Consumers from all banking segments value a variety of features when evaluating credit offerings. The chart below illustrates how consumers prioritize credit card features as extremely valuable or very important when they opened a credit card in the past year with their primary bank.
How consumers evaluate credit cards at their primary bank
However, community bank and credit union customers value rewards programs and one-time offers less than their peers who have their primary banking relationship with larger issuers. Consumers may want to open a card with your financial institution, but your offers need to be top-of-mind.
Creating effective offers for rewards, non-rewards, points and cashback cards
Approach consumers with the right offer, making sure to market your products in multiple channels based on industry best practices. When designing and marketing credit cards, keep your target customers in mind when developing content and crafting key marketing messages.
Focus marketing messages on differentiating features like free FICO scores, no foreign transaction fees and the ability to “freeze” the card—as well as simplicity, security and control. You should also conside highlighting security benefits such as account alerts, zero liability and fraud protection, flexible payment schedules, and no overdraft fees. Communicating a clear value proposition that consumers easily understand is crucial to success.
- Non-rewards cards: Non-rewards products often appeal to new credit customers and credit rebuilders. For your non-rewards cards, offer a long-duration, zero-percent introductory rate, which is also common among major issuers.
- Cashback products: Rewards products appeal to a wide spectrum of consumers and can be used to deepen customer engagement. Highlight rich rewards with a simple customer experience that eliminates caps on the amount of points customer can earn as well as the categories in which they can earn them. For earn rates, one percent cashback products have become table stakes, with many issuers even offering a flat rate of 1.5-2 percent on all spending.
- Points cards: Offer no annual fee with an accelerated points earning program for specific purchase categories. For example, travel cards often feature accelerated earning for travel and entertainment purchases. When marketing these types of cards, focus on features such as a flexible and user-friendly rewards redemption program.
Non-Rewards
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Cashback
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Rewards
|
|
|---|---|---|---|
Visa Proposition |
Long duration 0% introductory offers |
Simple enhanced cashback earn rates |
No annual fee with an increased earn rate |
Key Marketing Message |
Simplicity, security and |
Added value |
|
Important Card Features |
|
|
|
Multichannel marketing success
Make sure your multichannel marketing strategy makes use of traditional channels while also capitalizing on digital channels to increase access to customers. Traditional channels like direct mail and branch are especially important for acquisition. Since 64 percent of new accounts are sourced at bank branches4, you should consider optimizing the branch experience by training and incentivizing your staff to cross-sell your credit products and provide ample take-home pamphlets and other materials.
You can also get ahead of your competition by making sure your acquisition offer is in your customers’ mailbox. Since 47 percent of regional financial institution customers learn about and subsequently open competitor cards via direct mail1, use this channel to educate and inform your customers about your credit product offerings.
In addition to the traditional channels, you should also incorporate emerging digital and social media channels into your marketing strategy so that you can speak to your customers when and where they prefer. One-third of consumers use social media sites when evaluating retail banking products2. And there was a 384 percent increase in Twitter engagement for financial services in 2014, indicating that financial services engagement on social media is on the rise2.
Creating a seamless customer response experience
Since 68 percent of application responses are submitted via online channels2, make sure your online application process is easy to use and built with a responsive design (that is, optimized for desktop and mobile devices) for a seamless customer experience. An integrated online presence and seamless digital experience is essential to promotional strategy.
Marketing your products
When marketing your card products to consumers, keep the solicitation brief with sound bites and visuals to highlight key benefits and competitive differentiators. Target customer growth segments and promote the benefits valued the most by each segment. There are three main audience segments that provide a great opportunity for issuers:
- Mass market consumers are a great opportunity as the low-loss credit environment continues: Offer security and financial control to those new to credit and those looking to rebuild their credit reputation.
- Millennials will be the biggest segment of credit spenders in the next 20 years: Offer them sign-up rewards, balance transfer offers and/or competitive rates
- Affluent consumers are the fastest-growing segment in terms of credit payment volume: Offer them rewards and lifestyle benefits4
Creating effective product offers based on consumer preferences
If you want to make your card products competitive in the marketplace, you should tailor your offers to consumer preferences. Consumers prefer the following types of card features3 when shopping around for credit cards:
- No annual fee
- 1-1.25 percent rewards
- Introductory balance transfer pricing offer
- No foreign transaction exchange fees
- Financial institution community involvement
- Additional financial services
- Branch access
Contact us to learn more about optimizing your product offers.
Sources
1 AT Kearney Q4 2016. Consumer Banking Market Dynamics Study. Definitions: National and Super Regional Banks are the top-10 banks by deposits; Community Banks and Credit Unions are the banks that are not in the top-10 by deposits and credit unions; Direct Banks are the banks with no or limited physical presence
Question: In the past twelve months, which of the following products/accounts did you purchase/open at your primary bank?
In the past twelve months, which of the following products/accounts did you purchase/open at a financial services provider other than your primary bank?
How important were each of the following credit card features in your evaluation of alternative credit card providers/offers?
2 Mintel Comperemedia U.S. Consumer Credit Card Acquisition Marketing Overview Q2 2016; Social Best Practices for the Financial Services Industry. Shareable, November 21, 2014.
3 Source: Regional Financial Institution Consumer Card Preferences and Attitudes, Fall 2015.
4 Visa Branch Optimization Study, 2013.