Credit gets creative

Plastic cuts through with Titanic dives and zebra stripes

It used to be that credit card rewards amounted to tallying up enough points to visit Auntie Barb in Vancouver. Now, with more sophisticated reward offerings, cardholders can be treated to once-in-a-lifetime opportunities like running with the bulls in Pamplona, Spain, or earning one’s stripes as a ‘Top Gun’ aboard an MiG-25 supersonic interceptor.

To get themselves into consumers’ wallets and boost loyalty, credit card firms are targeting niche markets with new, lifestyle-driven cards that offer unique reward opportunities.

The reason for the focus on specific consumers is clear: ‘The market is really saturated with [credit] cards,’ says Sam Cukierman, Toronto-based MD of financial services consultancy Gomez Canada, who adds that the average number of cards in a Canadian’s wallet – from gasoline to wholesaling outfits – is seven. ‘To truly provide a card that is unique is tough, but there are opportunities for the creative marketer, the out-of-the-box thinker.’

According to Tarrytown, N.Y.-based Synovate Mail Monitor, in the second quarter of 2003, 55.7 million direct-mail credit card offers were received by Canadian households (with the majority of them – 77% – from U.S. issuers), up from 51.7 million in the same quarter last year.

‘Responses remain low due to the high level of clutter,’ says Andrew Davidson, VP of Synovate, who adds that in 2003, 19% of households received four offers per month, and in all, there was a 0.7% response rate.

‘Issuers have to be more creative to get the potential cardholder to open the envelope. After that, they should try to capture the individual with an enticing offer, such as an interesting use of rewards.’

Out-of-the-box thinking could very well describe the approach of CIBC and Visa, which recently introduced the CIBC Aventura Gold VISA lifestyle rewards card. Part of CIBC’s premium suite that includes the travel rewards card Aerogold, the newcomer offers point accumulation that can be redeemed for outstanding perks that range from a Viking Adventure for two in Newfoundland and Labrador, to a luxury spa retreat in Prague to a personal session with an image consultant.

‘In a credit card market that’s mature, you want to come out with something very different,’ says Ernie Johannson, Toronto-based VP marketing and business development for CIBC’s card products division.

Based on focus group research conducted in fall 2002, Johannson says consumers are seeking diversions to relieve stress. As a result, the card targets overworked Gen Xers to baby boomers looking for adventure and the finer things in life.

‘Consumers have very little time on their hands and [are looking for] something that is going to be a memorable event in their lives,’ says Johannson.

For Cukierman’s part, he believes the new CIBC card will appeal to a niche segment of consumers. ‘I don’t think the broad public will be attracted to [the card, but] there are some people that are going to be attracted to it.’

So how easy is it to earn those rewards? Every dollar spent on the Aventura card equals one point, with items starting at 10,000 points and going as high as six million for a Titanic dive expedition. Customers are also given an extra incentive to sign up to the card: New applicants receive 5,000 Aventura bonus points.

The card is being supported by a multi-channel national marketing campaign that includes print and radio by Publicis and direct mail by Brann, both of Toronto. At the core of the campaign, according to Johannson, is the Aventura Web site (cibcaventura.com), which extensively details hundreds of reward options, from fine dining to weekend getaways, that fall under the card’s tagline: ‘Journey Beyond the Familiar.’

‘What’s really key is leading customers to our Web site, where they can actually drill down into the rewards, because it’s only when you start seeing them that you actually go, ‘wow,” says Johannson.

The Web site is promoted by online banners and, at the launch of the Aventura card, actors dressed in scuba gear and tuxedos cavorted around downtown Toronto and alerted passersby to cibcaventura.com. Meanwhile, branch staff are also acting as a ‘direct sales force’ to promote the card to CIBC customers. Johannson says it’s too early to definitively assess the results of the campaign, but says she’s ‘been quite pleased with the results so far.’

Another niche entry on the credit card scene is the Holt Renfrew American Express card, introduced in early September. Designed by Italian fashion maven Roberto Cavalli, the card features a zebra-like pattern inspired by one of the designer’s dresses.

Benefits to cardholders include complimentary access to a Holt Renfrew personal shopper, advance notice of sales at the high-end boutique and invitations to preferred customer in-store events. As well, cardholders are enrolled in the Holt Renfrew Rewards program which gives one point for every dollar spent on the card, with 40% more points earned at Holt Renfrew.

‘[The card] delivers one-of-a-kind shopping benefits for a sophisticated group of Canadians,’ says Rob McClean, VP marketing for Toronto-based American Express. He adds that the Holt/AmEx venture targets affluent consumers of all ages, and the primary focus is to ‘attract new customers into the franchise.’

The marketing push includes in-store, print, PR and direct mail efforts by Toronto agency OgilvyOne that leverage the perks of using the card.

But not all of the major companies are introducing niche products to claim new customers this fall. MasterCard has not offered a new card since last September’s introduction of the Mosaik card, but rewards are still key to the company’s marketing plans. A current direct-mail initiative – part of a continuous thank-you program, developed out of MasterCard International, but tailored to a Canadian audience – is the MasterCard Value Guide.

‘We are currently using it as a thank you to our best customers,’ says Nancy Marescotti, senior manager, brand and enhancements for MasterCard’s issuing bank, BMO Financial Group. Marescotti says customers are chosen based on a number of factors, including card usage, spending levels and length of time as a MasterCard customer.

Signage throughout Toronto’s downtown entertainment district, where MasterCard is the card of choice, reminds customers of the value offer guide which gives deals on local attractions, restaurants and hotels, such as a complimentary appetizer at Tundra restaurant or a free Mamma Mia! music CD when users see the live show.

The goal of the program, which started in the spring and runs until the end of the year, is to encourage customer loyalty. ‘It’s about brand awareness and acceptance and providing customers with value-adds that they couldn’t get with another card,’ says Marescotti. ‘We feel it’s important.’

Cukierman believes this type of strategy is a good one. ‘First and foremost, credit card marketers should focus on the customers they have, by ensuring they provide good customer service and ensuring that the card is competitively positioned in the marketplace.’

He continues, ‘I believe that consumers don’t know about all of the benefits on the cards they carry. To truly offer a new credit card requires finding needs consumers have that aren’t satisfied. And that [takes a] truly gifted marketer.’