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  • Yuri Kim

3 ways to optimize card customer marketing

The push to “flatten the curve” will undoubtedly have long-lasting market implications beyond 2020. Leaving no industry unaffected, marketing budgets are being scrutinized now more than ever, with entire departments being asked to justify campaign costs and demonstrate definitive ROI. And while innovation is supposedly borne out of chaos, it shouldn’t take a pandemic to coerce contemplation and reflection on whether you are getting the most out of current marketing efforts.

That said – with a collective [50+] years of card marketing experience – here are (3) Pragmatic ways to optimize your card customer marketing right now:

1. Focus marketing investments on cardholders that have the highest potential for incremental spend

Stop me if this sounds familiar:

Problem: “We need to increase our card portfolio spend.”

Proposed Solution: “Let’s construct a promotional offer to our most valued cardholders… they’re already !”

Conservative in approach, it seems intuitive to rely on your best cardholders to do the heavy lifting. After all, they’ve proven themselves more than capable thus far, right? The challenge with this is that they often have the least utilization to offer, as it pertains to the problem-at-hand. Allow me to (visually) demonstrate:

2. Incorporate targeted offers to squeeze more from non participating cardholders

Most issuers will agree on the core card programs and tactics that – if adopted – will create the stickiness known to drive ongoing engagement and loyalty; monthly recurring payment, online and mobile banking to name a few. But after establishing the initial set of communications, many will fall back on a ‘set it and forget it’ mentality. And while this approach can indeed capture a large share of the card portfolio, it’s feasible to close the gap by showing a little love to the most entrenched (stubborn?), non-participatory cardholders.

Enter targeted offers.

Design differentiated promotions that encourage specific behaviors for different segments of cardholders. Fear not, this does not require an overly complicated segmentation strategy… indeed, the level of targeting can be a simple “If-then” approach. For example:

  • If the cardholder has not enrolled in online banking after [X] months, then offer a one-time [$X] statement credit to enroll

  • If the cardholder has no recurring payments authorized, then offer [Xx points] for the initial subscription service, utility or bill set up

  • If the cardholder has not signed up for paperless statements after the first year, then offer a one-time [$X] credit if they enroll in the next [X] days

That said, while a simple targeted offer overlay is a sure-fire way to get more from your existing marketing efforts, don’t get tempted to chase your entire portfolio with this approach, which leads me to #3

3. Know when to cut loose

Even with the richest of offers and most intricately crafted personalized experiences, some cardholders will never come to ‘best customer’ fruition. And that’s ok. Cardholder churn is inevitable. Issuers should be armed with strong winback programs and focus time and resources on cardholders worth winning back, while being unapologetic in letting the unprofitable ones attrite.

(Note: Even more imperative than a winback program is a proactive retention program… but that’s a topic for another day)

Optimizing means knowing when to table certain investments and how/where to appropriately redirect your focus:

  • Minimize marketing expenditures (offers, communications, etc.) across cardholders that fail to authenticate/activate their card within 60+ days upon receipt

  • Minimize marketing expenditures (offers, communications, etc.) seeking to revive deep inactive cardholders (90+ days)

  • Reduce rewards exposure by suppressing known offer “gamers”

Looking for other ways to squeeze more from your portfolio and optimize your card marketing spend? Let us know how Pragmatic can help!


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