Travel and Lifestyle Clubs for Credit Unions

How Travel and Lifestyle Clubs Help Differentiate Online Banking for Credit Unions

This article first appeared in the June 2018 issue of Credit Union Business.

One of the biggest challenges for credit unions today is their ability to drive awareness and engagement, including through their digital and mobile channels. In a somewhat commoditized industry where customer acquisition and retention are driven by price (or interest rates), credit unions need to embrace every competitive advantage they can.  Not only are they competing against other bank sites, but also against newer fintech players such as Mint.com. To stay relevant, credit unions will need to differentiate their value proposition in the eyes of existing and potential members …and one approach that has proven successful for credit unions is offering members a “travel club” subscription on top of their regular online banking.

Travel and Lifestyle Clubs for Credit Unions

A travel club is a simple idea with tremendous benefits for any organization that offers one – helping boost revenue, brand loyalty, customer acquisition and retention.

Members of a travel club pay a monthly or yearly subscription fee for discounted access to travel and lifestyle benefits (such as lounge access or travel insurance) through a private online portal. Best off all, the credit union doesn’t have to create the club website or manage relationships with travel vendors – everything can be offered “as a service” and easily accessible to members online. Even better, travel clubs add value to any other partnerships that credit unions already participate in, like car and life insurance offers.

Many people already finance their homes, cars and even vacations through a credit union. It’s not just the great rates that members value, but also the feeling that the credit union really cares– above and beyond deposits and balances. They have an interest in their members’ leisure spending and financial happiness.

To that end, travel and lifestyle clubs can help credit union members discover new possibilities for travel while accessing members-only discounts not available to non-members. Oftentimes, the savings on one trip will more than offset the cost of a one-year membership. There are also long-term benefits for credit unions that combine a loyalty program with a travel club, allowing members to accrue points on every booked trip.

Travel Industry and Financial Services

The travel industry has a unique relationship with the financial services sector, which helped popularize frequent flyer programs through co-branded credit cards. Like frequent flyer programs, the travel club concept is an idea that works because nearly everyone aspires to travel – they want to see, learn, taste, enjoy and experience. Leisure travelers in the U.S. spent $718 billion in 2017 and more consumers are mixing business and leisure trips. They want elite travel “experiences” and travel clubs can help make that affordable – and if they need a vacation loan, they’ve came to the right credit union!

Despite these ready-made revenue opportunities, few credit unions and other organizations outside the travel industry have the resources to build and maintain a travel club for their customers or members. In the last 5 years, 25% of American families have used a travel agent to plan a trip, according to the 2017 US Family Travel Survey. When asked why, they said they liked having a one-stop shop for booking, and that they got “value for money” through the travel agent’s discounts and perks – all of these benefits could be made available through a credit union travel club rather than a travel agency, helping the credit union drive awareness and regular engagement with its brand and other digital offerings.

Many would argue that American Express and other card companies are really travel and lifestyle clubs at heart. Why would consumers pay hundreds of dollars in annual fees to use an Amex Platinum card, or thousands of dollars to use an Amex Centurion? The difference is in the benefits – each card offers certain elevated benefits (such concierge services), and travelers will gladly pay a yearly subscription to access those benefits and be part of the brand.

The travel club concept helps ensure a personalized experience for members in their travel planning needs, with custom service to help them achieve their travel preferences, goals and aspirations.

Travel brands depend on non-travel organizations like credit unions to add value to the supply chain and distribute travel and lifestyle benefits to a wider audience, more efficiently, cost-effectively and profitably. This is the heart of the travel club concept – adding value to members’ lives within and beyond the credit union and furthering the organization’s core mission through brand affinity – which turns into brand equity.

Converting Brand Affinity into Brand Equity

In many cases, credit unions develop an interest in travel clubs because they want to bring in more revenue from membership fees. This is a strong motivation, but it should also be an opportunity to increase brand affinity. By adhering to the credit union’s brand standards, a travel club delivers real value to members through the credit union brand. These members have many options when it comes to trip planning – and banking – and a travel club is another opportunity to highlight a credit union’s value.

Travel clubs are meant to be unique, exclusive and beneficial; this is how they improve loyalty and differentiate the credit union in the eyes of existing and potential members. 70% of Millennials would rather spend money on memorable experiences like travel than on tangible items like clothes, and credit unions can help finance and plan those aspirations. Travel is a “big deal” to people and a major attraction for the credit union.

The biggest challenge for credit unions and other financial institutions is that they generally lack the know-how, resources and budgets needed to build a travel club from scratch and manage vendor relations with travel suppliers and distributors. And yet, who knows more about their members – or has better contact with them – than their credit union? That’s why travel clubs have been growing outside the travel industry: credit unions and other financial institutions can offer products and services they know their audiences will value within a club framework.

There are few things people value more than travel and lifestyle benefits. Everyone wins with a travel club, especially current – and potential – credit union members.