Consumer Engagement Creates Opportunities for Credit Card Marketers
Global economic slowdown. Double-dip recession fears. Cash hoarding. Whatever catchphrase those who aren't spending money are using to justify their miserly behavior, consumers who actually are spending money would prefer hearing different words coming from credit card companies: "Thank you, and here's your reward."
So finds a study announced on July 20 by Irving, Texas-based marketing services firm Epsilon. Recharging Credit Card Marketing to Meet Evolving Consumer Expectations evaluates a March 2010 online survey of more than 180 consumers who recently opened up a new credit card. The survey questioned respondents about their experiences throughout the card selection process.
The respondents were part of a larger Epsilon survey of 1,500 U.S. consumers conducted in conjunction with eRewards and exploring the concept of "customer experience marketing."
"Cardholders see loyalty as a way to reduce their cost of spending or to reward themselves based on spending—an economic value that's perhaps more important during challenging economic times," according to the study. "Even in recessionary times, marketers need to focus on loyalty."
Here are the study's key findings:
- About 34 percent of consumers surveyed definitely knew which company they were going to use when they opened up a new credit card;
- More than four in 10 consumers chose a company with which they already had accounts;
- The most influential sources of information were friends and family, followed by a financial advisor, brand websites and product review websites;
- The primary reason consumers selected the credit card company was the rewards program. Interest rates and recommendations from friends and family were also driving forces;
- The preferred channel for receiving information about credit cards was e-mail. Postal mail and the company website were also preferred by consumers; and
- Consumers are most interested in receiving rate changes and sales/discount offers from credit card companies. Nearly one-third also chose information tailored to their interests as one of their top two selections.
Here are the key action steps for marketers:
- Provide information that's personalized and relevant, the announcement attributes to Michael Penney, executive vice president, Epsilon Strategic & Analytic Consulting Group. "Marketers need to focus on asking questions and understanding what consumers want and how to engage with them."
- Loyalty programs are more important during tough economic times, according to the study. The study cites the 2009 COLLOQUY Segment Talk study, which shows that 77.6 percent of its respondents participating in a financial services loyalty program "stated that reward programs are as or more important during the recession than ever before."
- Make the rewards personal and relevant, too. According to the study: "[Financial services marketers] need to create a blend of financial and recognition benefits and generate an ongoing dialogue with members to drive the most results."
- Engage prospects earlier in the decision process and where it counts. Only 34 percent of consumers who opened a credit card in the study knew which company they were going to choose. Top sources for information included product websites, review sites and friends and family. Figure out how to be there when the decision is made.
- Differentiate your loyalty program. Regardless of whether the consumer knew which company he/she would choose, nearly 50 percent cited the loyalty program as a deciding factor. "We believe the strongest loyalty value propositions are targeted, and contain both economic and emotional appeal," according to Epsilon. "Take a look at your current program and make sure it’s strong."
- Integrate marketing communications. The Web, e-mail and direct mail work best in concert and for specific purposes. Cardholders want to hear about changes to terms, special offers and information tailored to their interests. Use the best medium given the complexity and importance of the information and your expected return. Credit card marketers need to create detailed multichannel marketing playbooks for key segments across lifecycle stages.