Lightbulb Moments: Spark Your Strategy (Vol.10)

May 20th, 2024 | Andrew Davidson

Comperemedia’s Chief Insights Officer, Andrew Davidson is well known for sharing the latest insights on financial services products and marketing strategies/innovations on his LinkedIn, as an event speaker and as a host on Mintel’s Little Conversation podcast. In this bi-weekly recap, he will provide you with the latest news and insights happening in the financial services industry.

Here are the 6 things you need to know:

1. Bilt launches Blade benefits

Bilt Rewards members received emails in April announcing “exclusive Blade benefits” including a complimentary helicopter flight between Manhattan and JFK/Newark ($195) every year for Platinum members.

  1. Platinum: Complimentary Blade flight
  2. Gold: Access to Blade lounges
  3. Silver: 10% discount on Blade flights
  4. Blue: Earn 2X Bilt points on Blade flights

Note: These benefits are in addition to the 2x points on travel earned by the Bilt Mastercard.

Source: Comperemedia Omni [03/01/2024 – 05/10/2024] as of 05/16/2024

💡 Finding new ways to stand out:

  • Value add. NY-based airline JetBlue announced a partnership with Blade back in 2022 but we haven’t seen much in the way of marketing while it focused on revamping its loyalty program. Now things seem to be heating up. In February 2024, JetBlue sent emails promoting a limited-time complimentary Blade flight for JetBlue customers who book Mint (premium seats) on select routes along with a promotion for the JetBlue Card. Bilt’s focus on urban renters and local rewards makes Blade a seamless extension of its benefits program, offering significant value to users by connecting them with perks relevant to their lifestyles.
  • Future focused. The real benefit here is not the helicopters but the long-term vision. According to Blade, it’s about the future of what it refers to as urban air mobility, “Our long-term goal is to make aviation more accessible by preparing for the adoption of EVA (Electric Vertical Aircraft) quiet, carbon-neutral and cost-effective aircraft that are currently being developed by our investors and partners.” An early partnership with Blade could be something much more significant in the years ahead if its vision for urban travel plays out.

2. Upgrade’s relentless pace

Is 2.2% about to become a trend? It looks like a test but Upgrade has sent some direct mail offers to super prime consumers promoting a new version of the Upgrade Card with unlimited 2.2% cash back on payments and no annual fee.

Launched in 2019, the Upgrade Card, “combines the flexibility of a credit card with the predictability of a personal loan” (no grace period) and has been mostly focused on the prime segment.

It isn’t clear whether this is considered an entirely new product (it’s not available online) or an evolution as the letter references the original Upgrade Card while the card art imagery references “Cash Rewards Elite” suggesting a new product name.

Source: Comperemedia Omni [03/01/2024 – 05/10/2024] as of 05/16/2024

💡 Cashbackflation continues:

  • Not the first. I posted a few weeks ago about “cashbackflation” after SoFi launched 2.2% (a 10% boost) for members who set up direct deposit with a SoFi bank account and Robinhood launched its 3% cash back card for Gold members ($5 monthly fee). As more cards offer unlimited 2% (PNC officially joined the club recently) issuers will test new ways to stand out. This 2.2% version of the Upgrade Card has no restrictions related to additional fees or membership like other recent launches but the cashback is only awarded once cardholders make their payments instead of when they spend on the card.
  • Upgrade continues with its relentless pace of innovation. Upgrade came on the scene with a personal loan back in 2017 and since the introduction of Upgrade Card (2019), it has launched checking, savings, Upgrade Shopping, BNPL and numerous iterations of the Upgrade Card to meet the changing needs of consumers. Upgrade is setting the pace when it comes to innovation and banks/card issuers need to accelerate their speed to market to match the evolution of consumer needs.

3. Capital One complies

In a somewhat surprising move, Capital One updated its rates and fees information for credit cards advertised on its website to show $8 late fees ahead of the May 14 deadline set by the CFPB. The bank had stated on its Q1 earnings call that it was planning for October, hence my surprise.

In an interesting twist, the CFPB’s ruling on late fees was subsequently put on hold, due to legal challenges, although legal experts have indicated that the pause will likely only be temporary. Did Capital One make the changes too soon?

