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. Chase promotes a limited-time travel credit
Chase has raised the bar with its latest offer for the Chase Sapphire Preferred Card. Not only is Chase offering 60K bonus points for spending $4K in the first 3 months (worth $750 toward travel, according to Chase), BUT it is also offering, for a limited time, $300 in Chase Travel statement credits for any purchases made on Chase Travel in the first year. That’s $1,050 out of the gate to offset the $95 annual fee!
Note: Not to be confused with the Chase Sapphire Reserve ($550 annual fee) where the $300 travel statement is a permanent annual benefit.
The rise of travel credits:
- Travel credit escalation. A few weeks ago, I posted about the Capital One Venture Rewards limited-time travel credit of $250 and now here we are at $300 from Chase. Blending the sign-on bonus with a limited-time travel credit (for booking on a swanky new bank travel site) is the new strategy to win the wallets of aspiring travelers and it’s heating up.
- Why is it heating up? Despite “softening,” travel spend is still growing and is set to continue growing over the next few years. Card issuers have been focused on this opportunity, and the travel card segment is now more competitive with more innovation than ever – travel portals, lounges, points transfer, travel credits, new types of bank-branded travel cards and more! Banks need to get some return on these sizeable investments.
2. Navy Federal Credit Union launches cashRewards Plus
New card alert! Navy Federal Credit Union has launched the new cashRewards Plus credit card, offering members 2% cash back on all purchases but it will still offer its cashRewards credit card that offers 1.5% cash back. What gives?
- Target: Navy Federal’s 14 million members (Department of Defense, Coast Guard and their families)
- 2% cash back
- $200 sign-on bonus for spending $2K in 90 days
- $98 statement credit for annual Walmart+ membership
- No annual fee, BT fee, foreign transaction fee OR cash advance fees!
- APR: 15.90% – 18.00%
Credit limit split. Members who apply and are approved for a credit limit of $5K or more will get cashRewards Plus with 2% cash back. Those approved for a credit limit of less than $5K will get cashRewards with 1.5% cash back.
Unique approach:
- The challenge will be the messaging. The credit-limit split is unique, but to avoid member disappointment, the challenge will be the messaging. The application page suggests NFCU will take a “find out which of our two great cards is ‘the one’ for you” approach in its marketing for cashRewards Plus, which makes sense, but pushing 2% and avoiding confusion will be a balancing act.
- The Walmart+ factor. By launching a flat rate 2% cash back card, Navy Federal joins an expanding list of issuers offering what is still the best rate in the market BUT I say expanding list and that is the key, because 2% is great, but it isn’t the differentiator that it once was. By including a $98 statement credit for Walmart+ membership (a benefit it has offered for some time), Navy brings something extra to further strengthen the value proposition and make it stand out in a competitive market. Walmart+ is growing and has become an increasingly important part of the e-commerce landscape. The last reported numbers for Walmart+ memberships were 59 million (Oct ’22), but growth has been in “double digits” annually, according to Walmart, which would put it in the 70-80 million range. Still roughly half the size of Amazon Prime, but given the inflationary pressure on household budgets, this is an extremely well-timed benefit that is gaining relevance.
3. Barclays confirms GM partnership
Barclays US Consumer Bank will be the next credit card issuer to take the reigns of the legendary GM Card.
Timeline
- 1992 GM Card launches with Household Bank
- 2003 GM Card issued by HSBC (after Household Bank acquisition)
- 2012 GM Card launches with Capital One
- 2022 GM Card launches with Goldman Sachs
- 2025 GM Card set to launch with Barclays US
“The opportunity ahead of us is especially exciting. We’re bringing thousands of new customers to our family of brands every year, especially as we grow in electric vehicles, and we look forward to creating new opportunities to reward our most loyal customers” – Paul Jacobson, GM Executive Vice President and Chief Financial Officer.
The GM Card: 2025 Edition:
- Expecting it. The Wall Street Journal broke news of the deal in April so we were expecting it but it’s still notable given the legendary nature of this card which has been around since the early 1990s and was groundbreaking when it first launched. When the portfolio was acquired by Goldman Sachs, it reportedly consisted of 3 million+ consumers. So, assuming some growth over a couple of years plus Goldman Sachs and General Motors subsequently launched a GM Card for small business owners, it could now be in the 3-4 million cards range.
- Opportunity for expansion. The press announcement mentions exciting opportunities and calls out EV growth. According to Mintel, 74% of consumers are considering purchasing a hybrid or electric vehicle. The auto industry seems poised for innovation, particularly at the intersection where technology meets sustainability, and with value remaining as important as ever there is an opportunity to reset the GM Card value proposition to align with these trends.
