Firms' Direct Mail Conveys Credit Term Changes
Specific examples cited by Mintel included:
- Citibank--a mailing informed a cardholder of a lowered credit line because the consumer was "only using a small portion of the available credit."
- Chase and Capital One--letters informed cardholders about increased fees and new fee-calculation methods.
- Bank of America, Discover, Wells Fargo and GE Money Bank--used direct marketing to alert customers to interest rate changes.
Five of the abovementioned banks also were cited by Mintel last week for running the financial world's "most innovative and insightful" direct marketing campaigns in 2008 based on creativity, messaging and relevance:
- Discover Bank -- for using direct mail to position itself as more than just a credit card provider by promoting various Discover products together in single mailings, allowing the company to "effectively (take) on the role of a financial partner, not just a credit card provider," said Stephen Clifford, Mintel's vice president of financial services.
- Bank of America--for its Equity Maximizer Rewards Program direct mail that, "by offering customers rewards points for using their home equity Visa access cards ... found an innovative way to encourage transactions despite rough economic times," according to Clifford.
- Capital One Bank--for its Rewards Checking Account direct mail whose creative execution "would instantly "pop" against other offers in the mailbox. Bold and brightly colored, the campaign featured a flip-through format that showed a vast multitude of rewards."
- Chase Bank--for its direct mail and email promoting the +1 Student MasterCard, including a tie-in with Facebook that offered "Karma Points" redeemable in student communities.
- Citibank-- for a "seamless integration" of direct mail, email and print promoting its CitiAssist student loan--"promising to "bridge the gap" left by federal financial aid," according to Clifford.
"In this volatile year, we saw many financial institutions trim marketing budgets to control costs and maintain profitability," said Clifford. "But even with reduced ad spend, many financial services companies still harnessed direct mail and email in an effort to connect with consumers and maximize ROI. The companies we've selected all did an excellent job of combining time-relevant offers with unique creative execution."
The recent mailings containing less than stellar news for consumers also stem largely from a desire to maintain profitability. According to Clifford: "In recent months, we've seen many marketing direct mail pieces inform cardholders of new, notable changes to their accounts. With no clear end in sight for the recession and other economic troubles, many companies are altering the terms of their products and services so they can stay profitable, protect their assets and reduce their risks."
Mintel noted that new Federal Reserve rules approved last week prohibit credit card companies from raising interest rates on existing balances unless payments are more than 30 days late--but those rules will not go into effect until July 2010.
So Clifford expects card issuers to actively adjust rates and fees throughout 2009 in anticipation of the new regulations. "We'll see continued marketing direct mail communication of new account terms and conditions during 2009," he said. "We may even see issuers scale back on benefits and perks like rewards programs." Mintel Comperemedia, based in Chicago, provides direct marketing competitive intelligence to businesses, including tracking of mail, email and print advertising targeted to consumers, small businesses and insurance agents.