Customer Loyalty Walks Hand-in-Hand with Discover Financial Services

Any marketer would love to wear the proverbial crown of customer loyalty king in its respective industry for one year. This estimable honor was bestowed on Discover Financial Services recently for the 20th consecutive year.

During the company’s April 19 first-quarter earnings call, CEO David Nelms noted this amazing achievement.
“Last quarter, we were recognized as highest in customer loyalty in the annual Brand Keys survey,” Nelms said, according to Seeking Alpha. “This marks the 20th consecutive year that we’ve earned the top spot. I believe our focus on the customer has allowed us to have some of the lowest attrition rates in the industry and will continue to allow us to grow loans profitably.

Discover’s lending products are performing well, Nelms explained.

The organic student loan portfolio increased 15% and personal loans grew 9% over the prior year. The strong organic student loan growth was driven by disbursements related to students going back to school for the second semester and a continued focus on increasing awareness of Discover student loans.

On the funding side, Discover recorded a 6% sequential increase in direct-to-consumer deposits.

“Our consumer deposits grew approximately $2 billion and made up 45% of funding at the quarter end,” Nelms said. “We captured the growth as investments in marketing over the last several months delivered positive results, specifically in savings accounts and balances. Moving to our payments business, total volume for the segment declined, as increases in network partners and Diner’s Club volume were offset by year-over-year declines in debit volume at PULSE. We believe PULSE volumes will stabilize at approximately current levels for the remainder of the year. Lastly, in payments, we continue to leverage our proprietary network to deliver great returns in our card issuing business and are pleased with the increasing domestic and global acceptance. Overall, it was a good quarter and we’re making progress against our key focus areas for the year.”

Discover delivered net income of $575 million for the quarter.

“Our brand, rewards, and overall value proposition remained focused on the prime revolver segment, which we believe is the most profitable part of the card market,” Nelms added.

Recent Content

Membership and Pricing

Videos and podcasts

Membership and Pricing