Following last year’s reforms to reduce wholesale interchange fees on credit card transactions, many card issuers around Australia have now turned their attention to the profitability of their credit card portfolios. They are implementing strategies of “profitable growth” rather than “net growth of cards issued.” This has resulted in organisations looking to offer some customers, (“transactors”, who tend to pay off their entire credit card balance within the interest free period), incentives to migrate to non-interest bearing “travel and entertainment” cards.

In addition to this, card issuers are increasingly implementing a range of marketing activities to ensure that the prospects they are targeting are likely to become profitable credit card customers.  While a “net growth of cards issued” approach targets those who have both a demand for credit cards and are likely to be approved upon application, a “profitable growth” strategy requires additional targeting based on the likelihood and extent of “revolve” behaviour (i.e. customers maintaining an interest-bearing rolling balance on their credit card). 

Baycorp Advantage’s Campaign Management Service assists organisations in achieving such marketing objectives. One client achieved average Cost Per Acquired Card (CPA) savings of 35%, and increased portfolio profitability of 30%, in 18 months, thanks to this “one stop shop” approach to all data-related aspects of running a direct marketing campaign (analytics, consulting, project management, data provision).

Underpinning the service is a targeted approach which ensures that the direct marketing principle of sending the “right offer to the right person at the right time” is optimised.  A range of pre-campaign “dashboard” reports and advice from our consultants ensures that the most appropriate prospects are selected from the available pool to achieve campaign objectives.

Using customer behavioural information to establish a measure of “Likelihood to Revolve”, and modelling depersonalised credit application and outcome behaviour stored on Baycorp Advantage’s unique data sets to arrive at measures of “Likelihood to Respond (to a credit card offer)” and “Credit Risk (“Likelihood to be Approved”), our consultants and analytical team arrive at the best possible prospects for our clients.

Other key benefits of our outsourced Campaign Management Service are:

• Access to 14.1 million adults and 6.5 million households stored on ProspectsPlus, Baycorp Advantage’s marketing database, which is available to clients on a “net name/household per usage” basis. It can also be licensed for multiple usage

• Ability to integrate and consolidate multiple databases, providing organisations with the flexibility to use third party or affiliate prospect lists

• Suppression of prospects who are either ineligible (for example existing customers, previously rejected, recently applied etc), or those who have previously opted out of marketing campaigns

• Complete customer care, to ensure that both the client’s and Baycorp Advantage’s obligations under the Australian Direct Marketing Association’s (ADMA) Code of Practice and privacy legislation are observed

• Storage of all campaign history at a prospect level, including combinations of channel, offer and creative made by a particular client, which empowers the client to appropriately align offers depending on the re-mail status and potential value of the customer

• Full consulting capability based on a combination of thorough campaign analysis methodology (‘test – learn – refine’)

• Speed to market – an established client with multiple prospect lists, multiple offers and multiple creative treatments can have a profile in the market within ten working days.

If you would like to understand how the Campaign Management Service can improve your marketing performance, please contact Nita Andel at Baycorp Advantage Marketing Solutions on +61 2 9236 4800.