What the Credit Card Issuers are Saying (Live from the Executive Summit)

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This morning I went to a session at the Randy Peterson Executive Summit where we got to hear straight from the credit card issuers regarding their loyalty credit cards.  In attendance were the VP of Membership Benefits from Amex, General Manager of Partnership from Chase, a VP from US Bank, and reps from Barclays and Capital One (didn’t get their titles).

I have been live Tweeting some of the comments from the session via @Mommy_Points, but here is a more detailed list of things they revealed in the roughly one hour session.  My thoughts are the ones in italics.

  • Capital One did the 100K match a couple of years to bring the spotlight to their card and get folks to try it out.  They believed once people learned about their card they would stick with it.  In other words, don’t necessarily count on it coming back.  
  • US Bank had a 15 year relationship with Northwest before their merger and it was a true partnership.  After that they were left with 15 years of data and they saw that 90% of the airline tickets their customers purchased were for less than $400.  So, they decided to offer a redemption via FlexPerks that required just 20,000 points for an airline ticket that costs up to $400.  The industry standard was 25,000 miles for a ticket, so they wanted to offer an entry point lower than that.
  • Consensus was that 100K offers are not really sustainable, but that the 30k – 50k offers have become the industry standard.  They were referred to as “table stakes” by the Chase rep.  I did not get any indication that those sort of offers are going away anytime soon.
  • Chase said in addition to the sign-up bonuses, the additional benefits tied to the card are very important in driving retention and spending.
  • Amex said that they focus on what the customer need not what the competition is doing.  But they did also say that they pay attention to things like Flyertalk to see what is going on.
  • Pretty much all of the reps said that they do very much pay attention to what the bloggers are saying about their products (and their competition’s products) and that bloggers have become a “trusted source”.  That being said, there are tons of customers outside of those who are involved with reading the blogs, so they keep it in perspective.
  • Capital One said that social media is like word of mouth on rocket fuel.
  • It was said that the next evolution/revolution in the world of loyalty cards will have to do with personalized and targeted offers (not just sign-up offers, but ongoing offers) based on data collected from transactions and social media.  Also an increase on mobile capabilities.
  • Chase said they would rather someone have two of their different rewards cards than one of their and one from another bank.  They want to have something for everyone from within their card portfolio.
  • Chase implied that they do change the sign-up bonuses for cards in part based on what their competitors are doing.
  • US Bank said the average is 2.3 rewards card per customer – they all know that we like multiple cards and they want to incentivize us to use their card for purchases. 
  • US Bank also said that they pay attention to spending patterns and may give you a targeted offer if they see you aren’t putting a certain type of purchase on their card.  This may explain my targeted Neiman Marcus offer.

All in all it was a really good session.  We matter as customers to them, and the sign-up bonuses aren’t going away any time soon.  They know they are needed to attract customers.  Expect more personalized offers going forward and a continued increase on the “soft” benefits that come with the cards like anniversary bonuses, free checked bags, spending bonuses, etc.

Now on to the next session!

 

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Comments

  1. Thank you for posting this! I was disappointed not to be able to attend today due to work (but will be at FTU this weekend). So glad to hear what they are saying!

  2. Thanks for the informative reporting!

    And sad but not surprised that BofA did not have a rep on this panel. Their marketing lags behind the other big banks and the perks on their travel-oriented cards are all nothing special.

    Will look forward to continued sign-up bonuses and personalized offers from the others though!

  3. Great post, can’t wait to hear what comes out of Delta Jeff Robertson’s mouth later…hope someone has chance to question him in a Q&A

  4. The “spend $50 at Nieman Marcus and get 3,500 bonus FlexPerks points” from US Bank deal is ridiculous. I’ve never shopped at NM before but spend $50 to get $70 worth of points? Um, sure.

  5. Tad surprised with the AMEX reps answer re: flyertalk. They’ve been stripping perks from their cards for years and FT’s HOOT and HOLLAR. yet no response, other than random 100K signup bonuses, no reason to stay.

