Credit Card Powerpoint


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Credit Card Powerpoint

  1. 1. Client/Prospect Management Identifying the best aspects of Partnership Direct Mail Marketing To be presented to Washington Mutual Rewards and Loyalty Credit Card Acquisition team
  2. 2. Table of Contents <ul><li>General Assumptions on the Affinity Markets </li></ul><ul><li>Lessons Learned/added to current mailings </li></ul><ul><ul><li>General observations/learnings </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>List Details-List Selection Process </li></ul></ul><ul><ul><li>Copy/Offer </li></ul></ul><ul><ul><li>Testing and Offer Strategy </li></ul></ul><ul><ul><li>Rewards Programs </li></ul></ul><ul><ul><li>Affinity Customization with regards to marketing goals and integrated marketing initiatives/efforts </li></ul></ul><ul><ul><li>Tele-Call Centers </li></ul></ul>
  3. 3. General Background Information <ul><ul><ul><li>Unique/Select lists = Greater Response Rates % </li></ul></ul></ul><ul><ul><ul><li>Quality Address = Higher Usage Rates </li></ul></ul></ul><ul><ul><ul><li>Current Phone #’s = Better than normal rates </li></ul></ul></ul><ul><ul><ul><li>Consumer Segments With Strong Emotional ties </li></ul></ul></ul><ul><ul><ul><ul><ul><li>= Greater Retention Rates % </li></ul></ul></ul></ul></ul><ul><ul><ul><li>Proprietary Data with Unique Segmentation Strata </li></ul></ul></ul><ul><ul><ul><ul><ul><li> =Credit Value Scores </li></ul></ul></ul></ul></ul><ul><li>Better Segmentation heightens the value of Affinity Marketing, which in turn, cycles into Greater Profitability </li></ul>
  4. 4. General Background-Affinity Metrics <ul><li>Credit Card Response-Average% Affinity% Best% </li></ul><ul><li>Credit Card Net Rate 0.4% 0.5-07% 0.8-1.2% </li></ul><ul><li>Credit Card Charge off 5-6% 4-5% 3-4% </li></ul><ul><li>Credit Card Lapse rate 10-20% 4-6% 2-6% </li></ul>
  5. 5. General Background-Affinity Visions <ul><li>Affinity Marketing succeeds by these aspects </li></ul><ul><li>Trust </li></ul><ul><li>Belonging </li></ul><ul><li>Passion = EMOTION </li></ul><ul><li>Support </li></ul><ul><li>Pride </li></ul><ul><li>Loyalty </li></ul><ul><li>Greed </li></ul>
  6. 6. General Background-The 7 Segments <ul><li>The Emotional Link will % vary by segments </li></ul><ul><li>Each sector falls into one of 7 segments </li></ul><ul><li>Professionals who belong Job Related </li></ul><ul><li>Excited Members w/hobbies Special Interests </li></ul><ul><li>Donors/Supporters Cause Interests </li></ul><ul><li>Alumni/Student Supporters Education Interests </li></ul><ul><li>Follower/Fans w/attitude Sports/Entertainment </li></ul><ul><li>Bank's) Customers Trust Financial Interests </li></ul><ul><li>Loyal Customers Co-Branding Needs </li></ul>
  7. 7. Affinity Lessons Learned/Added <ul><li>General and Overall Assumptions </li></ul><ul><ul><ul><li>As in general marketing programs, the Offer and the Lists are the most important success factors </li></ul></ul></ul><ul><ul><ul><li>A strong direct mail package that works on one group or sector can be successfully adapted to other groups </li></ul></ul></ul><ul><ul><ul><li>Extensive Customization for a group has value only in selected cases in which the universe and affinity strength warrants customization </li></ul></ul></ul><ul><ul><li>The list Must demonstrate vitality before applying extensive group or segment customization </li></ul></ul>
  8. 8. General Observations (Continued) <ul><li>When making adaptations on the front and back end that causes costs to increase, the economic value of the affinity business model, falters </li></ul><ul><li>Given the importance of the Offer and List, don’t fail to realize the value of simple versus extended customization needs or requirements </li></ul><ul><ul><li>Create unique packages by sector to improve group level results while gaining print production scales </li></ul></ul><ul><ul><li>Utilize Affinity group name and logo to improve/increase the open and response rates via lasered vs. pre-printed groups for better results for the smaller affinity groups </li></ul></ul><ul><ul><li>Test into more effective and cost efficient packages with as many common components that is feasible </li></ul></ul>
