In their efforts to reach both existing and prospective customers, credit providers are using a variety of different communications tactics and messages.
When Wachovia launched its credit-card business 18 months ago, it did so with three key values in mind: respect, relationship, and rewards.
"We're setting ourselves apart from our competitors with [these] aspects of our products," says Jennifer Darwin, communications manager for Wachovia. "I'm lucky in that we were able to look at all our products and messaging from a new perspective."
Every person with a wallet seems to have a credit card and most every bank offers one. With a glut of cards to choose from, credit-card providers are using various methods of communications to reach consumers with programs and initiatives that make theirs the most appealing.
Heeding public concerns
In a sense, these programs have become the message, which, these days, increasingly addresses the economic problems with which consumers are most concerned.
Wachovia has a number of policies that have garnered more attention lately due to consumer financial troubles and talk of a recession.
"A lot of political leaders are looking at what credit-card companies are doing to customers, like repricing," says Darwin, referring to the practice of credit-card companies raising rates when customers are delinquent in payments, even if the delinquency involves a wholly different company. Wachovia makes it a policy not to engage in repricing; other policies include a one-time waive of the over-the-limit and late payment fee in the first 12 months of membership.
Darwin says stressing these policies is a focal point of all Wachovia's messaging to the media and customers. Its staff, which includes 130 new hires brought on with the credit card launch, is also encouraged to talk about these benefits.
Because the card is only currently offered to existing customers, the bank's outreach targets an audience that is already familiar with Wachovia. ATM machines present a credit card offer to Wachovia customers when they swipe their card, and existing customers that log in to the Web site can apply for a card online. Part of Wachovia's reliance on the Web taps into the younger card user's online lifestyle.
"It's a growing recognition that for Gen Y and younger, [the Web is] their primary mode of transaction in most cases," says Darwin.
However, its customer pool is also likely to already have credit cards with other larger card issuers. The Nilson Report, a publication focusing on worldwide payment systems, ranked Wachovia number 17 on its list of top issuers of general purpose cards in the US in their February 2008 issue (see sidebar).
"Externally, we have a hard time overcoming the fact that we're still a small provider," says Darwin. "You have to cut through the noise and say you provide a product that's better than the ones they already have."
Citi Cards has 160 million customers covering everyone from the very wealthy to the college student. It, too, sees the value of the Web in reaching all of those customers. However, the conservative message of its tagline "Use credit wisely" is applied to its e-mail outreach.
"A challenge that the industry is increasingly facing is more clutter in the mailbox," says Raja Rajamannar, EVP of Citi Cards. "There's so much spam, how do you effectively reach customers? We have to keep our communications very relevant. If we keep pounding them with information that is irrelevant, they will stop paying attention."
Indeed, Citi uses its Web site and opt-in e-mails as a way to disseminate information to interested customers. One message that resonates most is identity-theft awareness and prevention. As such, www. CitiCards.com has a section dedicated to its Citi Identity Theft Solutions offerings, informing customers about fraud protection and other services that come with their card.
Rajamannar says Citi Cards also focuses on credit education, teaching consumers about their credit score, how to use credit responsibly, and other financial matters. The site, http://www.usecreditwisely.com/, offers articles and interactive tools, including a Financial Health Check, where customers can get an overview of their financial well-being by tallying their income, expenses, and financial goals.
"The best way to educate a customer is during good times," he says.
Washington Mutual (WaMu) also targets a large spectrum of consumers, but first assesses potential clients based on risk before granting a card. Once a new card member is added, financial education becomes a critical component of the company's messaging, says Alan Elias, SVP of corporate communications at WaMu.
The company lets customers look at their FICO score, the credit score used by banks and other lenders, at no charge. The bank also uses partnerships with community groups, ANRs, and MAT releases to weave information about their free FICO offer into other financial education messaging.
"There's a goal of reaching out to the entire card portfolio and providing them with good, solid financial materials to help them manage their credit," Elias adds. "There's a need for educating consumers across the spectrum."
WaMu doesn't limit its financial education initiatives to existing and potential customers. The CAN program (Committed and Active Neighbor) sends staffers to schools in communities that are part of its nationwide branch network to teach kids of all ages the basics of financial and credit education.
Elias says WaMu has limited some of its marketing because of the current state of the economy, but isn't too shaken by it.
"We're still in growth mode, but we're doing it very prudently," he says. "You're always going to have losses. That's part of the game."
Credit cards by the numbers
Top three US card issuers in 2007
(ranked in billions by outstandings):
Bank of America - $164.19
JPMorgan Chase - $150.46
Citigroup - $110.57
Source: The Nilson Report
Credit card debt in the US
Source: Voice of America
Average amount of credit card debt carried by Americans
The number of US households with at least one credit card