With inflation at a 40-year high, these are volatile days. The rising cost of everything from everyday items to luxury goods will inevitably impact consumers and the way they use their cards.
For card marketers, these times represent an opportunity to adapt the cardholder experience, change perception of your card, and improve your position in their wallet. And as recession looms, the actions you begin to take now may pay dividends in the not-too-distant future.
Step 1: Analyze your portfolio data
The first recommended step is analyzing your cardholder data. Depending on whether you are debit vs credit, rewards vs non-rewards, and other factors, how inflation impacts your portfolio may vary.
Start by baselining patterns before inflation and then analyze how spend has changed since. Have your cardholders increased or decreased spend? If so, in what MCCs (merchant category codes)? What types of spend are increasing? What are decreasing?
Taken a step further, analyze your high, medium, and low users. Have your high users increased their spend? For example, if your high users are increasing their spend on discount stores with your card, you should encourage this across the base.
Another lens is to group and analyze cardholders with significantly increased spend to understand what is driving the change. Conversely, group those with significantly decreased spend then understand why it is dropping and how you can help them.
Step 2: Tailor messaging to evolving cardholder needs
Informed by data, now explore the way you engage with cardholders and consider ways you can adapt messages that are empathetic to these times.
Let’s say in Step 1, you are seeing an increase in spending on everyday items such as groceries and gas and a notable decrease in luxury items. Leverage this insight as part of an updated approach to messaging by stressing how your card is the most convenient and secure way to make everyday purchases.
Gaining everyday spend is a tried-and-true way to establish top of wallet position. And in recession, how consumers pay for things like groceries and gas becomes more important. Stressing how your card can help keep track of those purchases and make them more secure will be messages worth doubling down on.
Another tried-and-true area worth emphasizing is financial control. When cardholders are watching every dollar more closely, how your card can help them gain greater control with online banking, mobile app, bill pay, and other tools in one consolidated view is a message that will be even more relevant.
These are just examples and thought-starters. The point is that you should understand what is going on with your portfolio, then explore messages you believe will be most effective in these times.
Step 3: Alter your campaign strategies
Beyond messaging, trends can cause you to reconsider your campaign strategies. Continuing with our example, you may decide to create a gas discount offer campaign of some kind, in lieu of the travel campaign you usually run this time of year.
If you are a rewards card, you might change some of your key campaigns and offers. In fact, the data may reveal trends significant enough for you to consider pursuing new categories or types of rewards.
Conclusion: Take action during these inflationary times
Inflation is at 40-year high. If recession hits, it will be the first time in 13+ years. All of this is happening post-pandemic. But with volatility comes opportunity. First, analyze your data to get a sense for how cardholder behavior is changing. Then explore how you can really adapt the cardholder experience and thus, improve your position in wallet.
Pragmatic is a digital and direct marketing agency providing strategic and creative services with expertise in card marketing. Check out our card marketing expertise and please reach out with any challenges we can help you solve.