Credit Card Companies Struggle To Target New Customers Through Email
Chicago (July 11, 2007)—Fearful of being spammed out of existence, major credit card issuers hesitate to use email for targeting new customers, preferring traditional direct mail instead. Mintel Comperemedia reports that between January and March 2007, not one of the top mailing credit card companies—HSBC, Capital One and Chase— accounted for more than 2% of credit card email campaigns aimed at new customers. However, during the same three-month period, these companies were responsible for over 40% of the 1.8 billion direct mail pieces sent to non-customers.
Carmen Curran, senior email analyst for Mintel Comperemedia, explains: “Major credit card companies are still testing the waters with email. They don’t want to flood potential customers’ inboxes with offers that could be immediately flagged as spam. They fear if they do, internet service providers will block their emails in the future, severely affecting deliverability.”
Leading card issuers are not alone in exercising caution when targeting new customers through email. The Direct Marketing Association reports that across all industries, only one in four current email campaigns are designed to lure in new clients.
But with Americans worried about debt and using their debit cards more, credit card companies need to find the best ways to attract new customers. Despite potential hindrances, email marketing—which costs less than direct mail and makes it easier to target specific groups of people—may well offer a solution.
In the few email campaigns that do go after non-customers, leading credit card companies rely mostly on co-branded credit cards to lure in new clients. These cards, such as Chase’s AOL Rewards Visa Card, provide a link between the card issuer and a retail organization with which the email recipient is already familiar. From January to March 2007, Mintel Comperemedia found that Chase advertised co-branded cards in almost all of its email campaigns. Bank of America, another top direct mail promoter, followed suit with over 80% of its email offers advertising co-branded credit cards.
“Many of the major card issuers have found that co-branded cards help them get a foot in the door,” says Curran. “If the emails reference a person’s pre-existing relationship with an organization, that person is less likely to mark their credit card offers as spam, especially if a reward or incentive is offered. It’s innovation and careful segmentation like this that will help credit card companies break through.”