Does Personalization Really Persuade Your Cardholders?
Credit cards remain far more profitable than other types of banking, according to a recent Federal Reserve report. So there’s no mystery why issuers have accelerated their marketing, prompting customers to carry more credit cards. But with more than one billion U.S. credit, debit and prepaid cards already in circulation — the average credit-card owner carries 3.7 cards — issuers are finding it harder to attract new customers. Stuck with a saturated market, issuers are increasingly churning out cards that are more “personalized” to attract cardholders.
Nowadays, there are limitless options in credit card personalization. Cardholders can choose their own card style, APR rate, rewards preferences, security features, and even card material — titanium, plastic, gold or biodegradable. But do these options actually persuade customers to open new card accounts and increase usage? The short answer is “yes”, they do.
Competing brands create noise and distractions that can steer the most committed cardholder away from their favorite card product. So, how do issuers drive their card to “top of wallet”? One way to increase cardholder loyalty is through card personalization — card designs and features that match the cardholders’ needs (and personalities).
No two cardholders are exactly alike – and neither should the cards offered to them.
The success that issuers find with card personalization is explainable on a psychological basis. People love to express themselves in every aspect of their lives — including the plastic in their wallet. The more someone can relate to their card on a personal level, the more likely they are to use it. W. Keith Campbell, a psychology professor at the University of Georgia, commented on card personalization to CreditCards.com. “Personalizing is a way of adding uniqueness. It makes cards seem like a part of you. It's part of your self-image, so you're more likely to use it publicly or show it to people. I can see pulling one card out of my wallet rather than others for that reason. It's a way of branding yourself”. When considering the basic human need for self-expression, it’s easy to see how a customer would favor a card with a family picture, alma mater, or favorite sports team over a card with a basic design.
What do a newborn baby, a Dalmatian, and Niagara Falls have in common?
This isn’t the opening line of a bad joke, but evidence of a photo “branding” card personalization trend that continues to grow. But it’s not just visual customization that’s helping to increase card loyalty and driving new accounts and transactions for issuers. Cause-related cards, rewards, security features, and APR rates can also be tailored to the individual.
Rewards and benefits are the two main reasons customers select a credit card and are key drivers of satisfaction and spend on a primary card, according to the J.D. Power 2015 U.S. Credit Card Satisfaction Study. Fifty-two percent of cardholders polled said they chose a new card for a better rewards program. Twenty-four percent said they chose a new card for better benefits.
By personally choosing what types of rewards program to enroll in, what charity to automatically donate to, or what security features to add, consumers gain a better sense of control over their finances and spending habits
Card Marketing One-to-One
Technology advances have empowered customers with 24/7 shopping opportunities, delivery on demand, and unprecedented ability to compare prices and products and services. Brands that incorporate authenticity, relevance and personalization into their products have enormous sales and marketing advantages.
Personalized payment cards complement this demand for authentic, relevant products and services — reflecting the cardholder’s preferences and lifestyles. More importantly, it enables issuers to connect with their cardholders through design and personalization — demonstrating how important each cardholder is to their business.
In this competitive, saturated card market, issuers need to continuously attract, engage and to retain their customers. By providing card customization options that match their customers’ personalities and lifestyles, issuers will continue to see new account openings — and their cards at top of wallet.