Improving Consumer Credit Card Adoption and Utilization within a Retail Bank
Client: A large financial institution with more than 5700 retail banking offices
Industry: Financial Services
Service: Voice of the Customer Research & Analysis
- Credit card accounts were pre-approved by the company, but customers were not using the credit cards
- There was not a compelling value proposition for the products being offered to customers
- Obtain Voice of the Customer data to determine what drove customers to use certain credit cards
- Use detailed statistical analysis to provide focus on the root causes of the problems
- Increased credit card activation by 10%
- Achieved $2 million in additional revenue
- Discovered that the best opportunity for activation occurs at the point of sale
- Balance transfer process was streamlined to reduce hand-offs and reduce paper
- Voice of the Customer data was used to create a persuasive value proposition
Increased Dividends – When the credit card division’s executive marketing team was ramping up their ability to provide increased opportunities to sell credit cards, they found that too few customers were taking advantage of the accounts offered by this financial institution. One marketing executive stated, “Putting more cards in the hands of our customers only to have them [the cards] put in the back of their wallet doesn’t help our customers or our business.”
A team was established and used various improvement tools for a multi-faceted approach to determine the root causes for credit card inactivity. Some of the tools the team utilized were:
- Identify barriers in the process and create solutions
- Use “Voice of the Customer” information to determine customer needs and preferences
- Use Pareto analysis to provide focus on the “vital few” root causes
- Attack the countermeasures of increased activations, such as decreasing the overall inactive rate for the portfolio
- Communicate change, measure results, and celebrate improvement
Once the team collected initial data, some interesting observations came to light. There were specific channels which were generating pre-approved credit cards. In some of these channels, less than half carried a balance on the card.
The team realized that by increasing credit card activation by 10%, they could achieve the financial goal. The team also learned that the greatest opportunity for activation occurs in the first 60 days, and preferably at the point of sale. “This is huge,” said one manager, “if you can show how this card is superior to the one they already have, then they’ll immediately start using it and gain the benefits.”
The Voice of the Customer data showed that the sales and marketing processes at the point of sale did not always lead a customer towards immediate activation. Further data analysis revealed that variation existed in the point of sale process.
One of the most compelling pieces of data analysis revealed a strong correlation between balance transfers, card activations and usage. Improving the balance transfer process at the point of sale would increase the early adoption for activation and usage, providing a persuasive value proposition for the product.
Based on the results of collecting and analyzing both qualitative and quantitative data, the team began making the following improvements to the process:
- The balance transfer process was modernized, standardized and streamlined to reduce paper as well as process hand-offs
- Revised the training process, focusing on the technical aspect and sales skills as it related to pre-approved card benefits
Contact us or call us at 1.866.986.4414 or 480.986.4414 (for international callers) for more information regarding how a Guidon solution can help your organization.