Where Convenience Meets Currency

Today at a?Glance:

• A single key to unlock every door: we say goodbye to complex?matrices and non-intuitive pricing tables and boil down every direct mail campaign to a single score
• A price for convenience: A fee-only scenario for credit cards in 3-5 years. The consumer is ready, are you?
• Enterprise Loyalty may finally become a thing for the industry. It may be the easiest solution to stop competitor cards from entering loyal wallets
• Search engines are responsible for a third of the cards that get acquired. As AI-enabled search becomes?the norm, are we thinking in terms of audiences rather than keywords?

My friend and colleague Shafiq Rajani , whom most of you have met over the years at some point is now spending a lot of his energy, along with Patrick Rahlfs and our Data Sciences team, on our Offer Index.

(FYI, Shafiq is still working to continue to test new channels for Omni reporting; the latest and most awaited that I'm sure you'll care about is one whose name sounds like a ticking clock).

While the official launch of the Offer Index is at Money 2020, I've received enough queries that I'm setting up sessions with Shafiq and Patrick this week and next, so feel free to let me know if interested and we can schedule a 20-minute demo for your team.

The Offer Index helps you distill the competitiveness of a credit card offer into one number - the Offer Score. The syndicated Offer Score takes the Annual Fee, Rewards, Acquisition Incentive, Purchase APR, Intro Pur APR, and BT into consideration.

You obviously can choose to add cards you wish to compare yourself to, FICO, and other attributes and customize this solution to your needs.

After playing with the Offer Score for the past few weeks, I've learned to ask questions like:

• Do I wish my offer to have the?highest offer score, or are we giving away too much?
• Which attribute gives the highest lift in response rates?
• Are the segments responding the desired respondents

Quicksilver was the #1DM offer in Q2, but the Offer Index quickly helps you identify the variations of the Quicksilver product construct that were mailed at what velocity? You can isolate each campaign and identify the competitiveness among the micro-segment peer set and/or against each attribute

.Over time it allows you to answer questions such as:

• How does the offer quality relate to offer volume?
• Which products are improving or declining in offer strength?
• Where are the opportunities to tweak my card offer?

Since this is so new, I'm sure there are many other use cases that you will come up with. Let me know if interested and we'll set up some time.

Speaking of Patrick, he's been very busy doing his day job on top of killing it with the Offer Index. His most awaited consumer research report of the year is now published and Patrick delivers, once again. He doesn't need fancy titles (or subject lines) to draw people in, he calls it: Credit Cards. This report is a new format that Mintel has switched to for all future reports and it's significantly better than the old style. So two very strong reasons to read this one on our platform.

Patrick's key takeaways:

1. The Premium card market is primed to grow: Openness to annual fees continues to grow, particularly among young consumers who find great value in elite rewards and benefits. With Gen Z making leaps in recent card acquisitions, an accelerated path to premium card ownership may emerge for those seeking lifestyle rewards and benefits.

2. Flexible redemptions rise in value:?With nearly half of cardholders owning a card that earns rewards points, diverse redemption options are valued by customers who seek flexible ways to reap their rewards. Black and Hispanic consumers were particularly likely to use multiple redemption types, and their surge in card acquisition makes redemption more imperative.

3. The multi-card wallet expands:?Multi-card usage reached a new high in 2023, with nearly 70% of cardholders regularly using more than one credit card. While this suggests cardholders are engaged with their products, more than half of multi-card users would prefer to own fewer cards, indicating a desire for well-rounded products.

A few other nuggets that jumped out for me:

1. Is it time to consider a fee-only approach? I don't see this happening overnight but if the secondary and tertiary benefits from the no-fee cards are slowly removed, and competitive fee-based offerings are introduced, I absolutely see this transition taking place over the next 3-5 years. The consumer is ready, are you?

Almost two-thirds of Gen Z and Millennials pay an annual fee for at least one of their credit cards. If this PCC construct was not restricted to travel, why would the need for the no-fee cash-back card in the wallet exist? Could the fee-based card offer Intro Pur or Intro BTs? Many fintechs have attempted a "one-card" strategy or created cards that consolidate a lot of different cards on the back end. Do we really need a third party to do that?

2. Does this (please see below) mean that it's time to focus on Enterprise Loyalty, finally? BofA's success is already one data point in favor. Could the fact that multi-card users are open to considering non-primary bank cards become a notable second data point?

3. Search engine drives credit card research. AI-enabled search is the obvious evolution. I have a lot more data points in?Wisdom of the Crowd. The question we need to be asking is, how do we think in terms of audiences as opposed to keywords?

I could go on and on but I understand, unlike me, most of you have a short week and today is your Monday. And JPM, C, WFC, PNC release Q3 earnings on Friday to make this four-day work week even more action-packed.

As ever - Anuj