Lightbulb Moments: Spark Your Strategy (Vol.12)

June 17th, 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 5 things you need to know:

1. Apple Card back on TV

Apple Card has launched three quirky and humorous national TV ads that each lead with a unique feature of the card.

Ladder: Shows how easy it is to make a payment on the card with the message “Payments made simple.”

Sock: Emphasizes the daily cashback feature – “Get daily cash back. Spend it right away.”

Sweater: Focuses on a less-known feature of Apple Card which is the ability to easily click through each purchase by merchant and see a ton of info including transaction history, website, address, reviews, contact details and more – “Find a purchase fast in case you need to buy it again,” is the message.

Source: Comperemedia Omni [5/1/2024 – 6/7/2024] as of 6/14/2024

💡 Feature first marketing:

  • Apple Card comes out swinging. In January, Apple announced that Apple Card had surpassed 12 million customers and that it would continue to innovate and invest in the product. Despite reports of its rift with Goldman Sachs and problems with the card, this is another indicator that Apple is committed to the ongoing growth of this product.
  • Finding ways to stand out. Apple Card has received a fair amount of criticism for its value prop but what has distinguished it from other cards is its focus on a superior CUSTOMER EXPERIENCE. In this series of ads Apple Card is leaning into this advantage by emphasizing unique features, like daily cash back, that contribute to that experience.
  • Amplifying points of difference. Until this ad, I had not even considered the “find a purchase” feature promoted in “Sweater” to be an actual feature! Looking at other cards in Apple Wallet I can see that Apple Card provides much more information and transparency around each purchase compared to other cards. It’s worth finding out what makes you different and shouting it from the rooftops!

2. New Chase Freedom Rise benefit

Chase has introduced a new benefit for Freedom Rise customers via email. At each anniversary of opening the card, customers will be evaluated for an upgrade to Chase Freedom Unlimited giving them more cash back on dining, restaurants and travel.

Freedom Rise (1.5% cash back) was launched in June 2023 for new-to-credit customers who can increase their approval chances by making sure they have a Chase checking account with at least $250 in it before applying. Initially promoted in branches only, the marketing has expanded to direct mail and email.

To be considered for an upgrade, cardholders must meet a few basic requirements with the main one being “no late payments with Chase or any other lender in the last 12 months.”

Source: Comperemedia Omni [5/1/2024 – 6/7/2024] as of 6/14/2024

💡 Upgrade Path: The idea of putting a customer on an upgrade path isn’t new but committing to an annual evaluation AND promoting it as a benefit is fairly unique. Freedom Rise will already evaluate cardholders for a credit line increase after 6 months but this transparency regarding a potential upgrade to Freedom Unlimited takes it to the next level. When Chase launched Freedom Rise to target what it refers to as the “starter” segment I said it wouldn’t take a half-hearted approach and with the added value of this new benefit, Freedom Rise is quickly becoming one of the most compelling cards on the market for those seeking to get a head start on their credit journey.

3. Wells Fargo launches a self-care credit card

Wells Fargo has launched the new Attune World Elite Mastercard “designed to reward cardholders on their purchases that impact their wellbeing, their pets, and the world around them.”

Target: A broad – potentially younger – audience interested in well-being, sustainability, experiences, and being rewarded for everyday spending.

  • 4% cash back on:
    • Self-care eg gym, spa
    • Recreation eg live events, pet supplies
    • Impactful purchases eg public transport, THRIFT SHOPS😲 (thrift shops is a first)
  • $100 sign on bonus (after spending $500)
  • Limited time $50 donation to Capital Link, a non-profit focused on clean energy
  • 0% intro APR on purchases for 12 months
  • APR: 20.24%, 25.24% or 29.99%
  • No annual fee
  • NO LATE FEE 😲 In the context of the back and forth on late fees I was surprised to see this!

💡 Reflecting a cultural shift:

  • Self-care expansion. The concept of self-care has expanded beyond traditional activities like diet, exercise and stress to include community involvement and ethical practices as forms of self-care. This expansion reflects a growing mainstream acceptance of mental health issues, with 47% of consumers experiencing stress and 39% anxiety. Wells Fargo’s new card taps into this cultural shift.
  • Not your default. Would you make this your default card? Probably not but with no annual fee you could imagine pairing this card with Wells Fargo’s Active Cash Card (2% cash back) to get maximum cash back. It will be interesting to see if Wells Fargo adopts a dual-card approach in its messaging.
  • Targeted advantage. One advantage of a more targeted product over a more general product like a flat cash back card is the potential for more targeted advertising that helps the product to stand out from the pack. There are many ways that Wells Fargo could go with this in terms of creativity and it will be fascinating to see how the marketing plays out. We will be following at Comperemedia!

4. A first prescreened offer from Zip

In April, Comperemedia captured a prescreened offer for a buy now, pay later loan from Zip, an industry first for a BNPL company.

  • Loans from $35 to $250 (courtesy of WebBank)
  • Use “online, in-store, and even in restaurants” using the Zip app (thanks to a virtual card from Visa)
  • Pay in 4 installments every 2 weeks
  • $6 fee (equivalent to an APR of 41.7142% on a $250 loan according to Zip)
  • “More convenient and flexible” is the message

💡Gearing up for growth:

  • Accelerating in the US. Zip is a leading Australian BNPL company seeking to accelerate its position in the US, which it sees as an $11 trillion addressable market. Capturing this direct mail offer on Comperemedia preceded a recent statement from Zip co-founder Larry Diamond that Zip would be “stepping into a bold new phase of brand growth” after announcing that the WNBA’s Kelsey Plum would be joining as a brand ambassador. All indicators point to marketing expansion in the coming months.
  • BNPL grows up. This direct mail offer was likely a test given the low volume and short limited-time offer window but it is an example of a BNPL company moving from a purely digital approach to testing out more established methods of credit targeting. With BNPL surviving the post-covid credit environment and with the CFPB taking steps to add regulatory oversight, these are all signs of an industry maturing and establishing a firm foothold in the credit landscape.

5. Affirm and Newegg’s email campaign

Affirm began sending MILLIONS OF EMAILS in June alerting “students, faculty and staff” to its partnership with electronics retailer Newegg, where those with a .edu email address can get 10% off (up to $100) if they finance their new laptop, or computer, monitor etc. with Affirm.

The promotion was announced in March but the email campaign began ramping up in June with millions of high schoolers graduating and turning their attention to college.

Source: Comperemedia Omni [6/1/2024 – 6/12/2024] as of 6/14/2024

💡 Did you know?

  • Back-to-college spending reached a record high in 2023 averaging around $1400 per shopping household with electronics accounting for approximately 25% of that spend.
  • 54% of back-to-college shoppers searched for a discount before making a purchase.
  • 67% of Gen Zs have used BNPL over the last year, with nearly a third having done so for their back-to-college purchases.

CONCLUSION: A smart partnership and a relevant offering for a growing market.

Andrew Davidson

Andrew Davidson

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