Engage Your Best Customers
ICBA Bancard gives you all the tools you need to effectively market your credit card program to new and existing customers. From pricing card products and setting fees and terms to offering rebates and creating successful direct mail campaigns, ICBA Bancard knows what your community bank customers respond to best.
If you are creating your bank’s first card marketing plan, you may wonder what realistic goals you should set for your first three years. You need to take several factors into consideration including:
- How vigorously do you intend to market the card in its first year? Do you intend to take your market by storm, or do you simply want to provide credit card services to your existing customers?
- How attractive do you plan to make your offer? Will it be a “plain vanilla” card with moderate pricing, or one with valueadded enhancements? Will you have an introductory rate?
- In your experience, how active is your consumer credit market? How strong is the demand for your bank’s credit card?
The first step in developing any marketing plan is to decide your goals. In order to establish realistic marketing budgets, for instance, you need to estimate the size and scope of your credit card program. You have a valuable resource for setting your program goals: the experience of your ICBA Bancard peers.
The following two formulas have evolved from that experience. In the experience of ICBA Bancard participating banks, you can use 40% of the three-year figure as a goal for your first year and 30% for subsequent years, but averages are less useful in this instance.
This guideline indicates that, after three years, at least 35% of your customers – checking, savings or loan customers – will choose to carry your credit card. In order to eliminate the duplication of customers who have more than one type of account with your bank, divide the total number of customers in your Customer Information File (CIF) by 1.7 (on average, customers have 1.7 account relationships with your bank. Your bank-customer relationship totals may vary). Then multiply that result by 35%. This is a conservative goal for your bank’s cardholder base at the end of the program’s third year.
CIF Customer Base Three-Year
1.7 x (.35) = Card Account Goal
According to this formula, your bank should be able to issue 25 credit cards for every $1 million in assets. Thus, if you have $75 million in assets you can aim to
issue 1,875 accounts over the next three years:
75 x 25 = 1,875 Accounts
For some banks, these two formulas might result in markedly different numbers. Remember that these calculations are based on averages, and some characteristics of your bank may make its assets-tocustomer ratio atypical. For instance, if you have a higher ratio of retail to commercial business, you would take this into account and raise your goal. Or, if your bank is more commercially-oriented, the goal may be lower for the number of card accounts.