Tracking Your Success
Prior to launching your card program, you need to create a marketing plan that can be updated annually. A marketing plan is your road-map for the marketing activities for your card program. To measure the performance and progress of your credit card program, keep careful records of your program’s operations so you will be in a much better position to maximize its strengths and address its weaknesses in the future.
The basic items your reporting system should track – outstandings, cardholder accounts, delinquencies, transaction growth and more – can be found in the Automated Card Expert (ACE) tool. Also see the “Analyze” brochure included in this kit.
There are several measures of your success in using direct mail that you will want to monitor. These figures will be helpful, as your credit card operation grows, for future decisions about investing in marketing programs. Following each mailing, you should prepare a report on the acquisition cost of the accounts gained. The formula is:
Account Acquisition Cost Calculation
A x (1 ÷ B) x (1 ÷ C)
A = Cost per mailer B = Response rate = Number of
returns divided by total number mailed C = Approval
rate = Total number of approved returns divided by
The following list of performance benchmarks will help you measure the success of your plans. Within three years of actively issuing credit cards, you should be able to achieve these benchmarks. Most of the following items can be found in the ACE tool, or calculated using figures from your monthly FIS Executive Report and BC450-XX Bankcard Statistical Report.
Number of Accounts – Strive for at least 35% of your bank customers carrying your credit card, or 25 card accounts per $1 million of your bank’s assets. (By entering your bank’s total number of DDA customers in your ACE reports DDA/Household Form, you can instantly see your penetration percentage.)
Average Outstandings – On average, national revolving outstandings are $2,325 per active account.
Percentage of Active Accounts with Balances – National active accounts with balances are 56%; community bank portfolios average 60%.
Percentage of Lines Used – 35.5% of credit lines are used by Bancard participant customers. If your rate is higher, consider adding a credit line increase program by reviewing your individual accounts for increases two times a year.
Sales Volume – This represents the amount of retail purchases made using your cards, and should average $2,400 per year per active account.
Interchange Revenue – Your interchange revenue (estimated 1.5% of sales volume) is directly related to card usage and should almost offset your total processing costs reported on your monthly billing statement.
Charge-offs – Your percentage of charged off credit card balances should be about 2.5% or lower. Nationally, this figure is as much as 6% for some national issuers.
Average Transaction Amount – The higher the transaction amounts the better. The average transaction amount for ICBA Bancard issuers is about $90. Gold,
Platinum and Business cards tend to be higher overall.
Visit other sections of the ACE tool to view a thorough examination of your credit card portfolio.