I was watching TV last week and a commercial came on for a credit card issuer. It was pretty much the same as most credit card commercials right now - how their points program was better than points programs from other issuers - and I got to wondering how we got to the point of points being a key differentiator in credit card marketing competition and whether or not that was working (he said pointedly).
This line of thinking led me to a question: if I were the CEO of a card issuer, what would I be thinking about regarding my loyalty program? After all, margins are shrinking, regulation is imposing on the space, and it’s a tough time to be in the card business. A loyalty program is a major expense item, and if it isn’t delivering a return well in excess of the expense, then maybe some re-thinking should be done.
So, here are the 12 questions that I would be asking about loyalty if I were the CEO of a card issuer:
1) Why do we have a loyalty program? Is it because we now assume that its “table stakes,” and we’ll lose market share without it? Has it just always been there, and we’ve been focusing on other things, or is it a strategic asset that makes a significant contribution to the value of our enterprise?
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