Indiana bank seniors' club evolving with the times

Northwestern Financial Review, May 1-May 14, 2002 by Yontz, Mark

[marketing]

Citizens First State Bank in Hartford City, Ind., formed a seniors' club in the mid-- 1980s to retain customers. Now the club is evolving in an effort to contribute to the $100 million bank's profitability and attract younger members.

Located in one of the state's smallest counties, Hartford City is a population oasis in a rural area. Larger communities - with bigger banks and active seniors' clubs -- can be found nearby but the 130-year-old bank's Heritage Club has become a mainstay in this community of 7,000-plus people.

"We started the Heritage Club for customer retention and it has been successful," said Maxie Mallot, who has been the club's only director for 15 years. The Heritage Club ties several banking privileges with social and travel opportunities. Customers 50 years and older can participate as long as they maintain a minimum balance of $1,500 in a checking or savings account, or $15,000 in a Citizens First certificate of deposit. Included in the membership are no-charge checking, specially priced checks, safe deposit box discounts and free travelers' checks.

The travel and social activities, however, are the real attraction. Besides potlucks, seminars and day trips to area attractions, club members are given opportunities to take part in domestic and international excursions each year. Over the last few years, Heritage Club members have traveled to Australia, Canada, Switzerland, England, Greece, Austria, Alaska and Maine. Club members pay their own way but the club offers affordable rates and all the conveniences of a fully organized tour experience.

"Different things keep different people happy," explained Mallot. "Some folks do it just for the potlucks, while others really want to travel and get out of town."

Although Mallot says the Heritage Club has done well given the size of this agricultural community, she says it is going through a transition. Membership recently dropped by half, to 800, after the bank implemented a $20 annual membership dues. "Some people didn't want to pay for something they had gotten for free in the past," said Mallot. With fewer members, the club is scheduling events every other month rather than every month as it had in the past.

Mallot also worries that the club is failing to recruit younger members. "Most people seem to join in their early sixties, but we're trying to figure out how to get 'Boomers' to join," said Mallot, who believes the lack of discretionary dollars, as well as work and family commitments, keep most people in their 50s from joining.

Nonetheless, Mallot says the club remains important. "The club has to be self-supporting and also support the bottom line," said Mallot, who feels a lot more banks are taking a look at the impact senior clubs have on bank resources.

Mallot can point to specific examples where the club has brought new customers to the bank. "The greatest thing was when the wife of the president of our competitor bank in town brought over money to open an account so she could join the club," explained Mallot, who said the other bank in town doesn't have a club.

Forrest and Faylee Duncan, who have been customers of the bank for almost 50 years, have traveled all over the world as club members. "We've always liked the idea of it being local and doing things with people you already know," explained Forrest Duncan, who likes the travel arrangements the club makes. "The club's trips have fit in well with our plans to travel after retiring."

Which is exactly what Mallot loves to hear, and is one reason she remains optimistic the Heritage Club will continue to be a part of Citizens First State Bank. "It makes me feel good when people believe it's a good value," commented Mallot.