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 dfoley@idirect.com

From Karen Howe’s dining table: Creativity, COVID and Cannes

ICYMI, The Township's founder gathers the best of the best campaigns and trends so far.

Cannes Base Camp

By Karen Howe

I’m attending Cannes from the glory of my dining room table. There’s not a palm tree in sight, yet inspiration and intel are present in abundance.

Cannes Lions is a global cultural pulse check. The social course correction in the wake of the murder of George Floyd and BLM has delivered far greater diversity in the judging panels as well as the work. And we are all better for it.

I’m proud to say that creativity defeated COVID, which speaks to its power. Great work and big ideas flourished, despite unimaginable odds.

The work from the past two years spans a vast emotional range. From the profundity of Dove’s “Courage is Beautiful” to the hyper exuberance of Burberry’s “Festive,” they are opposite ends of the spectrum, but each answered a need in us.

Take note, the ascendency of gaming cannot be understated. Smart brands have embraced the channel. It makes sense, because gamers participate to meet others around the world, not just to play. And they represent a huge and powerful community. That’s why QSR Wendy’s gamified their iconic gal in RPG’s Feast of Legends.

Burger King sponsored the unknown Stevenage Football Club, transforming the team into online heroes and vaulting BK into the fray at the same time. Once again, the brand embedded itself in culture.

The birth of gaming tourism arrived when Xbox snuggled up to travel guides and created a brilliant baby: a travel guide for gaming worlds. It, too, embedded itself in culture.

From the standpoint of social good, Reporter Without Borders showed how it worked with Mindcraft for its “Uncensored Library” to bypass press censorship, with Minecraft providing a loophole to a space where young people could be educated. It provided youth with a powerful tool to fight oppression: truth.

COVID changed us in unexpected ways. We learned how to pay attention again and there was a notable lack of 30-second commercials. Instead, longer format content thrived. Apple’s WFH was seven minutes long. Entertainment reigned king, so we find ourselves returning to our advertising roots.

Seeing competitive brands form partnerships was one of this year’s other great surprises. The brilliantly simple “Beer Cap Project” by Aguila to reduce binge-drinking saw the brand reach out to competitive beers to join in. Aguila put incentivizing (keyword: free) reminders to drink water, eat food and get home safely on its bottle caps from all sorts of fast food chains, ride-share co’s and H2O brands.

On a personal level, I’m so proud of Canada again this year. Given that it was two years of work from all over the world being judged, even making the Cannes shortlist was an accomplishment. Canada is herding in the Lions in tremendous numbers – and it’s not even over. Fingers are crossed.

KAREN-HOWE-PIC-higher-rez-300x263Karen Howe is a Canadian Cannes Advisory Board Member and founder of The Township Group