The Loyalty Landscape Shifts as Rewards Credit Cards Fuel Mail Volume Increase, Reports Mintel Comperemedia
CHICAGO, Dec. 20, 2010 /PRNewswire/ -- Credit card issuers are working harder than ever to retain existing customers and attract new ones. According to Mintel Comperemedia, a service that provides direct marketing competitive intelligence, credit card mailings are up dramatically from this time a year ago, and that increase is due in large part to credit card offers promoting rewards programs.
The numbers paint a clear picture with approximately 1.2 billion offers for new credit cards received by US consumers in Q3 2010, compared to just 391 million in Q3 2009. Issuers continue to focus on credit-worthy consumers, and as a result, eight in 10 offers are for rewards cards promoting points, miles or cash-back to consumers, up from six in 10 offers in 2008.
"Consumers are doggedly persistent when it comes to comparing credit card offers, and will use the rewards program with the best cash-back rate or highest points return per dollar," says Andrew Davidson, senior vice president of Mintel Comperemedia. "According to a Mintel Oxygen report on loyalty marketing, 24% of consumers actively compare credit card offers in order to compare reward programs. Competition is fierce, and contrary to popular myth, some consumers do actively compare reward offers they receive in the mail."
Consumers have become more frugal—saving more and spending less on their cards. In this environment, offers promoting cash back on purchases have become increasingly popular. Cash-back credit card offers accounted for 41% of all rewards offers in Q3 2010, compared to 28% a year ago. Furthermore, issuers are acknowledging consumers' change in spending and are now focusing on rewards that offer better returns on "everyday items." Forty-five percent of offers mentioned the word "groceries" somewhere in the mailing text in 2010, up from just 20% in 2008.
"Creative reward strategies will win new customers, but there will always be the threat from the next great rewards innovation," adds Andrew Davidson. "Therefore, issuers need to seek new ways to leverage rewards programs to seek loyal customers post acquisition."
For more information about loyalty programs, and predictions for 2011 listen to Andrew Davidson's webinar "Credit Card Strategy: A New Era for Loyalty Marketing," or download the slides here: http://tinyurl.com/CC-Loyalty-Webinar-Download.
About Mintel Comperemedia
Mintel Comperemedia provides competitive intelligence for businesses looking to advance and improve their direct marketing strategy. Tracking direct marketing (including mail, email and print advertising) targeted at consumers, small businesses and insurance agents, Mintel Comperemedia offers a unique perspective on everything from banking trends to insurance trends to credit card statistics. For more than 38 years, Mintel has provided insight into key worldwide trends, leading the industry for consumer, product and media intelligence. Follow Mintel on Twitter: http://twitter.com/mintelnews
SOURCE Mintel Comperemedia