  9. 9. General Observations (Continued) <ul><li>Strategies that work for one group and one sector can typically be applied across the board to groups/affinity segments without re-testing </li></ul><ul><li>Front End Creative Templates-good, tested standard designs. </li></ul><ul><li>Back End balance building to provide greater activation rates </li></ul><ul><li>When a partner has a weak or poor emotional trigger, the co-brand or the bank partner needs to find a stronger trigger device </li></ul><ul><li>Free Shipping </li></ul><ul><li>Free Rewards or Loyalty points </li></ul>
  10. 10. General Observations (Continued) <ul><li>The 80/20 rule is just as revelent in the affinity world as in general marketing </li></ul><ul><li>20% of the cardholders with generate 80% of the balances (Traditionally, in-active files tend not to respond to ANY kind of offer, a waste of time, resources and money </li></ul><ul><li>20% of the list will result in 80% of new accounts obtained </li></ul><ul><li>In customer marketing, don’t develop separate backend procedures for any group. Better to leverage the Affinity group by applying the logo and the brand name to the statements and the communication messages. </li></ul>
  11. 11. General Observations (Continued) <ul><li>Utilize a basic life cycle management strategy within the first 12 months of a new marketing program. After 12 months of in-activity, it is difficult and expensive to re-motivate activation among the segment selected </li></ul><ul><li>Don’t waste your time, money or resources that are just NOT going to respond to any kind of offers…move on </li></ul>
  12. 12. Affinity Lessons Learned <ul><li>Offer </li></ul><ul><li>An offer that works for the mass market 0% for 12 months is good to be transferable to the Affinity market as well </li></ul><ul><li>Unique, cost effective benefits that relate to the Affinity groups are hard to find, but they can significantly enhance response % </li></ul><ul><ul><li>Nurse/Hospice insurance coverage against HIV/AIDS exposure </li></ul></ul><ul><ul><li>CED Credit savings for Insurance </li></ul></ul><ul><ul><li>Total Automatic Free shipping for Co-Branded </li></ul></ul><ul><li>Premiums that leverage the Affinity program can positively impact response rates, and also provide incentives for mass marketing </li></ul><ul><ul><li>Cushy Stadium cushions with logo’s work for NHL/Hockey fans </li></ul></ul><ul><ul><li>Unique Family crest information with Family History outlined Unique Family crest information with Family History outlined </li></ul></ul><ul><ul><li>Electronics with company logos work for Affinity and Mass Markets </li></ul></ul>
  13. 13. Affinity Lessons Learned <ul><li>List and Segmentation </li></ul><ul><li>Groups with different levels of affinity require a constant review to remove groups with little or no affinity to the parent group. </li></ul><ul><li>The more “localized” that your group is segmented, the higher the degree of affinity attachment and alignment. (Local vs. State and Local) regional affinity, and therefore, better attachments </li></ul><ul><li>As with the mass market, “frequency and recency” is a truism for the affinity market as well. </li></ul><ul><ul><li>New Purchasers/buyers-new buyers or recent donors are the best target audiences for the affinity products </li></ul></ul><ul><ul><li>Buyers in the last 6-12 months are more likely to respond than those that have purchased 18+-months ago or more. (If you can’t make buyers work, don’t bother with the other segments </li></ul></ul>
