7 predictions for the future of credit card marketing
These are exciting times for credit card marketers. Credit cards fueled positive earnings for a number of major banks in 2019, and many are doubling down on marketing spend this year in order to capitalize on the insatiable consumer demand for credit cards. At the same time, M&A announcements and new product launches have the potential to reshape the industry. In this increasingly competitive market, having a clear message should be the number one priority for card marketers as the lines start to blur across segments and products. Here are my 7 predictions for the future of credit card marketing:
Prediction #1: Pre-launch card marketing campaigns will become the norm
Apple leveraged its Spring Event and a fintech-style email waitlist to announce Apple Card five months prior to launch, while Amex-Delta leveraged influencers and affiliates to announce new benefits three months in advance. More issuers will invest in pre-launch marketing to create buzz and boost awareness using whatever resources they can afford to deploy.
Prediction #2: Lifestyle marketing moves to the next level
Whether it’s the creative, the advertising platform or the value proposition, card marketing is increasingly reflective of the modern lifestyles of consumers today. Marketers like Capital One are leading the way with Facebook ads that reflect the diversity of lifestyles and life stages of its potential customers. Winning marketing strategies will be those that blend lifestyle and credit risk marketing effectively.
Prediction #3: Competition fuels deeper segmentation
New card segments are emerging from subprime cash back cards to no-fee airline co-brand cards. The result is potential confusion, as new products compete for the same everyday spend. When Uber promotes both its own card (5% cash back) and the Apple Card (3% cash back on Uber with Apple Pay) you know things are getting messy. Having a clear message will become increasingly important as the lines blur between segments.
Prediction #4: There will be more creative intro offers and promo campaigns
Credit card churn still keeps credit card executives up at night as they try to balance competitive incentives while minimizing exposure to those out to game the system. As a result, we will likely see more creative intro offers such as intro cash back tied to spend, annual points bonuses or promotional cash back campaigns similar to those developed by Apple or Amazon as issuers seek out new ways to encourage consumers to switch.
Prediction #5: The buzzards are circling
Credit card debt has returned to pre-recession levels and APRs are higher than they have ever been. According to Comperemedia, the average go-to APR has been above 20:00% for the past three quarters, leaving consumers exposed should the economy turn sour. A wave of new non-prime entrants are posed and ready if prime focused issuers begin to further tighten their credit standards for new customers.
Prediction #6: Credit card financing options will proliferate
Alternatives to credit cards such as personal loans and new forms of POS financing such as Affirm and Klarna are becoming increasingly popular, particularly with young consumers, but issuers aren’t going to roll over and concede those balances without a fight. The result: Card marketers will ramp promotions for an expanding (and increasingly confusing) range of financing options to compete with alternative lenders.
Prediction 7: There will be a new urgency for mobile integration
There will be a new urgency to accelerate mobile integration fueled by the emerging Generation Z (the first generation to own a phone before a credit card) and increased adoption and acceptance of mobile payments in the US. Apple Card’s mobile application via Apple Wallet set a new bar for a frictionless application process. Uber and Zerocard are also leading the trend. Card issuers need to seek out relevant moments for mobile acquisition throughout the customer journey.
Final word: The year of the message
The single thread connecting each of these 7 predictions is that it is now more important than ever to have a clear message that articulates why consumers should use your card versus competing cards. 2020 is therefore “the year of the message” because those cards that don’t do everything they can to articulate a clear message and shout it from the rooftops will struggle to stake a claim for the coveted position of being the default card in the consumer’s wallet.