. The name and logo of the game sponsor is put on two areas of the floor at

basketball and put on the big screens and boards at the events, announced over the PA

system as the game sponsor, and has a few special promotions at time outs. This would

be a great way for USU Credit Union to get the word out about their new product but

does not provide for a lot of personal interaction with fans.

Details (cost, etc):

The partnerships with sponsors and USU is set up through Aggie Sports Properties

(ASP). They are the multimedia rights holder for athletics at USU and offers sponsorship

opportunities like signage and video boards, in-game promotions, game day

sponsorships, game programs, print advertising, and group hospitality. The cost of the

partnerships depends on what is included in the sponsorship and that is negotiated and

agreed upon between ASP and the sponsor. The following are estimates from ASP.

Football Tailgate

A booth and display at the football tailgate is typically less than $1,000/game (because

it’s not in the stadium). There are 6 home games next year but some might already have

sponsors.

Table at Basketball

A booth and display at basketball is about $1,000/game. There are around 12-15 home

games in a season.

Game sponsor

Being the game sponsor for football or basketball is around $6-7 thousand/game.

Aggie Sports Properties

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Landon Day

General Manager

T: 435-797-8991

Patrick Bunetta

Account Executive

T: 435-797-8992

http://learfieldsports.com/university-partners/aggies-sports-properties/

Current USU Students:

Every incoming freshman and international students come to Utah State

University and attend promotional functions such as A-day, during the fall, and Soar,

during the summer months. During these informational activities students are given all

kinds of information on how to successfully integrate into life as an Aggie. They are

given tips from knowledgeable staff members, as well as model students called the A-

Team. Information is given out on everything from housing, class scheduling, and meal

plans, local hot spots, and game days are covered here.

Since all incoming freshman are required to attend these, we decided it would be

a perfect way to grantee exposure to the target audience of incoming freshman and

international students for the new USU Credit Union Aggie Card. As an incredibly

important additional bonus factor, these students attend these events with their caring and

concerned parents at their side. These parents’ number one goal being ensuring that there

son or daughter has a solid foundation coming into this new chapter of their lives. With

this immense hedonic value attached to this experience, the platform for targeted sales is

perfect. Not only can the credit union be sure to be seen at an event like this, but also the

atmosphere of trust and loyalty will make people more likely to sign up. Being affiliated

with the university at this depth will add great credibility for the credit union, to Utah

State University enthusiasts. This suggests that not only will alumni parents and USU

affiliates be interested in this product, but also those that are entirely new to the Aggie

lifestyle and wishing to conform and embrace being an Aggie.

Booths

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The first marketing strategy to reach out at such an event is a simple booth. This

booth should include attractive logos and visuals that promote the card service. At least

one knowledgeable employee of USU Credit Union would be at this booth at all times to

give information to the students and parents when needed. Exceptional people skills and

the necessary information needed to provided customers will be given to all employees.

They will also be well versed in the current card laws so that all laws will be followed.

They need to be capable of answering detailed questions and connecting with visitors to

the booth. There should be free informational fliers to be handed out at this booth.

Information Pamphlet

Another marketing idea for this event is to include an informational pamphlet

inserted in the folder that is handed out to each of these prospecting students, or to have

this information pamphlet sent to the students in their informational emails before they

arrive at USU. Having these included in such a standard folder adds an “of course”

attitude to signing up for the card. The goal is to make signing up for a USU Credit

Union Aggie card part of the freshmen checklist and at their top of mind. This would

mean that a new student would feel as comfortable with signing up for a card as they do

signing up for a Hurd club membership or on campus housing.

Week of Welcome

Another opportunity is for USU Credit Union to get involved with a campus wide

event called Week of Welcome, or WOW. This event entails daily activities that are

aimed to help the new freshmen integrate successfully into Utah State life and be excited

about it and gives returning students a chance to see what kind of events are happening

this year on campus. Typical things that go on during this week are concerts, high stakes

bingo, free aggie ice cream, etc. Getting involved with any of these activities in a sponsor

type role would be advisable because it would create top of mind awareness of the Credit

Union brand in college students minds when they go to sign up for a credit card in the

future.

The simplest day of WOW to get involved with is Day on the Quad. This is an

event where various clubs and organizations seeking Aggie support come and set up a

booth on the quad. The day is spent with the students visiting these booths. Students are

highly attracted to booths that offer food, games, coupons and incentives, but due to

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credit laws we would have to be careful of what we offer students. This fits very well

with USU Credit Union’s new Aggie card and all the benefits offered specifically to USU

enthusiasts. If the credit union succeeds in setting up an attractive booth that thoroughly

communicates the benefits offered, as well as draws in participation through things like

games, then they will see great success at this event.