Source: CapitalOne.com

💡 Cash Advance fees are the answer (or part of the answer) for Capital One: In the past 3-4 months, Capital One has steadily increased its Cash Advance fees in acquisition marketing to $5 or 5% of a cash advance (whichever is greater) from $3 or 3%. Nearly all new cards offered via its website now have both the new lower $8 late fee and the new higher cash advance fee. From what I can tell, only the Walmart Card still has the legacy $3/3% cash advance fee. Capital One has identified cash advances as an important lever to recoup some of the lost revenue from the CFPB ruling which is on pause, for now, but still likely to be implemented industry-wide.

4. Varo’s creative waitlist strategy

In March, Varo Bank announced a NEW Varo Line of Credit product that will launch this summer and the online bank is encouraging interested customers (via email) to get in line on a “priority list” and improve their position by engaging with Varo.

The Varo Line of Credit is a short-term installment loan (3-12 months) from $600-$2,000 with a one-time fee based on the amount borrowed and no interest.

Customers can improve their waitlist position with the following actions:

  • Use your Varo Bank Account
  • Increase your Direct Deposit amounts
  • Spend more with your Varo Debit Card
  • Spend more with you Varo Believe Card
  • Borrow and pay on time with Varo Advance
  • Pay recurring bills with Varo

Source: Comperemedia Omni [05/01/2024 – 05/10/2024] as of 05/16/2024

💡 Varo goes for engagement:

  • Unique. I’ve seen (and posted on) many a waitlist and I can’t recall a waitlist for a line of credit but why not take a strategy that has been popular for launching cards and banking products and apply it here?
  • Engaging. Waitlist gamification isn’t new for fintechs but what stands out is the extent to which Varo is encouraging customers to engage across a wide range of activities in order to improve their position on the list. Varo will then prioritize its most engaged customers with the new Line of Credit.
  • Timing. With many Americans stressed out about their finances and consumer confidence waning the timing couldn’t be better for Varo to offer extended access to credit with a transparent cost.

5. Citi launches Strata Premier

The long-rumored Citi Strata Premier Card has launched as an enhanced replacement for the Citi Premier Card.

On the name: “The new name, Citi Strata Premier, evokes a sense of ambition and adventure, empowering cardmembers to reach new heights and unlock their passions” – Citi

Rumors have been circling about Strata for a couple of years after Citi stopped offering its premium Citi Prestige Card back in 2021 and then took out trademarks for Strata Premier and Strata Elite in 2023.

💡 As goes Chase, so goes the nation:

  • According to The Points Guy, not much has changed beyond the card art and 75K bonus but the name change is the key as it unlocks the potential for Citi to grow into the Strata brand as a new suite of travel-focused cards with the potential for a premium Strata Elite product on the near horizon.
  • Banks seem to be increasingly following the Chase Sapphire model of offering tiered branded products with Venture (Capital One), Autograph (Wells Fargo) and now Strata emerging as travel-focused bank card brands that go beyond a single product.

6. 40 years of Amex Platinum

Where were you in 1984? Many American Express Platinum Card Members were barely a twinkle in their parent’s eyes when the iconic card was launched back in 1984.

The $695 annual fee card has generated strong demand among Millennial and Gen Z consumers according to Amex who launched a 40th anniversary promotion via email.

The promotion includes:

  • Complimentary 3rd night at select hotels
  • 40% more points when transferring to Hilton
  • Special access to restaurants for 40 nights via Rest
  • A special Platinum 1984 cocktail served at Centurion Lounges
  • And more (see press release)
Source: Comperemedia Omni [05/01/2024 – 05/10/2024] as of 05/16/2024

💡 Unlocking value moments:

  • Competition in the premium card segment has been heating up in recent years but Amex hasn’t taken its position for granted and has continued to innovate and push the value proposition of its Platinum Card to new heights.
  • The focus on premium value – where consumers willingly shell out $695 because they can see the utility (Amex claims over $1500 in value) – also means continuously making sure that perception of value is top of mind. Card issuers should creatively seek to unlock value moments, like Amex’s 40th-anniversary campaign, to elevate relevance and engagement.
Andrew Davidson

Andrew Davidson

Andrew Davidson is SVP, Chief Insights Officer for Comperemedia, an expert in consumer and marketing intelligence.