- What goes around comes around! I get nostalgic about this card. It launched in the UK in 1993 as a US disruptor to the established UK card industry and caught my imagination at the start of my career in financial services research. The irony is that the establishment in the UK that was being disrupted back in 1993 was none other than…Barclaycard.
Note: The interest in EV vehicles stat (74%) has been updated since my original LinkedIn post (66%) based on a new report.
4. Interview with Anthony Merola: Head of Proprietary Products for Citi Branded Cards
“Everything we do is based on feedback from our customers” – Anthony Merola, Head of Proprietary Products for Citi Branded Cards.
Anthony leads the team responsible for some of Citi’s most exciting recent product launches and I had the pleasure of chatting with him on the latest episode of the Mintel Little Conversation podcast.
We discuss Citi’s vision to “win the hearts, minds and wallets” of customers and we go behind the curtain to get the inside scoop on Citi’s recent launches including the Citi Strata Premier Card and the excitement around the return of the Citi Sound Vault.
Staying ahead of the innovation curve:
- The customer leads the way. Citi is a credit card powerhouse but credit cards is an attractive business and many other companies from big banks to fintechs want a piece of the pie. To stay ahead, Citi is focusing on innovation, driven by customer feedback, to maintain its leadership position and outpace these emerging threats.
- Focusing on passion points. Citi’s vision is to “win the hearts, minds and wallets” by focusing on “passion points” that are important to customers, like travel, shopping and entertainment. By focusing on what consumers want and need, Citi’s goal is not only to win new customers but to build loyalty with existing customers and increase their spending on Citi cards.
5. Using the branch to advertise 3% cash back on online shopping
Sale! 3% off online shopping! This branch window ad for the Bank of America Customized Cash Rewards Card was spotted in the wild at a busy intersection in NYC (5th Avenue & 23rd Street).
- $200 sign-on bonus for spending $1K in 90 days
- 3% cash back on your CHOICE of category from gas and EV charging stations, online shopping/cable/streaming/internet/phone plan, dining, travel, drug store/pharmacy, or home improvement/furnishings
- 2% back at grocery stores and wholesale clubs
- Note: The above cash-back rates apply to the first $2500 of spending on those respective categories combined.
- 1% back on all other purchases
- BUT WAIT: Depending on your Bank of America Preferred Rewards tier, all those cash-back percentages are bumped up
- 0% intro APR on purchases and balance transfers
- No annual fee
The online shopping opportunity:
- Play to your strengths. While the core value proposition is around choice, being able to get 3% back on online shopping is what distinguishes Customised Cash from other cards in the market and so (smartly) the messaging leads with this angle in TV, display ads, and now on branch windows. Even the card image is in an online shopping cart!
- Window dressing. I had to do a double-take. Is that branch open? It looked like a retail store that was having a sale with the ad dominating branch windows on two streets. Maybe that works in a retail environment like the Flatiron District and clearly I noticed it, but it gave me “closing down sale” vibes. I think it makes sense to use the branch as a billboard in high-traffic areas, but branch window digital ads are a better way to go as they can convey a more sophisticated and modern approach that aligns more seamlessly with other channels.
- Customized Cash push. If you watched any sport during the summer, you probably noticed TV ads for Bank of America’s Customized Cash Rewards Card, not to mention its use of direct mail, video, display and email. The bank has bumped up the sign-on bonus from $200 to $300 and extended the 0% intro APR from 15 to 18 months in some targeted offers as part of the push.
Source: Comperemedia Omni [07/01/2024 – 09/30/2024] as of 10/21/2024
6. Citi brings back its Sound Vault for a new generation of card members
Citi launched Sound Vault in 2017 with partner Live Nation to give customers access to exclusive live events in intimate venues.
Sometime before the pandemic, the Sound Vault was put on hold.
Now it’s back, with the recent launch of the Citi Strata Premier Card being the catalyst and a concert with rapper and singer Jack Harlow at the recently refurbished Brooklyn Paramount.
We got an inside look at the event and the excitement was palpable among the assembled card members, influencers, media, Citi and Live Nation employees.
Battleground for a new generation:
- More relevant than ever. Live events have long been part of the credit card landscape but with competition intensifying, they are more relevant than ever. According to Mintel, 70% of young adults are interested in receiving exclusive access to events and experiences from their financial services provider. From the choice of artists to the influencers covering the event and the opportunities for Instagramable moments, the new generation was reflected in the attention to detail of the reopened Sound Vault.
- Surprise and delight. Any Citi customer could attend but Strata Premier Card members were pulled out of line and given VIP treatment in a moment that will likely make them loyal customers for life! For those who missed out on that VIP moment a big QR code was strategically placed in the Strata Lounge to apply for the card. There is always next time!
