One challenge credit card managers face is a lack of marketing resources and some misconceptions, Kerry says. For instance, she has heard about marketing people who vetoed rewards programs because they thought the programs were inherently unprofitable.
Such situations illustrate the need for close collaboration between the marketing department and the product managers actually running the credit card program.
“Let product managers decide the types, timing, and targets for credit card promotions,” Kerry says, “based on their market knowledge.”SIDEBAR:
Marketing has been a vital part of Community Financial Credit Union’s credit card success. The $145 million asset credit union began issuing credit cards in March 2011 and initially relied on cross-selling to market them.
In 2013, full-fledged marketing promotions kicked in. The goal is to grow the credit card portfolio by about 15% this year, says Jeremy Pinard, chief lending officer for the Broomfield, Colo., credit union.
The promotions convey the benefits of Community Financial’s Platinum Rewards MasterCard. “We have one of the best rewards programs out there,” Pinard says. “It competes with the top-name brands.”
Rewards vary depending on the number of relationships the member has with the credit union. Among three relationship-based groups, rewards range from one to two points per dollar spent. The points can be redeemed for travel, merchandise, gift cards, downloads, or charitable donations.
Initially, the credit union didn’t offer a cash-back option due to the cost. Members tend to redeem cashback points immediately, Pinard explains, while they’ll let points for travel and merchandise accumulate over time.
But members wanted the cash-back option, so the credit union added it.
“We decided to do something unique,” Pinard says, “by giving a statement credit each year from November through January. That lets us compete with the cash-back programs.”
As Pinard sees it, Community Financial’s credit card is one of the most valuable products it offers to members.
A successful program, he adds, requires committing time and resources to it.
“If you have a credit card program,” Pinard says, “then have a credit card program. Don’t just stick your toe in the water. You have to go all in.”