Why Service Credit Union could lose members with its new $500 checking account promotion

Service Credit Union is offering two checking account promotions worth $200 and $500. While that may sound like great news, this new promotion is bound to ruffle a few feathers of at least some existing Service Credit Union members.

Through December 31, 2023, Service Credit Union ran its “best move” promotion (servicecu.org/bestmove) and offered $100 to members who opened a new checking account and received $300 in direct deposits for 3 consecutive months. Less than 3 weeks after that promotion ended, Service Credit Union introduced its new and current promotion (servicecu.org/get-up-to-500).

With this campaign, members have two offers to choose from: $200 for $500 in direct deposits or $500 for $1,500 in direct deposits. For both offers, the direct deposits must be received for 3 consecutive months. 

With the exception of the direct deposit amounts and bonus payout, the new offers are identical to the — what some may now consider paltry — $100 direct deposit promotion that Service Credit Union offered to members just weeks ago. As one would expect, members attempted to enroll in the newer offer. However, the credit union wouldn’t budge.

Some may argue that offering updated and better promotions is a standard business practice, one that is necessary if a company is to remain competitive and attract customers. However, it’s also commonplace for companies to offer price adjustments or matches. Some companies even promote it to encourage customers who may be hesitant to complete a purchase. In these events, if a customer finds a cheaper price after making a purchase, the store will offer to match the price that they found elsewhere by paying them the difference. In terms of bank and credit union account bonuses, some financial institutions, Chase being an example, let customers swap out their promotional offers. But, these are all essentially goodwill gestures that Service Credit Union doesn’t necessarily have to provide to its members.

So, where did the credit union go wrong? Perhaps the core issue is that Service Credit Union didn’t consider the psychological impact of their offer. The monetary differences in the bonus payouts were just too much for members to just gloss over. Knowing that you could have gotten an extra $400 for doing practically the same thing as someone who signed up for the offer just a few short weeks after you is sure to stir up bad emotions in members, even if only momentarily.

Like all promotions, the purpose of Service Credit Union’s checking account bonus offers was to increase business. By not allowing members who were first to sign up for the smaller $100 promotion, Service Credit Union is likely stoking up feelings of resentment in some of its members. These members may hesitate to expand their relationship with the credit union and may ultimately close their accounts due to their dissatisfaction with the way the credit union decided to manage the situation. These are all reactions that a marketing promotion should never invoke.

In the end, Service Credit Union will pay its members who fulfill the $100 bonus requirements, but it will have all been for nothing in the inevitable event that members rage-quit the credit union after their bonuses are received. While Service Credit Union is well within its right to deny members the option to switch to one of the newer, better offers, from a marketing standpoint, it wasn’t exactly the best move…pun intended.