Faculty:

Another audience we wanted to reach was the faculty members at USU. We find

this is an important group to target for the new card. We thought this would be an

excellent candidate to sign up for the card because of the group’s commitment to and

involvement in the University.

New Faculty Teaching Academy

Every year all first-year faculty members are invited to attend the New Faculty

Teaching Academy. The Office of the Executive Vice President and Provost currently

sponsors the academy. It is designed to support new faculty members in the transition

that they assume: a research intensive, student-centered, comprehensive position. The

transition can be difficult, and that is why the academy provides a supportive coaching

and mentoring semester-long learning opportunity to its faculty.

Our proposal to target faculty members would be to co-sponsor this event.

Faculty members are investing a large amount of time and resources into the community

and we want to USU Credit Union to be top-of-mind when it comes to finances. By

being a positive contributor to one of their first teaching experiences, we will create a

unique opportunity to gain their market share.

Mail Flyer

Unfortunately, the University is very strict on advertising to faculty. They do not

allow businesses to come in and target faculty with advertisements. The only advertising

that is allowed to be targeted towards the faculty is sending flyers to the faculties

mailboxes. This can be done through the postal services or through by hand. Although

this was a setback for our project we looked at it as a challenge. From there we came up

with the idea to create a brochure on a cardstock paper that looks like a folded-up

hundred dollar bill.

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When you open it there are details about the card that has just launched and how

it benefits Utah State University and the card holders. It will also have a faculty

exclusive promotion code that will get them $100 for free if they sign up and use the card

ten times a month for the first four months. This will ensure that money is not given

away for consumers who don’t plan on using the card, and will give USU Credit Union

the opportunity to earn additional income.

There are just over 1,200 faculty members, if 5% took advantage of this deal it

will cost USU Credit Union $6,000, but will give them the opportunity to earn much

more. The 5% is based on the 2% success rate that typical mailing campaigns through

USU Credit Union receive. However, a higher success rate is expected through this

promotion due to a more targeted and innovative approach.

Suggested Card Benefits:

10% discount at USU campus bookstore or online USU bookstore

Aggie ice-cream 15% discount or cash back

New customers could get bonus reward points

On Aggie game days you will get 3% cash back in grocery stores.

Giving additional rewards when customers go to businesses that are rooted in Cache

Valley culture could be a neat and unique perk to the card. USU Credit Union could offer

added points or cash back reward options each time they shop at one of the specified

locations during its designated time frame. The variety of businesses will incentives new

customers from different demographics to get the Credit Card. For instance, the final

quarter (laid out below) may be an appealing reason for seniors to get the card.

Giving additional points will probably be easier than awarding discounts. Separating

the stores into quadrants will save USU Credit Union money because the additional

rewards won't be available year long, it will also encourage customers to get online more

frequently and get familiar with online banking. The businesses we have included below

are some good examples of companies that would increase the goodwill of the card, of

course the list of companies are adjustable.

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Quarterly triple points back

Jan. 1 – Mar. 31 April 1 – June 30 July 1 – Sept. 30 Oct. 1 – Dec. 31

HermsCafé SaborAngie’s

LW’s Truck StopCenter Street GrillCal-Ranch

ORC RentalsThe SportsmanAl’s Sporting goods

Ellen Eccles TheatreDeseret BookGossner food

Lump sum additional bonus points for making these purchases:

A Beaver mountain season pass - 750 points

Utah State Athletic season ticket – 500 points

Logan aquatic center season pass - 250 points

Jump zone family pass – 100 points

What We Learned:

At the beginning of the this project as a group we were somewhat confused about

what the end goal was supposed to be because their were so many unknowns. We were

given $100,000 to “work” with by USU Credit Union and for a group of college students

that was such a foreign concept that we were very confused. So after our initial meets

with the company we started understanding what they were asking of us and our ideas

started coming together.

The marketing plans stated above are to be presented to the Credit Union and our

suggestions to update the card benefits are something that we feel should be taken into

consideration as they might benefit the company as well. We have done lots of research

on these and have learned that projects like these are not ones that fall into place quickly

because of the depth in research and thought that they require.

600,000 back to the university

Conclusion:

We came up with ten separate ideas to use on the following groups: True Blue

Pledge members, Aggie “A’” Plate members, Season Ticket Holders, incoming freshmen

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and international students, and USU faculty. We were able to obtain the list of names of

the Aggie “A” Plate members and the Season Ticket Holders, which the USU Credit

Union had asked for, but was unable to do. We also added the other groups because we

found it beneficial and that they fit the target market for the card. All the ideas came in

under the $100,000 budget we were given. We were able to target all audiences and

maximize the reach with the budget constraints.

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References:

http://openaircinema.us/outdoor-movie-screens/20-open-air-home- screen#.VRDS-mR4r5I

http://www.criterionpicusa.com/movies-for/outdoor-cine-2

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usu credit union final paper

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