  6. The card companies should focus on category bonuses, those are the cards people use every week. Double miles on airfare = a card that gets used twice a year to buy airline tickets. Give me some other reason to use the card.

  7. @Kay: In this case, by table stakes basically means it’s the minimum required to enter the game. That’s the usual meaning of the term in business. The meaning in poker is slightly different.

    @MP: The Neiman Marcus offer, I suspect, is to get the card out of your drawer and into your wallet. Once a card is in your wallet, you may sometimes use it for other things. As you said, you never used your US Bank card and I would use it for the same internet purchase over and over (Kiva and grocery), making it clear it wasn’t in my wallet but in a pre-entered format. I don’t have a full control data sample so just a thought!

    Thanks for the report!

  8. This was fun to read, like being a fly on the wall listening to these credit card executives.

    For me, the most interesting stuff was the trend toward more personalized and targeted offers. Manufacturers optimized their supply chain with “just in time” delivery. Sounds like marketers are doing the same with “just in time” offers. Right at the moment you’re thinking, “I need to buy an [X]” you get an online ad or direct mail promo with an offer for that very thing.

    There was a great article on this kind of data mining in the New York Times by Charles Duhigg titled, “What Does Your Credit Card Company Know About You?” Well worth reading.

  9. I stick with Amex soley for the backdating. I have 5 of their cards (3 revolvers, 2 charge) and have seen a NICE bump in AAoA and subsequently – my FICO has gone up quite nicely to boot.

  10. much appreciated mommypoints! thank you! I’ll admit it’s funny they’re called loyalty credit cards when a good number of people just use the card for a year (when the annual fee is most likely waived) and then drop it. I was hoping they’d give something to its loyal card followers (like extra bonus points for reaching a 3-year or 5-year mark with the card, etc.)

  11. I carry my Amex Platinum,Chase Freedom, Citi Platinum and Hilton Reserve. Very happy with these since the benefits outlast the signup bonuses. Personally I love my AMEX platinum. We should count our blessing, as other customers outside the US do not get any of the bonuses we have here. Not even Canada!

  12. More specifically, Chase said one of their goals is to use annual perks to drive retention. For example, some of their Southwest cards offer 6,000 Rapid Rewards points as an annual bonus, which basically offsets the $99 fee. For me it works – I never think about cancelling my Southwest cards; I do cancel some of the others.

  13. Was the Neiman Marcus actually targeted? Is there anyone with the card that didn’t get it? (or doesn’t see it once they sign in) I’m just curious, because it was in a different place from an obviously targeted bonus that I also got.

  14. I also don’t think Neiman Marcus was really targeted. I met minimum spend and did a bunch of generated spend via Wells Fargo prepaid and still saw it

  15. Thank you for this post and its been very nice to meet you at the do! I do enjoy your blog!
    .
    Im wondering what the cc reps think of manufactured spend since they must be aware of it and may read blogs, forum threads, and could attend this weekends sessions.
    .
    It appears to me they may not really mind it so long as customer X is paying his or her bills Nd not breaking and T&Cs but I am curious to hear your thoughts on this anyway.
    .
    You indicated you dont really hit the gc and pp scene to near the level of some avid followers of this and other bloggers who are heavily into miles and points and so would meeting/hearing from these reps alter that position in any way given you say, had the time to do more of such spending and the need for more coffers of all the various points out there?
    .
    But basically Id like to know what ccs think of gc buyers and pp loaders

  16. Any thoughts on how the banks might create targeted offers using social media? (This might be a question for Mr. Mommy Points).

  17. @Sam: That all depends what third party companies the banks choose to work with. Those companies can model off who you follow or who follows you or the content of your tweets… basically any data available. Targeting must get more granular in the future because every company wants a competitive edge. A great thing in my eyes.

  18. @eco mama: Amex assigns each of your cards issued from them the earliest account open date. (IIRC, only if you keep at least one account open with them.) “AAoA” = average age of account, a driver of higher credit scores.

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