Watch the selection logic – not everyone’s a ‘great’ customer

The following column, which appears each issue, looks at new and emerging trends in direct response marketing. This column continues on the theme of my previous one - notably the benefits that businesses may achieve from actively building relationships with...

The following column, which appears each issue, looks at new and emerging trends in direct response marketing.

This column continues on the theme of my previous one – notably the benefits that businesses may achieve from actively building relationships with their customers.

This particular mailing was not sent to me, although I have absolute proof of its existence since I have the originals. The letters are ‘relationship-building’ although there is a mistake in the selection logic, in my opinion at least – a mistake that could have been fixed easily and quickly.

The first letter comes from the CIBC Dividend Card, and prominently features the following text block in the upper right-hand corner: ‘We want to thank you for being a great customer in 1999, so here’s a way to jump start your Dividend Dollars(tm) in 2000.’

The text begins: ‘You made the right choice when you became a CIBC Dividend Card(tm) holder. The $125.82 in Dividend Dollars you received in December as a credit on your statement is just one of your rewards for that decision. This special thank you, just for being a great customer last year, is another. It’s your chance to earn 1% Bonus Dividend Dollars right now, and get a head start on your earnings for this year.’

As is apparent, this copy is all about reinforcement and exclusivity. The recipient is led to believe that only ‘great customers’ received this mailing. The offer provides that such great customers will receive 1% Dividend Dollars to a maximum of $50 Dividend Dollars when they use special cheques enclosed with the mailing ‘to pay bills…to conveniently transfer balances from gasoline, higher-interest retail or other non-CIBC credit cards.’ More on the offer later.

However, another card holder received a virtually identical letter from the CIBC Dividend Card, which begins: ‘You made the right choice when you became a CIBC Divided Card(tm) holder. The $0.43 in Dividend Dollars you received…’ (Emphasis added is mine.)

Here’s the colossal mistake. A CIBC Dividend Card holder who uses the card frequently and, as a consequence, received $125.82 in Divided Dollars might be considered a ‘great customer’, but one who uses the card infrequently (and earned a paltry reward of 43 cents) could not. Or, should not!

In my view, to have credibility, this ‘great customer’ offer should have been mailed only to card holders who had earned a meaningful reward, say, $20 or more in 1999. Or, CIBC could have muted its ‘great customer’ theme and focused on its offer, namely that for a limited time, card holders could use the special cheques enclosed with the mailing to earn dividend dollars.

Any Dividend Card customer who transferred a balance from a higher-rate card (such as a gasoline or retail card) would benefit by saving some interest and earn Divided Dollars payable in December 2000. Of course, transferring the same higher-rate balance to a low-interest card would produce greater savings immediately.

The daily interest rates on a retail card, CIBC Dividend Card and 10.9% rate card (which is at the high end of the ‘low-rate’ card spectrum) are 0.07890%, 0.05054% and 0.02986% respectively. Thus, the 30-day interest cost on $5,000 would be $118.35, $75.81 and $44.79 respectively.

Since these cheques are considered cash advances, they incur interest from the date posted to the account, so by using a cheque, the cardholder would incur some interest expense.

With this offer, a CIBC Dividend Card holder could earn 50 Dividend Dollars (payable later) by incurring $75.81 in interest cost (payable now), which is the bank’s intended outcome. In fact, the only way Dividend Card holders really ‘win’ with this offer is to use a cheque as specified and then immediately deposit the equivalent amount to their Dividend Card account to minimize the interest charge.

This campaign merely provides more evidence to the conclusion that financial services marketing is a highly competitive business… one where building relationships is important to one’s long-term success. But, to build relationships, one must begin with credible messages.

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (416) 253-1224; by fax at (416) 253-4637 or via e-mail at

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.

The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.