By Kate Young
As winter drags on, you may find your mind wandering from financial topics to thoughts of warm climates, gorgeous scenery, fascinating cultures—or just relaxing while someone takes you on a tour of a place you’ve never seen before. Chances are, your customers feel the same way. If only there were some way to piggyback your bank’s messaging onto the human urge to explore the world.
Of course, banks have been doing just that for decades in the form of “travel club” programs.
Generally speaking, bank travel clubs are affinity programs aimed at engaging wealthier (often retirement-age) customers. The concept has been around so long, in fact, that some industry watchers have declared it moribund. By all accounts, maintaining a travel club is a lot of work. And in the wake of evolving bank marketing strategies and abundant M&A activity, many programs have disappeared. The editors at Leisure Group Travel magazine, however, argue that the jury is still out on the future of bank travel clubs. Even as many banks have shuttered their travel clubs, others gather steam—and some banks are looking into what it takes to start a program.
A recent discussion among bank marketers—some who are new to the space and others who’ve been at it for years—uncovered the central concerns and the biggest opportunities in bank travel clubs.
Why travel? Why now?
As banks rethink their strategy, brand and methods of customer engagement, they have to ask themselves: Is it not enough to be a great bank? Why get involved in an extraneous activity like travel?
These are big questions with many possible answers. It’s worth noting that like banking, the travel industry has gone through radical changes in recent years. Gone are the days of the neighborhood travel agent who took responsibility for designing, managing and following through on customers’ vacation plans. Making travel arrangements has become an overwhelmingly digital, self-service chore. Consumers looking for the social, logistical and safety benefits of group travel may have to rely on faceless tour operators found online—an option that comes with its own set of risks.
Meanwhile, banks seek out sticky relationships with consumers who have disposable income and a well-defined set of financial needs—along with the opportunity to engage these customers in a more relaxed context.
Travel clubs may serve both sets of needs.
Jeff MacDonald, VP at Chicago-based Marquette Bank, reports that Marquette positions its travel offering as part of “an exclusive banking club with travel, social and financial seminar events.” Educational opportunities cover topics like investments, estate planning, ID theft, senior driving, Medicare and how to use the bank’s technology. To participate, members must be 55 or older and maintain a minimum balance in the bank’s premier checking account. How is that working out for the bank? “We have almost 10,000 members,” MacDonald says, with about 300-500 of them actively taking part in the travel opportunities.
Most banks are also looking for ways to differentiate. MacDonald notes that Marquette has one of the last remaining travel clubs in an area where every bank once had a club. “We still accept club refugees from other banks who are exiting this space,” he says.
Beth Weldon, VP at First Financial Bank in El Dorado, Ark., reports a similar effect at her bank. “No other bank in our county offers group travel opportunities,” she says. With more than 20 years of practice, the First Financial travel club has topped 1500 members. “Since we require an account with us to participate, we gain some deposits from those whose primary banking relationship is elsewhere but want the benefit of group travel options.”
Attracting a new generation of travelers…if that’s what you really want.
Just because the trips are offered by a bank doesn’t mean they have to be stodgy. Several banks reported offering winery tours, and international trips have taken club members on far-flung adventures to places like the Mediterranean, New Zealand and Australia. The travel club at Texas-based Prosperity Bank has an upcoming trip to Cuba, and anyone over the age of 21 can join Missouri-based Bank of Sullivan on its trip to Iceland.
Still, many clubs restrict membership to older people—aged 50 or 55 and up. Weldon points out that retirees comprise the demographic most likely to take advantage of group travel. “Most 50-60 year olds are still able to travel on their own,” she says, “although some do participate in the group trips.” If your bank’s objective is to provide a loyalty program for customers who are more affluent and mature, the age minimum makes sense.
No matter what age you’re targeting, the club name should have the word “travel” in it for SEO purposes—as should any club-dedicated pages on the bank’s website. That way, when people in your area are looking for travel clubs, they can find you.
Is the club a product or a marketing tool?
While some marketers said that their travel clubs have generated some income, more reported that break-even was the goal, and occasional losses were not out of the question. So why do it at all?
Weldon says that the travel club has attracted new accounts to her bank. But she’s quick to add that “the indirect benefit is increased customer loyalty and satisfaction from a demographic that historically has the highest balances on our books.” A club can also serve as incentive for customers to maintain minimum balances or upgrade to a premier account, as it does at Marquette Bank. Participation can also generate valuable data points for targeted marketing efforts. And then of course, there’s the halo-effect that the club casts over the bank: pleasant experiences lead to positive impressions of the bank.
Changing the conversation.
Travel makes for compelling content for newsletters, blogs and social posts. And sharing memorable experiences is a great starting point for building a sense of community. “From a marketing perspective,” MacDonald says, his travel club “does reinforce our neighborhood-bank positioning and gives us something different to talk about.”
It’s important, however, not to forget about the potential for personal interaction with customers. Because banks typically partner with travel agencies to run the trips, bank employees don’t necessary have to accompany the group on its journey. From a time- and cost-management perspective, outsourcing the travel duties to non-bank employees might make the most sense for some banks.
However, banks that have sent employees on club travel can point to the benefits of bank representation. Christy Goza, SVP at Tennessee-based Bank of Cleveland, took numerous trips with her bank’s club before it was phased out. And she occasionally found herself taking club members to the hospital, making emergency trips to the pharmacy and mollifying friction among travelers. “We established a lot of goodwill over the years,” she says.
Lorenda Smith, VP at First National Bank of Decatur County in Georgia, agrees that the employee representing the bank during club travel is key. For her, it comes down to trust. “Many people that would never think of walking in your bank,” she says, “will travel with people they know and trust.”
A benefit to individual membership in the ABA Bank Marketing Network is the ability to converse through the ABA Bank Marketing Network Groupsite–a members-only discussion group. The thoughts expressed in this article reflect the collective wisdom of Groupsite responses to the question, “Does your bank have a Travel Club?” Join in the discussion today.