DES MOINES, Iowa—To gain or maintain top-of-wallet position among credit card holders, issuers must reexamine their activation and engagement strategies to compete, according to TMG Financial Services. TMGFS’ Robin Caddell said it’s paramount community financial institution issuers make their cards stand out from the crowd as early in the cardmember journey as possible.
It’s a strategy Caddell and TMGFS said they are fine tuning through data-driven engagement campaigns, one of which she explores in a new white paper, “The First 90 Days: Early Month on Book Strategy Critical to Long-Term Cardmember Loyalty.”
“In our experience, 90 days is a line in the sand. Eight-six percent of our new cardmembers activate within that first three months. Of the 14% remaining, only 5% activate after that,” said Caddell, senior marketing manager for TMGFS, which serves as both a credit card agent issuer and offers advisory services for financial institutions that want to retain ownership of their credit card portfolios. “Marketers should think of that first 90 days as the courtship period. It’s critical to make a great first impression during this time when cardmembers are leaning in, optimistic about the new relationship.”
The paper walks through an Early Month on Book (EMOB) campaign recently deployed by TMGFS targeting a specific set of new cardmembers. It addresses the methodology for audience segmentation, the tactical communications components of the campaign, as well as the results.
After executing a 90-day communications-rich strategy, TMGFS said it realized engagement levels far outweighing those of accounts not targeted by the campaign. Results include:
Faster activation – Cardmembers in the targeted group activated at 25 days on average, whereas the rest of the population activated at 30 days on average (generating five extra days of spend among targeted accounts).
Earlier balance build – Balances averaged 22% higher after the first statement cycle; 18% higher after the sixth cycle.
Greater number of purchases – Volumes were 27% higher after the first statement cycle.
Caddell concludes the paper with five tips for credit card marketers on how to create and execute an effective EMOB strategy. To read them and more, download the white paper at: tmgfinancialservices.com/first90days