Why use a credit card when your PAL will Pay?

Credit cards are important to banks, right?  Important enough, it appears, that some banks will – at least allegedly – risk bending some of the rules. As the American Banker pointed out this past August in an article on the topic, “one particular firm that drew the regulators’ attention,” says the article, “was Bank of America. Between 2016 and 2018, Bank of America was among nearly 50 large and midsize banks that underwent a special regulatory exam, which focused on sales practices, by the Office of the Comptroller of the Currency.”  The bank was also singled out for close review by the Consumer Financial Protection Bureau, which launched an investigation into whether the bank had opened credit card accounts without customers’ authorization, as Wells Fargo had done back in 2016.  So, yes, credit cards are important to a bank’s bottom line. Bending the rules, however, is not an option. How, then, can banks hold onto this extremely valuable revenue stream?

The Financial Brand alluded to the battle for credit card users and “payments disruption” in their recent blog entitled, 7 Major Trends that will Shake Up Banking in the Year Ahead. The FB cites an Accenture study that “points to credit cards as the payments segment with the highest susceptibility to disruption. The primary cause: Point-of-sale lending, also known as buy now pay later (BNPL). These solutions, pioneered by fin-techs such as Affirm, Klarna and Afterpay, enable consumers to select a credit card or installment plan either at the time of purchase or after their purchase, and typically charge only a flat fee. Research by The Ascent, a personal finance service, describes how and why Americans are taking advantage of BNPL. “Over a third (37%) of U.S. consumers between 18 and 54 have used a BNPL service,” states the report. The reasons for the switch are simple: 39% say to avoid paying credit card interest while 38% use it to make purchases that fall outside of their normal budget. The most popular BNPL at the moment? Bill Me Later/PayPal Credit.

Then there’s the digital wallet options: PayPal Wallet, Apple Pay, and Google Pay, to name a few. These companies offer their own versions of ways to pay, some of which, like banks, even offer their own cash-back cards with rewards. The Apple Card, for example, is one. The card offers daily cash back and is accessed through a convenient-to-use app. A survey by Deloitte shows that the share of shoppers making a purchase on mobile phones has doubled in the past five years. In addition, according to the survey, this year will mark the first time that more than half of those surveyed plan to use their smartphone, in some capacity, for holiday shopping online.

In order to keep their share of wallet, credit card issuers seem to be continuing to merchandise their cards with low promotional rates and rewards. Deloitte’s U.S. Payments Leader Zach Aron says “the stakes are high for banks when it comes to credit cards. It’s one of the relative bright spots for banks in payments and the top payments revenue driver, with a compound annual growth rate of between 8% and 9%.” Mobile, he says, is “far and away” how people want to pay going forward, which puts pressure on banks to become the top credit card or payment method in a person’s actual mobile wallet.  How do banks become that top digital wallet payment and can credit cards continue to be one of their “relative bright spots?”  We’ll see.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and with them, your brand.

To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage – visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.


Are you simply serving up Spam?

We all know email marketing, right?  Of course; our inboxes are inundated with emails on a daily basis. Campaignmonitor.com says that “the number of email users is expected to reach 4.5 billion by 2022. Experts generally agree that 121 business emails are sent and received each day.” That’s a fair number of emails, and I’m guessing, far fewer than most of us are receiving and sending each day. For most businesses, email marketing is a critical piece of their overall marketing strategy.  And, despite the downside we just mentioned – the sheer number of emails we get each day – email marketing can still be a very effective tool.

So, how is your email marketing performing?  Could it be more effective?  Chances are, you’re already using one of the many email service providers out there, such as HubSpot, MailChimp, or Constant Contact.  Hopefully, you’re continually updating your lists and building your messaging based on the recipient’s stage in the buyer journey. And, hopefully, you’re continually testing your emails to make sure that you’re sending the right message to the right person at the right time.

You’re not testing, you say?  That’s a shame because, with the right data, you can understand how, when, where and why your customers did, or didn’t, take the desired action upon receiving your email. And then, you can act upon it.

How does testing work?

Split testing or A/B testing as it’s sometimes called, is a method of testing where the various components that make up your email, such as the copy, images, call-to-action buttons, design, etc., are altered to form a variation of the original or “treatment”. That treatment is then compared with the original or “control” and their performance compared in terms of metrics such as opens and click-through rates. An A/B test, which is actually a lot easier to do than it may sound here, is a great way to learn how to:

  • improve the amount of traffic driven to your website,
  • generate webinar registrations,
  • incentivize recipients to download educational materials such as video and e-books in exchange for contact info, and more.  

What are the “variables” that you can and should test?

Start with your format, your design. There are hundreds of templates out there, each tailored for a specific purpose.  A few examples. The “dedicated send” layout, for is a good choice for an email that is designed to communicate a short news item, such as the introduction of a new product or an offer.  Short copy followed by a call-to-action to “learn more.”  Newsletter layouts are best for, you guessed it, newsletters. Personal or “friendly” letter formats can work well in those instances where your message is more brand focused than product focused.  And so on. The short of it is this: Pick a format that aligns with your objective.

Another variable worth testing is your layout, which is defined by the elements you’re including as well as their placement or “hierarchy.”  Try short copy versus long.  Try a call-to-action button in the middle of your copy and then at the end. Try different colors, fonts, type sizes.

Timing is worth testing, too. As you might imagine, Monday mornings and Friday afternoons are not good sending times.  Generally, at least according to “the experts”, Tuesdays and Wednesdays are best.  However, with time testing, you can be sure!  It’s important to know when your recipient will be open to seeing your message. Otherwise, there is no point in sending it, is there?

Subject lines. Subject lines are the email equivalent of that initial handshake, the part that sets the stage for the conversation. With an inbox full of emails, a subject line must grab your recipients’ attention immediately, then convince them that it is worth opening and reading. You really want to get the subject line right or you’ll never get a decent open rate.

Now, for the test.

While conducting your test is fairly straightforward, there are a few simple guidelines to keep in mind:

As we talked about, now that it’s test time, you should have two versions of your email; your control and your treatment. Remember, you can only change one variable per test. Only then can you be certain that the element you changed is driving the changed response.

Last but not least, your audience. In order to achieve conclusive results, you need to test with two or more audiences that are equal. In order to conduct a “fair” test, both of your email variations must have as similar a group of recipients as possible. Divide your list in two so that you can be sure that the individuals are similar demographically and psychographically. If you don’t, your test results will not be conclusive.  Last but not least, hit “send” and see how your audience responds to each.

It’s time to fine tune.

Granted, there’s a great deal of science in developing and executing an effective email marketing campaign and testing merely scratches the surface. Hopefully, though, if you’re already utilizing emails, and most of you probably are, this can at least help you fine tune your efforts.

About Bank Marketing Center.

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and with them, your brand.

To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage – visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.