Shouldn't Credit Card Databases Cross-Reference Spouses?

Gwynne Young
Managing Editor, CustomerThink
Member

Posted 09-Nov-2004 11:57 AM
My husband and I got our MasterCards from the same bank at about the same time. He stopped using his several years ago, without canceling it. Mine is my main credit card for online purchasing, which I do a lot of.

Mine is no-fee and earns me points that I usually save toward a bookstore cash card. I've been happy enough with it, I guess.

But it seems the bank finally caught up with my husband and decided to try to win back his business. So it has wooed him with the offer of a new cash-back card because—get this—he has been such a valued customer. Not only does he get money back for purchases (at a higher rate than my points-to-bookstore-cash-card conversion) but also he gets some other perks that I don't have.

Valued customer, my foot!

So my question is, did the bank mean to tick me off by offering someone in my own household a better deal because he didn't use his card?

Graham Hill
Guru
Member

Posted 10-Nov-2004 12:10 AM
Gwynne

Sounds like your husband has found his way on to a lapsed customer reactivation list or an acquisition campaign list. Most banks go through cycles of growth through acqusition followed by growth through cross/up-selling, followed by growth through acquisition. The acquisition cycle produces very aggressive offers which simply aim to attract customers, who will then stay until something either pushes them away, or less likely, a better offer catches their eye. It really doesn't work when something like what happened to you and your husband happens. But most banks still think accounts rather than customers, let alone households.

And now you can see how much the bank really values YOUR custom.

Did you husband take up their generous acquisition offer?

Did you cut up your card and send it back to the bank with a stiff letter of complaint?

Do you really expect your bank to know you and your husband? Or even to care a hoot?

Graham Hill
Independent CRM Consultant

Ignored post by Graham Hill posted 10-Nov-2004 12:10 AM
Gwynne Young
Managing Editor, CustomerThink
Member

Posted 10-Nov-2004 08:02 AM
Of course, I understood immediately that the point of this was to get my husband's business back. But it's interesting to me that, as one who has had an inactive account, he appears—based on the offering—more valuable to the company than I am, with an active account.

Will he use the card? Who knows? They're sending him a new one. I know he never got around to even activating the last ones they sent.

Will I cancel? Probably not, but I do have other cards, and I think I'll start using them a bit more and this one a bit less.

Graham Hill
Guru
Member

Posted 10-Nov-2004 11:44 PM
Gwynne

I will take you to task on one of your apparent assumptions—that the bank was trying to get your husband's business back.

Your assumption is based on the premise that the bank is actually thinking about how it manages customers at various stages in their lifecycle and then responding in an appropriate way. In this case, the bank responding to the fact that your husband is a lapsed but not yet defected customer by making a re-activation offer.

Some banks do actually seek to actively manage customers through their lifecycle. I don't mean crude stuff like using predictive models to simply cross & up-sell additional products, but actually understanding different customer segment's needs, wants & expectations at different stages in the lifecycle and then responding in an appropriate way. This will not only provides the right product, service or information to the customer at the right time, but also profit from their provision, both in the short term through incremental sales, and in the longer term through developing new options for future customer value growth and reducing customer risk.

Your bank appears not even to be doing that, but simply to be mailing a large list of potential credit card customers with an aggressive offer, in the hope that enough of them will buy to turn a healthy profit. It is more akin to shouting at a population of potential customers rather than talking to or with individual ones. That doesn't require hardly any thinking at all and it requires absolutely no understanding of customers at all. You can make your own assumptions about the banks's interest in its customers.

Your response is typical of most customers. Your husband may take up the card again and use it. You may reduce your spending a bit but won't stop using the card. The bank doesn't exactly win, but it certainly doesn't lose either. And in the longer-term nothing will change. This makes the same behaviour from the bank more likely to happen in the future.

Much of bank marketing is driven by the laws of large numbers. It is only when the individuals who collectively make up the large number respond by saying, "No Thanks!", that they will change their approach. Luckily for most banks, this is not at all likely to happen.

Graham Hill
Independent CRM Consultant

L. Conner
Member

Posted 12-Jan-2005 10:01 AM
I know this posting is a little dated but...I agree with the other posting but would add a little more. True most banks do not partake in elaborate marketing efforts to woo credit card customers, however, it is a profitable business and therefore requires attention. I am sure you have heard that it's cheaper to keep a customer than to lose one. Regardless of the status of the account, your husband is still an account holder and a customer. Banks become more aggressive overtime and soon rates and incentives will ease in their competitiveness. Also, many hide in the fine print specifics about the program, which can make the card less attractive than yours. Don't be upset though. They just want to keep your husband on the line and hopefully stir some spending rather than completely drop him and have to go find another sole to join.