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. What to do with all those points and miles
Q. What would you do if you found out you had 1.45 MILLION American Express Membership Rewards Points?
A friend of mine (and Amex Platinum cardmember since 1990) recently told me she had NEVER REDEEMED her rewards and had no idea how much she had accumulated, although she knew it was A LOT. We checked the balance and .
A. Maybe a business class Round The World ticket for the whole family from All Nippon Airways (ANA) is the solution!
“One of the best deals in the world of travel rewards,” according to 10XTravel.
The real brand magic is the emotional connection:
- Brand loyal without the points. Loyalty programs have become critical to the value prop of credit cards with Amex spending $15 BILLION on rewards in 2023 vs. $10B in 2019, but this is a compelling reminder that true loyalty extends beyond a points balance. While the Membership Rewards program remains a key pillar of the Amex offering, the real magic lies in the emotional connection, trust, and consistent value delivered over the years. These are the cornerstones that keep customers paying an annual fee of $695 even when the points go unredeemed.
- Speaking of unredeemed points. Only 7% of cardholders say they have NEVER redeemed their rewards according to Mintel. But when asked another way, 23% of cardholders said they hadn’t used their rewards in the last year, according to a creditcards.com survey, which is a significant number. This suggests card issuers need to do more to communicate points redemption and/or provide smaller redemption opportunities, as we know that redemption leads to increased engagement and satisfaction. Time to check those points/miles balances!
Source: American Express Q2 2024 Earnings Supplement, Mintel Reports, Credit Cards – US – 2024.
2. SoFi pilots new credit cards
In July, SoFi announced on its blog that it was piloting two new invitation-only cards – the SoFi Everyday Cash Rewards Credit Card and the SoFi Essential Credit Card, but provided limited details.
Pre-screened emails for Everyday Cash hit the inboxes of select members in September.
“By offering several cards, we can serve members with diverse credit backgrounds more options to select what tool works best for them” – SoFi.
- 3% cash back on dining, 2% on grocery and 1% elsewhere
- Redeem as a statement credit or for saving/investing/paying down debt via SoFi
- $200 sign-on bonus for spending $1K within 90 days (some offers did not have the bonus i.e., part of the test)
- 0% intro APR for 15 months on purchases AND balance transfers
- APR: 20.24% – 29.99%
- No annual fee or foreign transaction fees
Massive opportunity for card expansion:
- Penetrating an expanding and maturing member base. Following SoFi’s growth has been nothing short of remarkable, with the fintech now making a profit and boasting 8.8 million members in Q2 ’24, up from 6.2 million YAG. Out of that 8.8 million, SoFi has just 261K credit cards owned, and while the card is growing, the expanding member base represents a massive opportunity for card expansion.
- Infusing product growth. SoFi is a cross-selling (or xBuy to use SoFi language) marketing machine with those 8.8 million members accessing 12.8 million financial services/lending products. Inevitably, as membership expands and the company matures, product growth starts to slow and by expanding its lineup of credit cards, SoFi can inject more product growth across its membership base to fuel its relentless pace.
Source: SoFi Q2 Earnings
3. Expedia credit cards advertised at Wells Fargo ATMs!
In July, Wells Fargo and Expedia announced the launch of two new credit cards to tap into Expedia’s One Key loyalty program – the One Key Card (no annual fee) and the One Key+ Card ($99).
I posted about the launch and growth of online travel agencies in volume 15 of Lightbulb Moments.
Applications subsequently went live, with Expedia emails hitting the inboxes of One Key loyalty program members in August. But this is a joint effort, and Wells Fargo stepped up with a pre-screened email campaign for the One Key Card in September AND has been promoting both cards on its ATM screens, as I discovered on a recent visit to a Wells Fargo branch.
Source: Comperemedia Omni [09/01/2024 – 09/30/20204] as of 10/07/2024
Working together for growth:
- Sharing the real estate. Consider all of the banking products that Wells Fargo could promote at its ATMs and consider the short amount of screen/eyeball time available during a transaction and it’s pretty remarkable that Wells Fargo would dedicate any of that time to a cobrand card product particularly when it has recently launched its own bank branded travel credit cards. We’ve seen it embrace the idea of the branch as a billboard with the Bilt Rewards credit card. The bank has adopted a broader ecosystem mindset to improve the chances that these products will be successful.
- Cobrand synergy. When partners work together to advance a common goal they can unlock new synergies. The most successful partnerships seem to work when all parties are committed and pull their weight. Based on these indicators, it looks like Expedia and Wells Fargo are establishing a strong platform for growth.
4. PayPal launches PayPal Everywhere
Have you got a PayPal account? I’m guessing the answer is yes even if you’ve forgotten the password!
In an email to customers earlier this month, President & CEO Alex Chriss announced PayPal’s “LARGEST BRAND INVESTMENT TO DATE” to push it from being seen as an online-only brand to include in-store purchases.
The company launched a massive omnichannel marketing campaign (TV, Paid Social, Display, Video, and of course email) featuring comedian Will Ferrell promoting 5% cash back on up to $1,000 in a select category each month when using the PayPal Debit Mastercard.
Customers can also take advantage of merchant offers in the PayPal app in addition to the 5% back for using the debit card – what PayPal refers to as “stackable cashback offers.”
The PayPal push:
- The enigma that is PayPal. As PayPal says in its press release, “the majority of US adults have used PayPal in the last 5 years.” According to Mintel, 59% of adults have used PayPal in the last year. Either way you slice it the penetration is HUGE and bigger than the big banks. I’ve followed these numbers over the years and yet it still seems surprising to me. The company is sitting on a massive opportunity and a branding push that takes it from the online world and into the physical world could be just the ticket to unlock the potential of this huge customer base.
- Timing is everything. Despite headline inflation coming down, consumers are still feeling the pain of higher prices and are looking for more ways to save money. Emails to PayPal customers encourage them not to miss out on savings. It’s the right message at the right time.
5. Cash App partners with Strava
Health is wealth, say Strava and Cash App. The two brands have come together to launch the Cash App Health is Wealth Challenge.
- Sign up for Strava and Cash App
- Join the Cash App Health is Wealth Challenge
- Complete 45 miles of activity in 45 days
A natural fit:
- Innovative partnership. This partnership is a great fit to bring together health and wealth with the lesson for consumers of building consistent habits for both. It isn’t the only collaboration between the two brands after they recently announced a co-partnership for the HBCU Homecoming Tour – a series of running events timed to coincide with homecoming at HBCU campuses. Strava claims 125 million athletes, and the partnership is a great opportunity for Cash App to connect with them as they engage in the activities they love. It almost doesn’t matter that the chances of winning are slim (100 prizes of $450 to be randomly shared among 140K participants at the time of posting) as this group loves a challenge!
- The biggest threat you didn’t see coming. Cash App aims to be the primary financial services partner of choice for families earning up to $150K. A staggering 33% of consumers use Cash App vs 23% for Venmo and this difference always seems to generate a puzzled look among financial services marketers which is why I always say that Cash App is the biggest threat you didn’t see coming.
