Most credit unions acquire new members through indirect lending but far too many of those relationships end at the loan. That’s a missed opportunity.
Indirect auto loans are a vital entry point for growth. But if your team isn’t focused on what happens after the loan closes, you’re likely leaving long-term member value on the table. The good news? With a smart approach, indirect borrowers can become your most loyal, highest-lifetime-value members.
The Financial Imperative: Why This Matters Now
Credit unions today are operating in a rapidly changing environment shaped by economic uncertainty, rising costs, and shifting consumer expectations. At the same time, competition is intensifying—not only from traditional banks, but increasingly from digital-first fintechs that are redefining what consumers expect from a financial institution. Understanding the financial headwinds and competitive pressures is essential for identifying where and how to build stronger, longer-lasting member relationships.
Economic Headwinds for Credit Unions
- Loan growth is slowing: 5.6% in Q4 2023, down from 8.6% the prior year (NCUA).
- Net interest margins are tightening due to rising funding costs.
- Operating expenses are up: Professional and outside services rose 8.2% YoY, reducing ROA to 0.74% (CUNA).
- Asset quality is deteriorating: Net charge-off and delinquency ratios have increased.
Competitive Pressure from Fintechs and Banks
- Fintechs capture 40% of new checking account openings.
- Gen Z is 3x more likely to name a fintech as their primary provider than a credit union.
- Consumers are drawn to bundled features, not just mobile UX: early paycheck access, credit tracking, and spending tools.
- Big banks are buying market share with incentives like $900 bonuses from Chase.
- Fintechs face retention issues: Chime’s Gen Z primary provider status dropped from 12.3% in 2023 to 6.3% in 2024 (Forbes).
The Strategic Opportunity
Credit unions that deliver relevant, relationship-driven value beyond sign-up bonuses and flashy apps can win back these relationships. In this environment, maximizing Member Lifetime Value (MLV) isn’t optional, it’s foundational.
Converting low-engagement indirect borrowers into loyal, multi-product members is one of the most financially efficient paths to long-term growth.
The Indirect Dilemma
Indirect auto lending introduces new members to your credit union without requiring them to walk through your doors (or visit your website). While convenient, this channel often leads to:
- Low product penetration: Many indirect members only hold a single loan product.
- Limited engagement: They may not even realize they’ve joined your credit union.
- Higher attrition risk: Once the loan is paid off or refinanced, they vanish.
In short, the average indirect member starts with low MLV but it doesn’t have to stay that way.
The Untapped Potential: What the Numbers Say
Recent studies and campaign results reveal a clear opportunity:
- Only 10–15% of indirect members open another product without follow-up.
- With personalized outreach, conversion rates increase by 12 percentage points
- Engaged, multi-product credit union members generate $2,500 to $4,000 in MLV over 10 years.
- A 5% increase in member retention can drive 25% or more in profitability.
If you’re aiming to improve ROA, grow non-interest income, and reduce operating inefficiencies, MLV-focused engagement of indirect members offers a compelling return.
Proven Strategies to Grow MLV from Indirect Members
Converting indirect borrowers into long-term, high-value members doesn’t happen by accident. It requires deliberate, timely, and personalized engagement. These five strategies reflect real-world best practices that credit unions can implement to move beyond transactional relationships and cultivate deep, multi-product member loyalty. With recent advancements in churn prediction and early-warning indicators, such as member engagement scores, loan payoff timelines, and location changes, credit unions can now identify disengagement risk well before members leave. When paired with targeted campaigns and the Next Best Product (NBP), these insights empower credit unions to take action at the right moment, maximizing retention and lifetime value.
1. Early Welcome Outreach
Reach out within days of the loan closing. Use personalized messaging that:
- Welcomes them to your credit union.
- Explains membership benefits.
- Introduces digital tools and next steps.
Even a simple onboarding email can increase engagement rates by 30% or more.
2. Behavior-Based Product Offers
Don’t blanket your new members with generic promotions. Instead, use data-driven models like BlastPoint’s Next Best Product (NBP) to:
- Predict which product each member is most likely to adopt next.
- Time your outreach when engagement likelihood is highest.
- Personalize messaging based on income, life stage, and channel preference.
This targeted approach can drive up to 3x higher conversion rates.
3. Proactive Cross-Sell Timing
Automate touchpoints based on member lifecycle. For example:
- Offer a checking account 30 days after auto loan funding.
- Promote auto-pay setup or mobile app download at week one.
- Introduce a credit card 60 days in, when trust is established.
Consistency and timing matter.
4. Human Touch for High-Value Segments
Flag high-potential members who those with strong income indicators, clean credit, or likelihood of needing a mortgage or business loan in the future. Route them to member services or branch follow-up for a personal check-in.
5. Winback Before They Walk Away
MLV isn’t just about acquisition, it’s about keeping what you have. Monitor signs of disengagement, such as:
- No logins or digital activity within the first 90 days.
- No uptake of additional products by the 6-month mark.
Use retargeting campaigns or incentives before the loan matures. Even reboarding programs can recapture value from members who might otherwise churn.
How BlastPoint Helps You Grow MLV
BlastPoint’s platform equips credit unions with the tools to identify, engage, and grow high-value member relationships, especially those that begin with an indirect loan.
Here’s how:
Predictive Segmentation
Use AI-powered personas to identify which indirect members are most likely to:
- Open a new account
- Adopt a credit card
- Be receptive to a mortgage offer
This helps you focus on the members who matter most.
Next Best Product (NBP)
BlastPoint’s NBP engine uses behavioral, demographic, and geographic data to recommend:
- The most relevant product for each member
- The best channel (email, phone, app, mail) for outreach
- The ideal timing for contact, based on real-world behavior patterns
Campaign Insights & Optimization
You’ll get clear metrics on what’s working, open rates, conversions, follow-up success, and recommendations to fine-tune your campaigns over time.
From Transactional to Transformational
For most credit unions, indirect lending is a necessary strategy. But without a plan to grow those relationships, it remains transactional.
By shifting focus from loan origination to long-term engagement, credit unions can turn their biggest acquisition channel into their most powerful growth engine.
Ready to turn indirect into irreplaceable?
Let BlastPoint show you how to grow member value, reduce churn, and boost ROI with data-driven engagement.