Bank of America credit card production by channel: interesting trends

Bank of America recently published a breakdown of its credit card production by channel, in its second quarter 2011 Investor Fact Book.

Comparing the first half of 2011 with the full-year 2010, we see that eCommerce remains the most important credit card acquisition channel (at just over 28%), but its share fell almost 8 percentage points between 2010 and the first half of 2011.

Channels that have had the strongest share gain are:

  • Branch:  Bank of America was at the forefront of the push among leading bank card issuers to sell cards through their branches in the mid 2000’s, but this trend appeared to have lost traction in more recent years, as the financial crisis took hold.  However, there was a notable shift in the first half of this year, with branches accounting for 28% of credit card production, up more than 7 percentage points from 2010.
  • Direct mail: Traditionally, direct mail accounted for an overwhelming share of credit card production.  However, this share plummeted over the past decade, as response rates fell and new channels emerged with lower average acquisition costs.  However, this decline appears to have bottomed out, with bank card issuers now rolling out targeted direct mail campaigns to specific segments of interest, such as affluents.  DM accounted for 24% of card production in the first half of 2011, up 3.5 percentage points from 2010.

Spray & Pray: There’s A better Way

Most advisors express frustration with the volume and the frequency of promotional communications from investment product and insurance manufacturers. Research conducted by EMI and real client experience confirms this, with emails being especially high on the list. At a recent roundtable I attended, many advisors said: “we’re done with email”. Why? Because most of the communications they receive are difficult to process and deliver questionable value to their practice. So what’s a manufacturer to do?
Despite frustrations with the volume and quality of communications, advisors readily admit that they do read communications deployed by the brands they trust and value. These brands plan and manage communication streams with valuable content, use easy to process copy standards, and create a consistent narrative that demonstrate respect and thoughtfulness. These brands have earned the attention of the advisor and are therefore opened and read before the others (assuming the others are read, which is unlikely given the ease of deleting or navigating away in digital media).

So what’s a manufacturer to do? Build a systematic relationship marketing program that demonstrates respect and delivers real value. Perhaps we can call that SRM.

QR Codes: Don’t Hesitate, But Do Think

No one who sends out any significant quantity of response-driven direct mail should neglect to test the use of QR codes. Period. Given the continuing growth of the use of smartphones, it’s a strategically sound opportunity to improve response rates by facilitating the connection between a mailed piece and an electronic response. Recent data from comScore MobiLens highlights the opportunity: 14 million mobile users in the US scanned a QR code on their mobile device in June 2011 alone.

That being said, the devil, as always, is in the details. Just sticking a square filled with dots on a DM piece is a waste of effort if you don’t think through what the objective of including the QR code should be and your expectations for the entire user experience that will be activated through the code. For example:

  • Are there certain segments of your audience that are more likely to respond to QR codes and how and when are they likely to scan the codes? To answer this, you’ll need to assess what percentage of these segments own smart phones. Then you’ll need to determine the likely scenarios in which they might use those phones in response to the presentation of a QR code?
  • If the code will be used as mechanism for increasing awareness of a product or service, are you sending the QR code user to a mobile friendly website? Is the information easily and comfortably accessible on a mobile device (e.g., web pages as opposed to pdfs, which are still often hard to view on mobile phones)?
  • Will you be using the code for lead generation? If so, is your lead capture form built to be completed on a mobile device?

Working through these kinds of questions should not dissuade you from using QR codes, and it’s important to remember that the process won’t guarantee that a QR code will provide significant lift to your DM efforts. But by investing the time in planning, you will ensure that your test of integrating the QR codes will be an accurate read of their current potential impact for your audience.