  14. 14. Affinity Lessons Learned <ul><li>List and Segmentation </li></ul><ul><li>Previous buyers or members will respond better-Target them with a focused, campaign with personalization </li></ul><ul><li>Demographic and Transactional data from the affinity group provides a key competitive advantage over other affinity marketing alignments </li></ul><ul><li>The More ACTIVE an affinity buyer is- such as having multiple relationships with the group or other multi-buyers- the higher the expected response rates can become. For Example, members who have donated to the affinity group as well as made substantial purchases from a group/affinity catalog are higher responders than those who have done only one or the other </li></ul><ul><li>Dues paying members are more likely to respond to offers than non-paying members </li></ul><ul><ul><li>One needs to balance the size of the list vs. the degree or level of segmentation utilized. The smaller the list, the less segmentation is possible and therefore, less data to review for analysis </li></ul></ul><ul><ul><li>Don’t bother testing list segmentation if there is no rollout potential, a waste of time, resources and money </li></ul></ul>
  15. 15. Affinity Lessons Learned <ul><li>Copy and Creative </li></ul><ul><li>Proven direct response techniques work as well in the affinity marketplace as in broad markets such as stickers, or cards </li></ul><ul><li>Affinity Marketing works by capitalizing on emotions: belonging, trust, loyalty, compassion, support, pride, greed and trust. (All should be tied directly into product positioning and affinity alignment) </li></ul><ul><li>Review the marketing materials that have been successful for the affinity group: Leverage the affinity group’s own marketing intelligence team reports </li></ul><ul><li>Provide detailed information to the affinity owner and their members so that an appropriate “tone” can be achieved every The More ACTIVE an affinity buyer is- such as having multiple relationships with the group or other multi-buyers- the higher the expected response rates </li></ul>
  16. 16. Affinity Lessons Learned <ul><li>Copy and Creative </li></ul><ul><li>The greater degree of perceived personalization, while maintaining cost efficiencies, the better the results will become and be realized </li></ul><ul><li>In an affinity world…an ‘expensive looking’ design and too much “creative can reduce the creditability of the affinity offer-be aware </li></ul><ul><li>We suggest that the copy reflect the “voice of the affinity group” and not the voice of the issuer, the bank, the client or authority </li></ul><ul><li>Response enhancers such as drop in lift notes, mylar sticker decals can add more leverage and even enhance response rates </li></ul>
  17. 17. Affinity Lessons Learned <ul><li>Testing and General Strategy </li></ul><ul><li>No more than 15-20% of the available list should be tested </li></ul><ul><li>In order of importance, the factors that drive response rates are listed here: </li></ul><ul><li>1. List </li></ul><ul><li>2. Offer </li></ul><ul><li>3. Copy </li></ul><ul><li>4 Creative Design </li></ul><ul><li>Therefore, prioritize best copy and offer a friendly and familiar design package </li></ul>
  18. 18. Affinity Lessons Learned <ul><li>Testing and General Strategy </li></ul><ul><li>Once Priority testing is progressing, be sure to test cost saving options that include formats as well as different sizes and 1 st Class vs. Standard postage rates. </li></ul><ul><li>Given the complexity of the affinity business marketplace, try to keep testing to those areas which will significantly move the response meter and keep to a minimum small or meaningless tweaks to the copy or to the design </li></ul><ul><li>Consider a re-mail or re-email strategy for at least half of the mailings, for example, if there are 4 mailings a year, 2 of them should have a re-mail or re-email strategy offer to them about 3 weeks after the initial drop or send </li></ul>
  19. 19. Affinity Lessons Learned <ul><li>Reward Programs </li></ul><ul><li>Affinity cards have been slow adopters of reward programs-WHY????? </li></ul><ul><li>Financial problems and the difficulty of developing good rewards offers </li></ul><ul><li>Consumers are increasingly being exposed to reward offers and the affinity brand by itself, may not be enough to acquire and retain </li></ul><ul><li>Reward programs becoming “Me Too” offers with cash or travel related benefits, etc </li></ul><ul><li>Adding affinity rewards could provide true product differentiation </li></ul>
