Thought Leadership

How Much does New Member Acquisition Cost?

November 7, 2018
How Much does New Member Acquisition Cost?
By Bryan Adler

If your credit union is concerned at all about growth, then you understand that you can’t always count on people to walk in and open an account organically. Finding and adding members to your credit union is key to stable growth, but “finding” and “adding” cost money. We’ll take a quick look at the cost of new member acquisition.

Do You Know How Much It Costs to Acquire a New Member?

Unsurprisingly, the answer most credit unions give is closer to the “no” end of the spectrum than the “yes” end. Usually, the answer lies somewhere around “not exactly,” and it doesn’t move much from there.

The issue isn’t that credit unions are incapable of finding how much it costs to acquire new members; rather, calculations will vary by their methodology.

One credit union might consider the cost of advertisements, banner ads, newspapers, and so on. Another credit union might include the cost of people’s time, so that the salaries for marketing specialists also count toward the cost of new member acquisition.

Depending on methodology and account type, we see the average cost of acquiring a new member to sit somewhere between $400 and $700.

Additional New Member Cost Factors

Even when your methodology changes, the numbers aren’t static. Prospective members are attracted to things like checking accounts that produce interest—credit unions who offer one are going to have an easier time acquiring and setting up than prospect than usual. These prospects may take only a few hundred dollars to attract.

On the other hand, prospective members looking for a less competitive service (such as a car loan or a mortgage) might take a little more effort to bring in. As a result, it may cost more money to woo these prospects. If your goal is credit union loan growth, you should prepare to see higher member acquisition costs.

However, the cost of acquisition between the two scenarios doesn’t tell the whole story. A member who opens a checking account at a credit union will not be nearly as profitable for a credit union as a member who takes out an auto loan. While one member may cost more to acquire than the other, the more expensive member is the better long-term investment for the credit union.

Depending on methodology and account type, we see the average cost of acquiring a new member to sit somewhere between $400 and $700.

Why This Information is Important

If you’re trying to grow your credit union, or if loan growth is a priority, you’ll want to make sure you don’t onboard an overabundance of unprofitable members. A smattering of $5 checking accounts looks okay on paper, but at the end of the day, those members may actually hurt your branch’s bottom line.

Better member acquisition cost measurements can help your marketing team target qualified prospects. They’ll be able to better determine effective strategies for bringing in new, eligible, profitable members.

Next Steps

If you don’t know your cost of member acquisition, now’s a good time to calculate that. For us, we total the amount of money spent on marketing, salaries or pay specifically allocated toward marketing, as well as a balance of all the other executives’ salaries. After that, we find out how many new members the credit union gets per month, and we annualize that number.

Your methods may differ. That’s okay.

If you already know your member acquisition cost, that’s great! You’re already on the road to growth. If you’re interested, here are a few more ideas for how to reach new members:

< Back to all articles
Interested in profitable and sustainable growth?
Sign up for a complimentary growth strategy consultation today:
Have questions about how Vetter can help you grow? Call us at (646) 518-8238 or email us at