Customizing credit cards to individuals
Wednesday, January 02, 2008
Capital One has launched America's first - "Do-it-yourself" credit card. It has come up with a Web site called Card Lab that gives consumers the opportunity to “build their own” credit card. The customer can choose among various options for introductory and ongoing interest rates, rewards, annual fee (or none), and card design.
The process is essentially comprised of following steps:
The process is essentially comprised of following steps:
- Indicate Credit Level based on past history
- Select Features and Rewards - like if one wants rewards in form of miles/points or cash back; the introductory APR, annual fee etc
- Pick a Design - one can choose from a given set of 9 designs or one can add own image to the card (now thats customization!)
- Review and Apply
The choices are then packaged together to create a card customized to each cardholders' personal preferences. This concept is being used in the USA for the first time whereas this has been tested before in UK and Turkey.
However, there are some trade offs in this venture. Once the applicant makes a choice, a certain number of other choices are closed for him. So, if you want no-frills, no rewards, you can get a lower interest rate. Want points or air miles? The interest rate goes up. Want a 0% interest rate for a year? Expect a higher ongoing rate. Want two points per dollar charged instead of one? Prepare to pay an annual fee.
From a marketing point of view, it does make an impact on consumers for following main reasons:
1. Empowerment
This concept gives the power in the hand of consumer to design what ever they feel like. This brings in more brand loyalty as consumer identifies more with the product.
2. Transparency
The selection process allows consumer to see the trade offs with every selection, hence consumer can know how the APR or annual fee change on selecting the desired cash back for example. The generic way of personalization was to have an online interview approach and make a product recommendation at the end of the process. This is an abstract way as consumer doesn't know what is full platter looking like.
3. Personalization
The site not only allows user to choose the features but also the card image, which can be of a memorable sunny day you enjoyed at Las Vegas. This creates an emotional connect with the consumer, an important building block in marketing.
4. Behavioral data
The data so accumulated from online behavior of consumers will go a long way in helping Capital One to understand consumer and help them design things better to command more loyalty and consumer base.
All said and done, this is one initiative a lot of marketers in cards domain will be watching out for.
Labels: Business, Marketing Practices, New Trends
posted by Jas @ 5:23 PM,
