Category Archives: Payments

FICO distribution of card issuer portfolios shows focus on prime segment

Over the past year, many leading U.S. credit card issuers have increased their focus on more affluent segments with new cards and offers.  At the same time, these issuers have continued to try to reduce their exposure to consumers with low credit scores. A study of SEC filings for some of these issuers highlights the extent to which these efforts have led to significant shifts in the FICO distribution of their card portfolios.

  • Although Citigroup’soverall U.S. credit card portfolio fell by 5%, its prime portfolio (660+ FICO) rose by 6%, while its subprime portfolio (<620) fell by a whopping 48%.
  • Mirroring Citigroup, Bank of America’ssubprime portfolio fell by more than 40% in 2011.
  • Unlike Citigroup and Bank of America, Chase does not publish outstandings data for different FICO segments, but it did report that its prime (600+ FICO) portfolio’s share of total U.S. credit card outstandings rose from 77.9% at the end of 2010 to 81.4% at the end of 2011.

Many issuers anticipate a return to credit card outstandings growth in 2012. Based on the evidence above, issuers will be focusing their efforts on the prime segment, with new products, bonus offers, attractive introductory offers, and perhaps even lower APRs. With recovery in both economic growth and consumer confidence, the decline in near-prime and subprime portfolios should also abate.

SuperBanker: The making of a gamified conference experience

Compared with traditional training and marketing strategies, gamification – the application of social gaming theories and techniques in commercial contexts – can dramatically increase audience involvement and the degree to which communications actually change audience behavior. Firms across all industries are becoming increasingly aware of the power of gamification for business objectives, such as motivating and training a sales force or connecting with customers.

This week, EMI launched SuperBanker, an online mobile game, at SourceMedia’s 17th Annual Best Practices in Retail Financial Services Symposium. SuperBanker demonstrates the use of gamification for business purposes, and was designed to enhance attendees’ conference experience. Players could create their own superhero alter ego, and earned points for answering questions about the session presentations, networking with other players, or visiting the exhibitors at the conference.

Almost 200 top-level banking executives and service providers played the game, which culminated in an exciting fight for first place in the final hours of play. It wasn’t easy to make SuperBanker the success that it was – a delicate and detailed strategy lies behind the colorful graphics of the game.  Here’s a peek behind the curtain:

  • Fitting the imagery and tone to the audience – can a game be too fun? The theme for the game had to balance fun with seriousness, because conference-goers would be in a professional mindset while playing the game.  Rather than the traditional superhero tights, the game avatars were dressed in business suits; rather than playing through an animated world of villains and crises, players answered conference-related trivia challenges.
  • Walking the thin tightrope between engaging and too involved: A game that is too demanding will discourage participation; too easy, and it won’t be fun to play.  In a conference setting, there is an additional layer to setting the difficulty of a game: the goal of the game is not to engross players, but instead, to allow them to engage with the game and the conference itself simultaneously.  SuperBanker play was designed to be accomplished in between conference  activities; what’s more, it rewarded active participation in the conference with game points.
  •  Bringing the game into the physical world: Because a conference audience is physically located in the same place, it was important to bring the game into the physical setting in which the players were interacting via stickers, life-sized cutouts, and other things, in order to connect the game experience with the conference itself and generate continued participation.  Perhaps the most important example was a large leaderboard screen that displayed the top ten players’ scores – even though players could instantly access the leaderboard from their own devices, many walked back over to the screen to see it displayed there.
  • Creating a sense of progress and the attainability of winning: At the conference, one player pulled ahead early and maintained a solid lead throughout.  This could have discouraged others from signing up or continuing to play, but SuperBanker was designed to create a sense of accomplishment for everyone playing the game.  Players could win smaller prizes throughout the conference; every member of the team with the best average score was awarded a prize; and for the highly engaged group, there were also prizes for second and third up for grabs.  And indeed, attendees played the game to the bitter end – resulting in a last minute upset!

Say “No” to the Third Helping of Meatballs: The Strategy and Pursuit of Trigger Campaigns

Launching a trigger email is a little like going back for seconds and thirds at an all-you-can eat buffet: just because you can doesn’t mean you should. The temptation to launch a trigger campaign becomes stronger in light of the steady drum beat of email marketing experts who tell you it’s the right thing to do. However, what all this talk of email marketing “best practices” loses sight of is that, like any marketing tactic, trigger campaigns should be a logical response to a strategic problem.

The good news is that there are trigger campaign approaches that align with many common issues — you just need to figure out which campaign matches your strategic need. For example, let’s say you are a company that has made or will be making a commitment to content marketing as a driver of customer and prospect engagement. Your business model requires you to nurture contacts over a period of time until they are ready/have the need to buy. During this interval, you need to keep your company and products top-of-mind, but your response data suggests that you are not maximizing your potential to engage your audience.

In this scenario, the best application of a trigger campaign is to use your target audience’s responses to drive deeper engagement. Leveraging your available content, you can create a collection of emails triggered by a range of positive responses — clicking on an email, downloading a white paper from your website, visiting your booth at a conference — that offer the recipient “next steps” or additional information. The keys to making this kind of trigger successful are:

  • Clean data: Make sure that the email address to which you are sending the triggered email is the email address of the person who took the positive action.
  • Low friction: Make the featured content easy to consume to lower barriers to incremental engagement.
  • Timeliness: Deploy the triggered email within a day or two of the positive action to ensure that whatever spurred the initial engagement is still fresh in the target’s mind.

In our experience, triggered campaigns targeting those with a positive recent response have delivered view rates in the 60-70% range and engagement rates as high as 20%.