  20. 20. Affinity Lessons Learned <ul><li>Reward Programs </li></ul><ul><li>Robust Technology platform required to maximize success </li></ul><ul><li>Which segments require rewards strategy-not all do </li></ul><ul><li>Not all segments should qualify </li></ul><ul><li>Measurement and tracking of results with ability to segment r and payout based upon customer profitability metrics </li></ul><ul><li>Ability to incorporate affinity rewards promotionally and long term </li></ul><ul><li>Able to use currency/points to cross sell other items </li></ul><ul><li>Ability to sell currency/points to affinity and/or third parties </li></ul>
  21. 21. Affinity Customizations Spectrum <ul><li>Marketing Customization Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Direct Mail Direct Mail Direct Mail </li></ul><ul><li>Template Template Custom Copy </li></ul><ul><li>Control Ltrhd Control Ltrhd Group’s letterhead </li></ul><ul><li>Text Reference Group/liftnote Leader signature </li></ul><ul><li>Endorsement Endorsement </li></ul>
  22. 22. Affinity Customizations Spectrum <ul><li>Marketing Customization Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Telemarketing Telemarketing Telemarketing </li></ul><ul><li>Standard Script Custom Script Custom Script </li></ul><ul><li>Vendor Standard Group Affinity </li></ul><ul><li>References Vendor Affinity Script </li></ul><ul><li> Creative Design </li></ul>
  23. 23. Affinity Customizations Spectrum <ul><li>Marketing Customization Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Email Email Email </li></ul><ul><li>Standard Personalized Customized copy </li></ul><ul><li>Copy Copy On-Line PURL </li></ul><ul><li>Link to Standard copy </li></ul><ul><li>Website </li></ul>
  24. 24. Affinity Customizations Spectrum <ul><li>Policy Holder Sevice Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Fulfillment Fulfillment Fulfillment </li></ul><ul><li>Standard Standard Standard with </li></ul><ul><li> Affinity message </li></ul><ul><li> and logo’s </li></ul>
  25. 25. Affinity Customizations Spectrum <ul><li>Policy Holder Service Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Policy Holder Policy Holder Policy Holder </li></ul><ul><li>Control Group Letter Group specific copy </li></ul><ul><li>Letterhead Letterhead </li></ul><ul><li> Signature Signature </li></ul>
  26. 26. Affinity Customizations Spectrum <ul><li>Policy Holder Service Requirements </li></ul><ul><li>Minimum Maximum </li></ul><ul><li>Premium Premium Premium </li></ul><ul><li>Standard Standard “Friendly Reminders” </li></ul>
  27. 27. Affinity Customizations Spectrum <ul><li>Teleservicing </li></ul><ul><ul><li>Write scripts that are conversational based and not overall scripted </li></ul></ul><ul><ul><li>Provide telephone reps with a general understanding of the group so prospects understand that they are interacting with the group </li></ul></ul><ul><ul><li>Leverage the affinity in the call by referencing a person the member will be familiar with such as “I am calling for the Democratic Party on behalf of President Barack Obama” </li></ul></ul><ul><ul><li>Do not assume that all vendors will perform equally: There is a significant variance amongst supplier vendors </li></ul></ul>
  28. 28. Affinity Customizations Spectrum <ul><li>Teleservicing </li></ul><ul><ul><li>Do Not Fall into the trap of concluding that after an initial trial period of weak response rates that the trademark does not work as a marketing channel. Many programs start out slowly and then improve dramatically once sales reps better understand the affinity relationships and product benefits </li></ul></ul><ul><ul><li>Monitor activation rates on telemarketed accounts carefully as they tend to be lower than for the direct mailing or the emailing channels. </li></ul></ul>
  29. 29. Best Aspects of Affinity Direct Marketing
  30. 30. Best Aspects of Affinity Direct Marketing <ul><li>James E. Sullivan </li></ul><ul><li>Optic Nerve Direct Marketing </li></ul><ul><li>415-647-9462 </li></ul><ul><li> </li></ul>