insights into marketing of CCs

[quokka77]

Can't attach link as post count is too low but Google vectis dot com dot au credit cards for a brief PDF outlining how CC marketers think about cardholders. Interesting and a little disturbing. Still looking for hard data on credit scores, min accepted churn times if anyone has some specific recommendations for specific providers I'd be interested.

 

[wxxnxs]

Can't attach link as post count is too low but Google vectis dot com dot au credit cards for a brief PDF outlining how CC marketers think about cardholders. Interesting and a little disturbing. Still looking for hard data on credit scores, min accepted churn times if anyone has some specific recommendations for specific providers I'd be interested.

Do you mean this link: http://www.vectis.com.au/whitepaper...ctional Data To Increase Cardholder Value.pdf

 

[quokka77]

That's the one...

 

[Supersonic Swinger]

Biggest lesson - stay a transactor, don't become a revolver!

 

[eastwest101]

Biggest lesson - stay a transactor, don't become a revolver!

Yes interesting viewing, by "revolver" you mean people whom do not pay off the full balance in the bill cycle and pay interest? I agree - no way would I ever consider paying the interest rates on offer from Credit card companies. I see that Objective 5 talks about "Churn" - this is a different but not unrelated theme to annual fees, promotional offers like bonus points and balance transfers:

5. Manage key churn events

There are a number of events in the credit card lifecycle that are indicators of increased churn risk.

Key amongst these is billing of the annual fee, and because it is scheduled it is easily predicted. The annual fee can cause customers to consider competitors with lower fees, or consider closing this card account to consolidate their spend on another card they already have. Another key event indicating churn risk is redemption of rewards points. Customers who intend to churn will often redeem as many rewards points as they can before closing the account. And for customers who don’t intend to churn, the small balance remaining after a large redemption removes a barrier to churn – they have no ‘investment’ left in the rewards program to keep them committed to it. Either way, a low points balance can indicate churn risk.

Some banks also have sophisticated propensity modelling to identify customers most at risk of churn. Drivers of this propensity may include a sudden change in transaction behaviour, low spend on a premium card product, paying off a revolving balance and approaching annual fee.

Whatever the event causing the churn risk, statement messaging can be used for retention activity more cost effectively than the traditional retention campaign channels of telemarketing and DM. And because the retention message appears right on the bill at the same time as the annual fee or zero points balance, it is in the right place at the right time.

 

[DeKa]

Interesting.. So all the QF Direct Earn cards are higher churn risks for the banks as there are no points in the actual card account.

 

[eastwest101]

Interesting.. So all the QF Direct Earn cards are higher churn risks for the banks as there are no points in the actual card account.

Yes good point - the article does not seem to consider the "auto direct sweep" situation that is used a fair bit here - but Freq Flyer Schemes do get mentioned!

Objective 3 Drive engagement with rewards programs

The credit card rewards program marketplace is too competitive nowadays to rely only on points to keep customers engaged. Every bank offers a rewards card, with the most popular ones all linked to a frequent flyer scheme, making their customer value proposition generic. And just as importantly as encouraging spend to earn points, banks must also manage reward redemptions to control program liabilities and ensure that customers are engaged with the program – after all, a customer who never redeems rewards could soon tire of the program and defect.

 

[Supersonic Swinger]

Yes interesting viewing, by "revolver" you mean people whom do not pay off the full balance in the bill cycle and pay interest?

Yes, that's what the article refers to as a "revolver".

The article doesn't seem to mention what their preferred strategies are to keep a customer who has called up to cancel a card.

 

[Hvr]

Objective 5 seems to cover events that may occur prior to churning so hopefully they are identified and prevented from moving.

 

[burmans]

Interesting.. So all the QF Direct Earn cards are higher churn risks for the banks as there are no points in the actual card account.

This would absolutely be correct IMO.

 

[burmans]

Interesting.. So all the QF Direct Earn cards are higher churn risks for the banks as there are no points in the actual card account.

This would absolutely be correct IMO.

Objective 5 seems to cover events that may occur prior to churning so hopefully they are identified and prevented from moving.

I doubt I would be prevented from moving via the "statement messaging" they suggest unless that message is offering me a tangible reason to stay.

 

[Newk]

Thanks for posting. Interesting. I can see why I keep getting low interest offers: they may be trying to change me from a transactor into a revolver. Fat chance. But keep sending the low interest offers guys

 

[samas]

A low interest rate transpromotion turned me from a transactor to revolver as I bought a car on credit (0% for 6months), but they didn't do enough on-boarding so at the end of the promo I churned by means of balance transfer. I wonder when I cash out my points if they try do something before I cancel the card. lol

Another 6 months I will have broken the revolving cycle and back to a transactor

 

[quokka77]

On the other hand this document highlights the sophistication of card marketing. If card providers ever get the ability to ban points fiends (a la casinos and card counters) some aff members might be in strife

 

[ferni]

Interesting read. Goes to show how these companies think of their customers - more like farm animals, how can they squeeze the most meat out of them?

 

[ferrariz]

Interesting read. Goes to show how these companies think of their customers - more like farm animals, how can they squeeze the most meat out of them?

As opposed to treating you like a friend or family member? Companies exist for one goal - profit. If that profit can be increased by generating customer loyalty by way of better service, they'll do it. If that costs them more that they stand to earn from you, they wont. Its that simple and if anyones thinks different, they're deluding themselves

 

[ferni]

As opposed to treating you like a friend or family member? Companies exist for one goal - profit. If that profit can be increased by generating customer loyalty by way of better service, they'll do it. If that costs them more that they stand to earn from you, they wont. Its that simple and if anyones thinks different, they're deluding themselves

You can run a business/company without thinking of your customers with such disdain.

 

[Newk]

You can run a business/company without thinking of your customers with such disdain.

Yes. It was a bit uncaring wasn't it? Sadly I have long thought of myself as a good customer as I nearly always pay my bill in full.
The encouragement of ongoing credit is also of some concern IMHO

 

[Rallygirl]

It also mentioned that payments at the Post Office are very expensive. This could explain why the Newk method of payment was squashed, although you would think if that was the case it would have only been for one supplier's bill payment rather than all supplier's payments. I guess we will never know. Sorry to have taken this off topic.

back on topic - great article find Quokka77.

 

[Rallygirl]

Not sure if the author is an AFFer but I notice this was written after Quokka started this thread.
fingers crossed I can work out how to post a link....
Rewards points, low rates or interest-free days?