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. Enhanced Gold Card customer communication
Amex Gold cardmembers received email and direct mail communications in August outlining changes, including new credits and an increase in the annual fee:
- New: $84 Dunkin’ Credit
- New: $100 Resy Credit
- New: Dining Credit now includes Five Guys
- New: Annual fee increased to $325 from $250
This is the American Express product design playbook in action:
- Strengthen value
- Leverage partnerships
- Make membership meaningful
- Increase the price
Make hay while the sun shines:
Amex continues to deploy its product design playbook as it works through 40 product refreshes this year. There is no reason not to as consumers seem undeterred by the price increases when the value message is effectively conveyed.
Each time they do it you wonder whether it will work. As an Amex Gold card member myself, the significant increase in the annual fee (from $250 to $325) is jarring, but the new Resy credit covers it, so it becomes more of a nuisance than a reason to cancel the card. It has made me question the value, and that is the risk Amex takes. So far, it’s a risk that seems to be paying off.
2. The new GBank credit card for gaming and sports fans
A credit card for the “gaming elite” is the pitch.
The new GBank Visa Signature credit card went live about a year ago, following the re-branding of Bank of George to GBank in 2022. GBank has been expanding its marketing for the card, with new direct mail acquisition offers observed in February and July of 2024.
- No annual fee
- 1% cash back on gaming
- 2% cash back elsewhere
- $150 sign-on bonus for spending $3K in 3 months
- APR: 20.99% to 28.99%
- BIG USP = Unlike other credit cards, GBank DOES NOT treat gaming transactions as cash advances, and you can send funds directly to a wagering account with no CA fees.
Source: Comperemedia Direct [01/01/2024 – 07/31/2024] as of 08/22/2024
Finding new credit card opportunities as consumer needs evolve:
- Growth market. The gambling industry in the United States is significant and growing. In 2023, consumer spending on gambling reached an estimated $185.2 billion, marking a record high for the industry. This figure is projected to increase by 8.4% in 2024, with steady growth expected to continue, reaching approximately $252 billion by 2028.
- Changing market. The industry is seeing a shift towards online platforms, with iGaming and sports betting experiencing robust growth fueled by younger consumers. As markets evolve and consumer needs change, new opportunities emerge to create unique credit card products.
3. Credit One relaunches Wander as an Amex card
In August, Credit One Bank announced the launch of the Wander Card on the American Express network. Looking at Credit One’s website, the Visa-branded version of the card (launched in 2021) is no longer available.
It seems Amex Global Network Services (GNS) benefits won the day, with the following benefits called out in the press release:
- Up to 15% off car rentals, Platinum status, priority service, and car upgrades with SIXT
- Up to 10% off and car upgrades from Hertz
- Up to 15% off and car upgrades from Avis
- Car Rental Loss & Damage Insurance
- Worldwide Travel Accident Insurance
- Extended Warranty Coverage
Standing out in a crowded market:
- Amex benefits as a differentiator. Amex has long been a partner of Credit One, but only recently began leveraging (finally) the clout that Amex brings to benefits/experiences for its issuer partners. Not only do Credit One Wander American Express cardmembers get access to the above benefits, but they also get access to Amex Offers, Entertainment Access and Amex Essentials.
- Priceline as a differentiator. Formerly referred to in marketing as “the Credit One Bank travel partner” for booking travel, it seems Priceline is stepping out from the shadows by being included in this press announcement. Banks need to find ways to stand out in the increasingly competitive bank-branded travel credit card segment.
4. New Virgin Red Rewards Mastercard waitlist
Back in May, Virgin and Synchrony announced a new multi-year partnership for the Virgin Red Rewards Mastercard. In August, they launched a waitlist ahead of an official rollout slated for fall 2024 and kicked off an email marketing campaign.
Target: Virgin travelers including air/cruise/hotel customers.
- 40K Virgin Points sign-on bonus for spending $3K in 90 days (enough for a roundtrip flight from NY to London, according to Virgin)
- Earn 3X points at Virgin Atlantic, Virgin Voyages and Virgin Hotels
- Earn 2X points on grocery, dining, streaming & EV charging
- $99 annual fee
- Earn up to two PERSONAL PERKS per year, including: a) Flying Club reward voucher for a companion or upgrade b) Upgrade/free night at Virgin Hotels c) Up to $300 bar tab or Blue Extras perks package on Virgin Voyages
Source: Comperemedia ePerformance [08/01/2024 – 08/19/2024] as of 08/22/2024
Some unique twists:
- Industry first? Virgin is claiming an industry first, specifically that “The Virgin Red Rewards Card will be the first of its kind in the industry to span flights, cruises, and hotels,” and that seems true. I can’t think of another company that offers these three specialized services under a single umbrella. By developing a single value proposition that is flexible enough to meet the needs of these three Virgin travel brands, Virgin can market one product separately to each brand and encourage deeper engagement across the Virgin travel ecosystem.
- Unique benefits. The “exclusive” Personal Perks idea is a unique twist on benefits that empowers cardholders to mix and match across Virgin travel brands. Cardholders can choose one of six perks if they spend $15K per year, or two perks if they spend $30K. US consumers, particularly Millennials, value flexibility in credit card rewards and increasingly value experiences. Personal Perks plays into both of these trends.
5. Interview with Krista Phillips, CMO of Consumer Lending for Wells Fargo
“We came here to win” – Krista Phillips, CMO of Consumer Lending for Wells Fargo.
Krista Phillips has led Wells Fargo’s credit card business, and I was honored to talk to her on the Mintel Little Conversation podcast.
We discuss Wells Fargo’s bold vision and strategy to compete with the best in the industry. We go behind the curtain on the idea behind the Attune Card and we discuss what it’s like to work with legendary comedians Steve Martin and Martin Short!
Watch the YouTube video or listen on Apple or Spotify.
Wells Fargo wants to compete with the best:
- Pivot to cards. Wells Fargo has made a dramatic pivot to focus on credit cards and has a bold vision to crack into the top four. Getting there will take significant effort, but if Wells Fargo is able to harness the reach of an established brand with a challenger mentality and with innovative leaders like Krista at the helm, I wouldn’t bet against them having a very good go at achieving their goal.
- Closing the gap. The marketing gap between Wells Fargo and the top players in the industry remains substantial with American Express, Chase and Capital One spending roughly six times what Wells Fargo spends on marketing each year. Despite the gap, Wells Fargo has launched a steady stream of new credit card products that are competitive and developed some innovative marketing campaigns to help those products stand out. With the advantage of being a household name, Wells Fargo has been building a strong foundation and its marketing spend will continue to increase over time as the business grows.
