Banks can get more from Credit Card Customers

Thursday 21st, January 2016

“There are only three ways a company can grow. First, earn more business from your current customers. Second, attract customers from your competitors. Or third, buy another company. If you can’t do the first, what makes you think you can earn more business from your competitors’ customers or from customers you buy through acquisition? ” — John Stumpf, chairman and CEO, Wells Fargo

Every banker knows that cross-selling to existing credit card customers is what will increase revenues for the bank. But how do you do it without making the wrong offer at the wrong time to the wrong customer?

Are there other ways?

Selling more to your existing customers is great – but there can be a flipside to this, if companies over use them. Which is why down-sell and usage stimulation can work. So instead of more product cross sales offers, the Bank offers to increase their credit limit. The logic is that when a customer has a higher credit limit, they will use at least some of it. Same product – but more sales. Usage stimulation.

Managing credit lines well is a great way.  – banks need to review credit limits of customers regularly to ensure they are extending the right amount of credit to them – if the limits are too rigid, it compromises the bank’s ability to grow its portfolio. Banks need to keep the best interests of the member in mind along with abiding by best practices of the industry – a balancing act that, when handled properly, can maximize both revenue and cardholder satisfaction.

Starter packs of basic credit to those in the beginning stages of establishing credit, including a low-limit credit card and comprehensive strategies that are directed at the Youth work great.

Debit cards have surpassed credit volumes – and with it interchange revenue. This, along with the current trend of decreasing margins has made non-interest revenue increasingly important in managing profitability. So it is a good idea to factor this in.

Banks need to know the total amount outstanding and the number of new accounts – the number of account holders who also have cards.

Keep an eye on the competition – see what they are offering and keep tabs on industry trends.

Increase customer lifetime value by retaining customers longer.

You can educate your customers on features that are found in products that they already own. Sometimes customers tend to jump ship because they think that another product has a feature that they think you do not.

And when customers express their desire to close a card with you, you need to go all out to retain him – extend better offers and incentives. Do whatever it takes to retain him.

It is a great idea to reward your customers for their business. Create a “loyalty program” that delivers a net customer value improvement.

Enhance your customer experience.

Get customer feedback and tune into anything that seems to signal any churn.

Stop marketing to low value customers who you know, cannot or will not buy more of your products and services.

Customers could be moved to lower cost channels. They can transact at ATMS – not necessarily a high-maintenance branch. But this can backfire as well. You can move your customers to an ATM but you will also be losing a large volume of cross -sell opportunities. When customers come into a Branch, they do what they came for and also spend a few minutes discussing other products and options with staff. These can work so much better than other outbound contact methods like phone calls and direct mail, which are usually seen as “interruptions” in the day of customers.

The best way is finding a combination of approaches that can give you a significant synergistic impact on customer value. You could, for example, combine cross sell, upsell and customer education in one campaign. Don’t get into any big investments in systems changes that come with high costs or long implementation cycles. And when you cross-sell, make sure that you choose the right channel and communicate with him at a time that works best for him. For him and not for you or your company.

Card members present great scope for cross-selling additional products and services. So market wisely, communicate with your cardholders regularly, reward them generously and protect them ferociously from fraudulent activity. And the rewards will be yours in the form of profitable members who may just stay with you for life!

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