What Credit Card Users want their Cards to do for Them
Credit card users
What Credit Card Holders Want From Their Service Providers and Merchants
Consumers are the driving force behind the activities of the marketplace, as they dictate what services and merchandise are of importance to them. Consumer demands set the trend for the business world. Business savvy financial service providers and merchants use consumer demands as indicators to develop their loyalty programs. Issuing credit cards with offers which do not appeal to customers spells bad business for service providers and merchants.
Product development should be more consumer-centric if it is to be successful. Businesses that issue credit cards should structure their loyalty programs based on the most valued indicators shown by credit cardholders. We live in a technological age and customers are becoming increasingly tech-savvy. This has created a need for real time service, regardless of difference in location between the consumer and the business. Consumers expect service providers, merchants and financial institutions to fulfill their needs whenever they want it and wherever they want it.
The Value of Customer Feedback
Researchers such as Mintel gather information on consumer preferences and highlight key factors that consumers value in a credit card. One such research revealed that consumers prefer to earn special deals, earn cash rebates which cut everyday expenses and access special experiences which include luxury destinations for trips and hotel stays. Researches such as this play a key role in product development as the end product would provide exactly what credit card holders want their cards to do for them.
A good example of using customer feedback and customer involvement to develop a product is the development of the Priority Club Select Visa Card. This initiative was a joint effort between IHG and Chase. Using direct feedback from a core group of their customers from the Priority Club Rewards cardholders group, the service providers were able to gain accurate knowledge of what their customers valued in their credit card. The Priority Club Select Visa Card is travel specific, and the feedback revealed cardholders valued features such as point earnings on every day purchases and a unique redemption rebate, no foreign transaction fees, annual free nights usable around the world and increased point earnings at IHG hotels.
IHG and Chase realized that credit cardholders were not using the cards and their associated benefits to their fullest potential and revamped their offerings to the customer. This is the desired action of a business savvy investor who values the input of their customers. With the Priority Club Select Visa Card customers now have a value filled card which is highly rated by the cardholders and not just the service providers. Card holders are satisfied that the card is worth the annual charge fees. Customer appreciation is evident in the increase in new customers and the number of existing cardholders who choose to upgrade their account.
What Do Card Holders Prefer?
Credit card customers prefer rewards for card usage. Some financial institutions such as the Bank of America Corp. have taken note of this, and have developed new products geared towards satisfying this demand. Customers were recently offered a card which will gives them 1% cash back on most spending, 2% on groceries and 3% on gas purchases. Financial Corp. now offer a cash back Mastercard which offers customers a one-time cash back bonus of $100 if they spend $500 in the first three months, and on the anniversary of opening the account they will receive a further 50% of the total cash they received during the first year. Incentives are given for cards which are used frequently.
A consumer valued credit card can only be developed if financial service providers and merchants use consumer demands in the development process rather than offering a card which dictates what they want to offer. Credit card customers feel justified in paying the annual service charge for a card that provide the things they value, and they are more likely to remain loyal to service providers who provide this card.